China Disappoints, Stalls ITA Talks

John Neuffer photo

Dateline Geneva – Despite great progress leading up to this week to close the deal on expansion of the WTO Information Technology Agreement (ITA), China showed up to the talks two days late and far more than a dollar short.  In fact, China made almost no move to cut its staggering list of sensitive products it wants removed from the negotiating table.  
 
So no one was surprised when the e-mail notice went around to negotiating parties late this afternoon announcing a suspension of this round of negotiations, as heavy black clouds gathered over Geneva.
 
We understand China dropped a handful of lines here and there, but the list still came in more than twice as long as any other country’s sensitivities list.   Importantly, the list continues to call for the removal of critical products such as next-generation semiconductors called MCOs, semiconductor manufacturing equipment, medical devices, and even some products already covered by the ITA such as printers and monitors -- in addition to a trove of many other products important to U.S. and global industry.
 
No country at the negotiating table should be able to have its cake and eat it too. China is the world's largest exporter of IT products and will benefit enormously from this tariff elimination initiative.  And it should not be allowed to continue to keep a wide swath of tariffs in place that make it difficult for innovative, affordable tech products from the United States and around the world to enter the Chinese market.
 
We are hopeful that the many voices -- including developing country voices -- emanating from Geneva this week urging China to get serious with this negotiation and develop a reasonable sensitivities list will be heard in Beijing.  After all, while the storm that darkened Geneva skies this afternoon was ominous, it dumped a huge amount of life-giving rain.
 
Reasons for optimism are twofold.  First, putting China aside for a moment, it was clear the other negotiating parties came to Geneva to close this trade deal. Significant moves and shows of flexibility over the past several weeks made this all too clear.  That was big progress.
 
Second, an abundance of the negotiating parties were uncharacteristically firm with China this week in a town more accustomed to careful, nuanced diplomacy.  Beijing got the message loud and clear from its trading partners that it should reflect on its approach to this negotiation and come back to the table promptly with a revised sensitivities list that is both reasonable and in line with the constructive spirit that has dominated this year-long negotiation.  While this week may have been awkward and stressful for some, the wake-up call to Beijing holds out the very real prospect of putting this negotiation across the finish line well before the end of the year.
 
I asked this question in my last blog: Is China really going to stand in the way of completing a successful outcome of an ambitious agreement that will significantly expand trade in ICT products, give a boost to global GDP by an estimated $190 billion, and inject greater relevance into the work of the WTO?
 
This pause in the negotiations will give Beijing a chance to reflect on that question, and we are hopeful it will seize this opportunity to do the right thing.

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