China blamed for roadblock in IT tariff talks

Talks on expanding the WTO's Information Technology Agreement break down

 International talks aimed at removing expensive international tariffs on IT products appear to have reached an impasse, with opposing negotiators blaming China for not budging from its position.

Agreements to waive tariffs are designed to boost trade and ultimately make products cheaper for the consumer. More than 50 countries, representing 97 percent of the global IT trade, were involved in the talks in Geneva this week aimed at extending The World Trade Organization's Information Technology Agreement (ITA). Negotiators had hoped to reach an agreement this week, ahead of a ministerial level meeting of the World Trade Organisation in Bali at the beginning of December.

The ITA was established in 1996 to do away with import tariffs on certain ICT products in order to stimulate trade. Many new devices are not covered by the ITA regime, prompting current efforts to add 250 products to the list of items covered. However, China disputed the inclusion of 141 of these, and demanded that 57 of them be excluded from the ITA altogether.

"This obviously leaves the other negotiating teams with a decidedly sour taste in their mouths. Negotiators from all over the world were here and ready to close the deal this week," wrote John Neuffer of U.S.-based industry group the Information Technology Industry Council, in a blog post.

Other sources at the negotiating table confirmed that the entire group of ITA participants will not meet again this week.

Expansion of the ITA would slash tariffs on 250 IT products worth around US$1 trillion in annual global sales. According to DigitalEurope, the value of the items China sought to exclude from the list amounted to almost half of this figure.

"China has the most to gain from reaching an agreement on an expanded ITA, and the most to lose if an agreement isn't reached," said John Higgins, director general of DIGITALEUROPE

Sources close to the talks said it was difficult to understand the rationale behind China's position, as it is the world's biggest exporter of IT products. One official blamed tensions within China's negotiating team.

The items on China's so-called 'sensitivity list' include some multi-component semiconductors (MCOs), OLED panels found inside screens and monitors, as well as various types of computer monitors themselves.

The European Union wanted to exclude only a handful of products from the scope of the ITA, including TVs. The U.S., meanwhile, sought to exclude just one item, fiber optic cable, and Japan didn't want anything excluded.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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