China Standoff Risks Collapse in ITA Talks

John Neuffer photo

Dateline GENEVA:  Despite being on the receiving end of withering criticism here in Geneva, China is continuing its refusal to play ball in the multilateral effort to expand product coverage of the Information Technology Agreement (ITA).   As a result, the entire negotiations are at serious risk of collapse.

Shortly after ambassadors directed very pointed questions to China for refusing to provide its revised “sensitivities list” in a meeting early yesterday afternoon, Chinese negotiators finally relented and released a new list. 

While that step was welcome, the contents of the new list were a thumping disappointment.  It’s still massive, at roughly 140 products lines, with only a handful of products being shifted out of the removals category.  China continues to insist that over 60 products be removed from the negotiating table, far more than anyone else.

Worse yet, despite signaling early last week that it was willing to show flexibility on a number of priority product lines, that forward progress evaporated and was not reflected in the new list -- hence the widely held view here that the list was not only late in coming, but it was also a step backwards.

Then later in the afternoon yesterday, all the negotiators convened a meeting for several hours.  Once again, China disappointed, indicating nothing that would suggest it was willing to tame its disruptive, super-sized sensitivities list.

All the delegations here, and I mean all the delegations, are working extremely hard to make compromises and are showing ever-increasing amounts of ambition – except China.  Thailand, Malaysia, Colombia, Costa Rica, Israel, Guatemala, and others are all making the necessary end-moves that will get us to a commercially significant outcome.  So the level of frustration with China’s refusal to give ground is generating deep feelings of frustration, especially since China stands to be one of the greatest beneficiaries of ITA expansion.                                                                                               

Discussions continue today, with another meeting of all negotiators scheduled for the late afternoon.  China is losing face in the World Trade Organization and the global community over this.  It’s hard to imagine it will really stay in a crouch and blow up these negotiations with so much at stake, both commercially and in terms of preserving China’s own reputation.  And, of course, one must wonder if China is factoring in the impact this may have on Beijing’s participation in other trade negotiations.  Stay tuned.

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