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China Blamed for Suspension of Talks on Expanding Duty-Free Trade for IT Goods

Friday, July 19, 2013
Sandler, Travis & Rosenberg Trade Report

Negotiations on expanding the World Trade Organization’s Information Technology Agreement have been suspended indefinitely due to China’s insistence on maintaining tariffs on 106 of the 256 items planned to be added to the pact. The ITA was negotiated in 1996 and provides for duty-free trade of about 180 items between 75 signatory countries, accounting for about $2 trillion in annual global exports. Talks on broadening the agreement to encompass an additional $800 billion worth of products that have been developed in the intervening 17 years, such as DVD players, smartphones, video game consoles and advanced semiconductors, had been expected to be wrapped up as early as this week.

According to press reports, participants are uncertain why China is seeking the continued protections. “China is the world’s largest exporter of IT products and will benefit enormously from this tariff elimination initiative,” said John Neuffer, senior vice president for global policy at the Information Technology Industry Council. U.S. Trade Representative Mike Froman expressed hope that “China will carefully consider the concerns it heard this week from many of its negotiating partners, and revise its position in a way that will allow the prompt resumption of the negotiations.”

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