ITA Expansion – Achievable This Year if China is Ambitious
A little over a month ago, a coalition of global trade associations representing the information and communication technology (ICT) sector were in Geneva for what many hoped would be the concluding round of negotiations to expand and update the product coverage under the WTO Information Technology Agreement (ITA). As discussed in a previous post, the ITA is one of the most commercially significant trade agreements for the ICT sector. The ITA eliminates tariffs on a broad range of ICT goods and sub-components, which in turn, lowers manufacturing costs, leading to lower cost ICT products for businesses and consumers around the world.
Unfortunately, the negotiations were suspended on July 17th – midway through the week of technical discussions to finalize the expansion of the ITA. The action forcing event for the suspension of the negotiations was the disproportionately large list of sensitive products China requested for exclusion from the list of products being considered for an expanded ITA. While disappointing, the difficult decision to suspend the negotiations was seen by the negotiating parties as necessary to preserve the goal of a commercially significant expansion of the product coverage under the ITA.
Contributing to over 25 percent of China’s overall exports, the ICT manufacturing sector is an important engine of economic growth for China. And as the top exporter of ICT goods in the world, China has a significant and vital role in the negotiations to expand the ITA, which makes China’s lack of flexibility and leadership in the negotiations all the more puzzling. One estimate puts the global economic benefit of ITA expansion at $190 billion boost to global GDP, and China will share in that economic boon if ITA expansion can be successfully concluded.
We hope that China will use this break in the negotiations to reexamine its approach to the negotiations to expand the ITA and focus on reducing its overly large list of sensitive products. In fact, this aspiration was shared by 35 trade associations from around the world in a letter to Vice Premier Wang urging China to take a more productive approach to the negotiations in order to reach an ambitious, balanced, and commercially significant expansion of the ITA. There is an opportunity here for China to demonstrate real leadership by returning to the negotiating table with a product sensitivities list more aligned with its status as a global economic leader. This would send a clear signal to the other negotiating parties that China is ready to move forward to conclude the expansion of the ITA this year.ITA Expansion – Achievable This Year if China is Ambitious
For more information, please contact Eric Holloway, the Director for International & Government Affairs at TIA. He can be reached at email@example.com.