[Ip-health] FT: US warns China over tech trade deal

Thiru Balasubramaniam thiru at keionline.org
Mon Jul 7 03:24:36 PDT 2014


<SNIP>

The stand-off has hinged on China’s push to exclude around 60 new product
categories
<http://www.ft.com/intl/cms/s/0/27eb217e-52e8-11e3-a73e-00144feabdc0.html>,
including medical devices and next-generation silicon chips, from the ITA.
Under the agreement, countries commit not to impose tariffs and other trade
barriers on IT products.

http://www.ft.com/cms/s/0/aa877ee0-0376-11e4-9195-00144feab7de.html


July 6, 2014 2:06 pm
US warns China over tech trade deal

By Shawn Donnan in London

The top US trade official has warned China that a proposed bilateral
investment treaty and other global negotiations could be in jeopardy if the
two sides fail to resolve a stand-off over liberalising the $2tn annual trade
in high-tech products
<http://www.ft.com/intl/cms/s/0/a640348c-daca-11e3-8273-00144feabdc0.html?siteedition=intl>
.


In an interview with the Financial Times, Mike Froman, the US trade
representative, said Washington was eager to use this week’s annual
US-China Strategic and Economic Dialogue to break the deadlock over
updating the 1996 Information Technology Agreement.


A failure to get a deal on trade in IT would amplify opposition in the US
Congress to other trade deals with China, according to US officials. It
would also be “an important data point as to other negotiations that China
may be interested in as well,” Mr Froman added.


The stand-off has hinged on China’s push to exclude around 60 new product
categories
<http://www.ft.com/intl/cms/s/0/27eb217e-52e8-11e3-a73e-00144feabdc0.html>,
including medical devices and next-generation silicon chips, from the ITA.
Under the agreement, countries commit not to impose tariffs and other trade
barriers on IT products.


Now the world’s biggest exporter of IT products, China remains eager to
protect some of its nascent high-tech industries, which are not yet
competitive with those in the US and other developed markets.


Mr Froman said the US and China had made progress in negotiations both at,
and since, an Apec trade ministers’ meeting in May. Other people close to
the talks said the discussions have narrowed to about a dozen product
categories on China’s long list that the US is particularly interested in
including in the agreement.

But Mr Froman warned that a counter-offer by China last week had fallen
short of US expectations and hard negotiations would have to happen in
Beijing during the July 9-10 meetings between top US and Chinese officials.


Reaching a deal would “be an important, concrete manifestation of how we
work together to address common interests coming out of the Strategic and
Economic Dialogue next week,” Mr Froman told the FT.


A “positive outcome”, he said, would “contribute importantly to momentum”
for negotiations on a bilateral investment treaty launched at last year’s
dialogue. Although the mooted investment treaty is heavily backed by
business and China is now engaged in similar talks with the EU, the idea
has been greeted sceptically by some in the US Congress.


Failure to secure a deal next week would also make it difficult to conclude
the ITA negotiations in time for a November Asia-Pacific Economic
Cooperation summit in Beijing that China is eager to bill as a success,
according to US officials. At their summit last year in Indonesia, Apec
leaders called for the “swift conclusion” of the ITA negotiations.


Any deal between the US and China would still need the backing of other ITA
members, many of which have been happy for the US to take the lead in
negotiations with Beijing.

China’s commerce ministry did not respond to requests for comment.


Tu Xinquan, vice dean of the China Institute for WTO Studies, said other
ministries had taken a “tough stance” internally on maintaining trade
protections for a number of sectors that were not yet competitive with
their US counterparts. “Because the US has an advantage in these core
technologies, of course they want China to lower import taxes on them,” Mr
Tu said.

Jack Lew, the US Treasury secretary, this week said US officials would use
next week’s meetings to press China on what many economists see as the
persistent undervaluation of the renminbi, the Chinese currency. Ties have
also been strained in recent months by US allegations of Chinese
cyberspying and what neighbours complain has been Beijing’s aggressive
territorial stand in the South China Sea.


*Additional reporting by Wan Li in Beijing*



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