WTO Negotiators Target ITA Expansion for Bali Negotiations
As World Trade Organization talks lurch forward in the lead-up to the WTO Bali ministerial summit in December, participant nations may deliver an Information Technology Agreement expansion deal that will eliminate ITA tariffs on a host of new information technology products, said industry officials. The Chinese aim to table a new product list that would fall under the agreement during the next ITA negotiation round in Geneva, the week of Oct. 21, said speakers at a National Foreign Trade Council (NFTC) event Tuesday and an Information Technology Industry Council (ITI) official in a blog post that day. The agreement hasn’t expanded since its inception in 1996 despite many IT industry developments.
"The ITA itself ... if they can finish that, that’s no small accomplishment,” said NFTC President Bill Reinsch. That’s a “tangible benefit because it’s tariff reduction in areas that promote more trade,” he said. The list targets items that will be excluded from duty-free trade, identified as a sensitivities list.
The Chinese commitment to ITA remains in question, said NFTC roundtable participants. China in July offered a sensitivities list twice as long as any other country’s list and included 100 products it intended to ban, said industry officials. That offer brought negotiations to the current standstill. “If the list is 10 items fewer than the last one, you could draw one conclusion,” said Reinsch. “If it’s three-fourths smaller than the last one, then you can draw a different conclusion.” The ITA is comprised of more than 70 countries that produce 97 percent of the world’s IT products, the WTO has said.
The ITA just added Russia. The agreement expansion will stimulate the global economy at multiple levels, said NFTC speakers. “Obviously, IT harbor companies would benefit,” said Jake Colvin, National Foreign Trade Council vice president-global trade issues. “But from our perspective, it’s the users of those hardware products and software electronics that benefit from it as well ... particularly now as we talk about the ability of technology to enable economic growth and development of [a] real economy.”
On top of Chinese unpredictability, India is reluctant to endorse the expansion, said Colvin. India is not a significant IT producer, he said. The potential is high that ITA members will agree to expand the pact when they meet in Bali, wrote John Neuffer, senior vice president-global policy at ITI, spearheading ITA expansion. “The end of the impasse is welcome. While the pause was necessary, further delay would have jeopardized getting a strong deal concluded by the next” ministerial meeting, he wrote on ITI’s blog (http://bit.ly/1gmZILH).
The ITA expansion effort is also a “bellwether” for Chinese participation in the WTO Trade in Services Agreement (TISA), said Reinsch and Colvin. Initiated by the U.S. and Australia, TISA is a pact that would expand trade in services globally, said the Coalition of Services Industries. The agreement has 50 participant nations representing 70 percent of global services, the coalition said. “If ITA goes well, if China can come down on its sensitivities and we can get a good outcome in December, then I suspect that bodes well for China’s entry into TISA,” said Colvin. “If we can’t or if ITA doesn’t go well, then I think it’s a little bit more complicated.” Regardless, the Bali round will define the character of the WTO, NFTC speakers said.
"There’s sort of an architectural question here. Can the WTO do comprehensive trade negotiations on a multilateral forum or are they better served by ... essentially operating in a sequential manner,” said Scott Miller, Scholl chair in international business at the Center for Strategic and International Studies. “Bali will be a good indication of which they choose, whether there is a real effort to resuscitate a broad negotiating mandate.” (bdabbs@warren-news.com)