ITA Negotiations Hang in the Balance as China Disappoints

John Neuffer photo

Dateline GENEVA:  After a long and grueling week of negotiations to expand product coverage of the Information Technology Agreement (ITA), there is one big question hanging in the air:  Will China really blow up this once-in-a-generation effort to significantly eliminate tariffs on tech products that will bring huge benefits to China and the global economy?

In fact, you can taste the irritation laced with frustration in the chilly mountain air here in Geneva where negotiators have been meeting all week to reach a strong outcome.

To the disappointment of everyone, despite China’s commitment to produce a revised sensitivities list this week, Beijing negotiators hinted today we may get no new list at all by close of business today.  It should be noted that nearly every other country with significant sensitivities lists submitted revised versions last week, including El Salvador, Guatemala, Philippines, Thailand, and Malaysia.

Not only has China failed to provide a new list this week, it cancelled nearly all its meetings yesterday and went into a shell for reasons that no one can really fathom.  And when it came out of that shell today and began to engage again, its negotiators offered nothing new and interesting beyond the oversized sensitivities list it produced during the last round of talks in October.

All of this less-than-impressive behavior occurred while other negotiating teams continued to make compromises and cut deals intended to get this deal done by next week.

This is all rather bizarre.  For starters, China is the largest exporter of tech goods in the world.  Elimination of tariffs on those products would bring enormous benefits to Chinese industry.

Moreover, China has made it clear it wants to help reinvigorate the World Trade Organization (WTO) as an institution at the forefront of global trade liberalization.  Failure to help get a strong ITA expansion outcome before the WTO ministers meet in Bali early next month will certainly not further that objective.

More broadly, early this week, the Chinese Third Plenum leadership meeting concluded, issuing a communiqué saying China needs to deepen its participation in the global economy.  Well, it doesn’t appear the Chinese negotiators here in Geneva received that memo from Beijing this week.

In the many meetings we have had with ITA negotiators over the past few days, it is clear nearly everyone is in endgame mode and committed to a commercially significant outcome, except China.

U.S. Industry has been clear from the outset -- a tepid deal is no deal.  A big result is a must-have.

This is, of course, by no means over.  Talks are scheduled to go through Wednesday of next week.  So there is still time to get this done.  And remember, the Chinese are masters of brinkmanship tactics.  Let’s hope that is what we have been witnessing this week, and they get with the program in the coming days.  If not, China will squander an excellent opportunity to show global leadership, breathe life back into the WTO, and contribute to getting this job-creating initiative across the finish line before the Bali ministerial.

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