[A2k] FT: Negotiators nervously eye China’s resistance in ITA talks

Thiru Balasubramaniam thiru at keionline.org
Tue Nov 19 06:04:21 PST 2013

November 19, 2013 1:17 pm
Negotiators nervously eye China’s resistance in ITA talks
By Shawn Donnan in London

China is again resisting calls to reduce tariffs on a wide range of IT
products it imports, threatening efforts to update the 1996 international
agreement that governs the trade in electronic goods.

Negotiators from more than 50 countries involved in 97 per cent of the
global trade in IT products are seeking to update the Information
Technology Agreement<http://www.wto.org/english/tratop_e/inftec_e/inftec_e.htm>
removing tariffs on a swath of products not foreseen in the 1996 deal. They
are hoping to unveil it at next month’s WTO ministerial meeting in Bali.

The ITA negotiations have also become a litmus test for China, which is the
world’s biggest exporter of IT products, and how it engages in plurilateral
trade negotiations.

Beijing is seeking to join the much bigger, and potentially more complex
US-led talks to update the rules governing the $4tn annual trade in
services globally. However, the US and others have pointed to what they see
as China’s obstructionist behaviour in the ITA talks as a cautionary tale
for the services talks.

The ITA talks first broke down in July
China’s decision to exclude more than 100 products from the 256-product
list at the centre of the negotiations. They resumed last week after the US
and others involved said they had received assurances from China that it
was prepared to reduce the list of excluded products substantially.

But China surprised many by not taking part in last week’s talks and also
cancelled a series of meetings with other countries, according to people
close to the negotiations in Geneva. It also failed to submit a new
proposed list before the talks began.

When other countries involved pressed the Chinese on Monday negotiators for
Beijing finally submitted their list, trade officials said. But the updated
list included only a few minor tweaks and negotiators for other countries
said the talks now appeared at risk unless Beijing was prepared to make
significant concessions and engage more actively.

While China’s tough position might be expected in a negotiation, trade
officials involved said its behaviour had been out of the ordinary. Yu
Jianhua, China’s deputy international trade representative, flew to Geneva
and had scheduled meetings to discuss the ITA negotiations with other
participants last week. But the bulk of those meetings were cancelled.

“We have a situation today where there is just a broad frustration that
China is not ready to negotiate this,” said one senior trade official
involved in the talks. “They are the world’s biggest beneficiary of IT
exports. Other people look at that and say there’s got to be a little bit
of reciprocity there.”

The talks are scheduled to conclude on Wednesday but are now likely to be
extended. Negotiators insist a deal needs to be done this week in order to
have it ready to be presented to ministers in Bali.

John Neuffer, senior vice-president of global policy at the Information
Technology Industry Council, which represents major tech companies
as Microsoft and Sony, said the Chinese manoeuvring appeared to be part of
a negotiating ploy.

“They are continuing to play hardball and seeking maximum leverage by being
tough and running the clock out,” he said.

“Everyone is like fish moving around an immovable pier. They are making as
much compromise as they can without the Chinese at the table,” he said.
“China has got to be part of this. They are too big a player. You can’t
have an outcome without the Chinese.”

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