The World Trade Organization (WTO) announced on July 20 that 54 of its members reached consensus for the negotiations on expanding the ‘Information Technology Agreement’ (ITA) on July 18. The expanded agreement would eliminate tariffs on an additional list of about 200 information products valued at about 1 trillion U.S. dollars.
The ITA’s expansion will not only facilitate the development of information technology around the world, but also help the WTO to rebuild its authority image in multilateral trade negotiations. For China, ITA expansion will benefit the export of Chinese information products and boost the development of Sino-U.S. economic and trade relations.
The ITA came into force in April 1997. Its members represented 97 percent of world’s total IT product exports. China committed to join the Agreement during the negotiations on China's entry into the WTO. The ITA aims at eliminating tariffs on a list of information technology products. Yet the list hardly changed after the agreement took effect. In 2012, ITA members agreed to hold talks on expanding the agreement to update the product list formulated before 1997 and extend the scope of tariff elimination.
The negotiations on ITA expansion have suffered series of setbacks after being launched. In November 2013, the U.S. announced suspending the negotiations on the excuse that a number of its products in some industries were not satisfied. In November 2014, the Chinese and U.S. presidents reached consensus on the APEC CEO Summit in Beijing that the two countries would resume and conclude ITA expansion negotiations as soon as possible, marking a real breakthrough. However, the consensus reached between China and the U.S. was later opposed by EU and South Korean. In the end, the U.S. made few concessions to China, as reported by British Financial Times.
The products covered by the expanded agreement include new generation semi-conductors, GPS navigation equipment and medical equipment, including magnetic resonance imaging products and ultra-sonic scanning apparatus. The list of products and the draft declaration have been sent to all ITA expansion negotiators for review. Negotiators have to give final approval before July 24. Experts suggested that the approval process was merely a formality as all main negotiators had participated in the negotiation on July 18.
Once the product list and draft declaration are approved, the negotiators will hammer out the technical details and the timetable for tariff elimination in the next few months. The ITA expansion agreement is expected to be singed at the 10th WTO Ministerial Conference in Nairobi in December.
WTO Director-General Roberto Azevedo addressed on July 20 that the trade covered in this agreement is comparable to annual global trade in iron, steel, textiles and clothing combined. By taking this step, WTO members will underline the WTO's role as the central global forum for trade negotiations.
The extended ITA will be the first tariff-cutting agreement in the WTO for 18 years. This will enhance and restore WTO members’ confidence in the WTO's function for multilateral negotiations. Previously, as the Doha round of trade talks delayed, negotiations on ITA and TISA had not achieved any result. Thus, the international community had believed that the WTO lost its function for multilateral trade negotiations and countries all turned to regional trade negotiations.
While all not WTO members participated in the ITA expansion negotiations, all will benefit from the outcome as the participants will scrap duties on imports of information products regardless of which WTO member has produced them according to WTO’s most-favoured-nation clause.
China is the world’s largest IT products importer. The expansion of the ITA means that Chinese information products will confront fiercer competitions in domestic market. On the other hand, China is also the world’s largest information products exporter. The ITA expansion will help Chinese mobile and other products expand overseas market.
In addition, the logjam of ITA expansion negotiations has interrupted Sino-U.S. economic and trade relations in recently years. If the agreement can be finalized, it will promote the negotiations on Sino-U.S. Bilateral Investment Treaty and other trade agreement.
The ITA’s expansion will not only facilitate the development of information technology around the world, but also help the WTO to rebuild its authority image in multilateral trade negotiations. For China, ITA expansion will benefit the export of Chinese information products and boost the development of Sino-U.S. economic and trade relations.
The ITA came into force in April 1997. Its members represented 97 percent of world’s total IT product exports. China committed to join the Agreement during the negotiations on China's entry into the WTO. The ITA aims at eliminating tariffs on a list of information technology products. Yet the list hardly changed after the agreement took effect. In 2012, ITA members agreed to hold talks on expanding the agreement to update the product list formulated before 1997 and extend the scope of tariff elimination.
The negotiations on ITA expansion have suffered series of setbacks after being launched. In November 2013, the U.S. announced suspending the negotiations on the excuse that a number of its products in some industries were not satisfied. In November 2014, the Chinese and U.S. presidents reached consensus on the APEC CEO Summit in Beijing that the two countries would resume and conclude ITA expansion negotiations as soon as possible, marking a real breakthrough. However, the consensus reached between China and the U.S. was later opposed by EU and South Korean. In the end, the U.S. made few concessions to China, as reported by British Financial Times.
The products covered by the expanded agreement include new generation semi-conductors, GPS navigation equipment and medical equipment, including magnetic resonance imaging products and ultra-sonic scanning apparatus. The list of products and the draft declaration have been sent to all ITA expansion negotiators for review. Negotiators have to give final approval before July 24. Experts suggested that the approval process was merely a formality as all main negotiators had participated in the negotiation on July 18.
Once the product list and draft declaration are approved, the negotiators will hammer out the technical details and the timetable for tariff elimination in the next few months. The ITA expansion agreement is expected to be singed at the 10th WTO Ministerial Conference in Nairobi in December.
WTO Director-General Roberto Azevedo addressed on July 20 that the trade covered in this agreement is comparable to annual global trade in iron, steel, textiles and clothing combined. By taking this step, WTO members will underline the WTO's role as the central global forum for trade negotiations.
The extended ITA will be the first tariff-cutting agreement in the WTO for 18 years. This will enhance and restore WTO members’ confidence in the WTO's function for multilateral negotiations. Previously, as the Doha round of trade talks delayed, negotiations on ITA and TISA had not achieved any result. Thus, the international community had believed that the WTO lost its function for multilateral trade negotiations and countries all turned to regional trade negotiations.
While all not WTO members participated in the ITA expansion negotiations, all will benefit from the outcome as the participants will scrap duties on imports of information products regardless of which WTO member has produced them according to WTO’s most-favoured-nation clause.
China is the world’s largest IT products importer. The expansion of the ITA means that Chinese information products will confront fiercer competitions in domestic market. On the other hand, China is also the world’s largest information products exporter. The ITA expansion will help Chinese mobile and other products expand overseas market.
In addition, the logjam of ITA expansion negotiations has interrupted Sino-U.S. economic and trade relations in recently years. If the agreement can be finalized, it will promote the negotiations on Sino-U.S. Bilateral Investment Treaty and other trade agreement.
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