One of the more concrete developments arising out of this week’s Asia Pacific Economic Cooperation (APEC) summit in Beijing is the announcement that Chinese and U.S. negotiators have reached a breakthrough in trade talks to eliminate import duties on a wide range of information technology products.
The breakthrough paves the way for a “swift conclusion” on a proposal to significantly expand the Information Technology Agreement (ITA) at the World Trade organization (WTO) in Geneva later this year, according to a press release issued by the Office of the U.S. Trade Representative (USTR). Negotiations to expand the ITA came to a halt last year, due to disagreements over the product scope to be covered by the arrangement. “Since that time, the United States and China have been working to close our differences,” USTR Michael Froman said.
“To give you some idea of the importance of this agreement, the last time the WTO agreed to eliminate tariffs on IT products was in 1996 when most of the GPS technology, much of the medical equipment, software, and high-tech gadgetry that we rely on in our daily lives didn’t even exist, “ Froman told reporters at the APEC summit.
An expanded ITA would eliminate tariffs on about $1 trillion worth of global sales on IT products, according to the U.S. government. More than 200 tariff lines on such items as computers and computer software, telecommunication equipment and other advanced technology products will be reduced to zero under the new agreement.
Some estimates project that successfully concluding the ITA would contribute to global GDP by up to $190 billion, increase productivity worldwide (especially in developing countries), and support up to 60,000 additional U.S. jobs in technology and manufacturing. The U.S. Chamber of Commerce welcomed the announcement, a spokesman noting that “the commercial significance of these negotiations is obvious.”