China Key to Restart ITA, APEC may Break Logjam
Four months after talks were suspended, efforts to update the list of products covered in
the WTO’s Information Technology Agreement remain stalled. However, some participants
- including the US - are now calling for a breakthrough in time for a May
meeting of Asia-Pacific trade ministers.
The ITA eliminates tariffs on
a series of information and communication technology (ICT) products, and was
agreed in 1996. Unlike the majority of the WTO Agreements, the ITA is a plurilateral pact, and therefore only requires concessions
from its participants. The benefits, however, are extended to all WTO members.
Advocates for an updated
agreement say that it could serve as a major confidence-booster for the global
trade body, given its struggles in advancing the Doha Round talks, which are
separate from the ITA negotiations and involve all of the WTO’s members.
Furthermore, proponents say,
the existing ITA does not reflect the realities of today’s ICT trade, with many
of the items on the 1996 list having become obsolete due to the advent of new
technologies. Some estimates have indicated that an updated ITA could provide
an US$800 billion boost to bilateral trade and US$190 billion to global GDP.
Focus on China
This latest series of efforts
to build upon the existing product list kicked off in 2012, with many hoping
that an expanded ITA could be ready in time for last December’s WTO ministerial
conference in Bali, Indonesia.
However, the ITA expansion
talks were suspended last November, after China asked for a series of products
- reportedly around 140 tariff lines - to either be excluded from the planned
list or be subjected to long tariff phase-outs, out of the total 250 under consideration.
China is currently the world’s
top exporter of ICT goods, and serves as a manufacturing and assembly base for
many of the products covered under the current version of the ITA. The
number and types of products China asked to be excluded from the new list,
various participants have said, were too extensive to render any final
agreement commercially meaningful.
“An outcome where one
participant stands to reap the majority of the benefits of a deal, while the
rest are left to wait for the next ITA expansion, will not bring us closer to
conclusion,” US Ambassador Michael Punke said in
Geneva earlier this week at a WTO committee meeting on the ITA talks.
Others in the group have
similarly pressed Beijing to show more flexibility. At the same meeting, the EU
also called on China “to do more to join the emerging consensus,” according to
sources familiar with the discussions. Similar sentiments were reportedly
expressed by Australia, Canada, Japan, Hong Kong, Korea, Norway, and
Switzerland.
China, in turn, has maintained
that slashing tariffs on these products would have massive revenue
implications, particularly as it is still a developing country. Beijing has
also countered claims that it would be one of the largest beneficiaries of
increased ICT trade, given that the Asian economy is on the lower end of the
value chain in this sector.
The group negotiating the ITA
expansion includes 27 of the ITA’s current participants, when counting the EU
as one. The ITA’s full membership includes 50 participants.
China will be serving as this
year’s host of the annual Asia-Pacific Economic Cooperation (APEC) leaders’
summit, as well as all related meetings. Trade ministers from the 21-country
regional group are set to meet in Qingdao in mid-May.
US business leaders have been
pushing for trade ministers to use the APEC meeting to make a breakthrough in
the ITA talks, a suggestion that US government officials have openly backed.
The successful conclusion of the information technology deal by the May meeting
is a “doable goal,” Punke said last week.
However, WTO Director-General
Roberto Azevêdo told US business leaders last week
that it would be difficult to predict right now “how quickly and how far we can
arrive” to an ITA deal, adding that it would “not be wise for me to try and
point to arrival points.”
The WTO chief did acknowledge
that the ITA could feature in the two-day APEC discussions, given that many of
the main players would be present.