TWN Info Service on WTO and Trade Issues (Dec13/01)
2 December 2013
Third World Network  

ITA-II talks break down, no date set for resumption
Published in SUNS #7703 dated 25 November 2013
 
Geneva, 22 Nov (Kanaga Raja) -- The negotiations at the World Trade Organisation (WTO) on expanding the product coverage under the Information Technology Agreement (ITA) broke down Thursday, and are not expected to resume for the time being.
 
[ITA-I, negotiated amongst WTO Members said to be accounting for 90% of global trade in this sector, and concluded in December 1996, brought about an agreement for tariffs to be reduced to zero by the participants in that accord, who then inscribed this concession in their schedules, multilateralising it on an MFN basis. SUNS]
 
Following a suspension of more than three months, the negotiations on expanding the product coverage under the ITA had resumed again in the third week of October among some 25 members (the European Union counting as one).
 
The latest round of negotiations took place 11-21 November and was coordinated by the EU.
 
According to trade officials, the participants in the Committee on the expansion of ITA products were expecting to conclude an agreement, to expand the product coverage under the ITA and to reduce the list of sensitive items that would be excluded from trade liberalisation (or with a long period of exclusion), in time for the Bali Ministerial Conference.
 
[As of the end of today, there are only 6-7 working days left to the Bali Ministerial Conference.]
 
At a transparency session to inform members of the outcome of several bilateral negotiations that were held over the last 10 days, Ambassador Angelos Pangratis of the EU said that members will now need to hear from China for the resumption of the talks.
 
According to a press release issued here on Thursday by the EU mission to the WTO, the main outstanding issue is China's request for the exclusion of a large number of information technology (IT) products from trade liberalisation.
 
According to the EU press release, the main obstacle to conclude the negotiations is a request from China to treat 141 products as ‘sensitive' and of these to exclude altogether from liberalisation 59 important products.
 
"The EU regrets that China has so far been unable to contribute to the negotiations of the Information Technology Agreement (ITA) in a way that is consistent with China's position as the largest world exporter of IT products," said EU Trade Commissioner Karel De Gucht in the press release.
 
He added: "I call on China to urgently withdraw its excessive requests for exclusions of IT products from the negotiations, so that the talks can resume. We cannot afford to lose the momentum for a deal", which would liberalise over 1 trillion euros of trade, corresponding to 7% of total world trade in goods.
 
According to trade officials, at the meeting Thursday, the United States, Japan, Korea, Canada, Norway, Chinese Taipei, Switzerland, New Zealand, Australia and Costa Rica voiced strong disappointment and frustration.
 
Some blamed Beijing for the lack of constructive engagement, lack of flexibility and lack of ambition, trade officials added.
 
Japan said that many participants came with a mandate to conclude the negotiations and made concessions to reach an agreement, but not China.
 
According to trade officials, Chinese Taipei said that it was unfortunate that China, the biggest producer and exporter of IT products and the biggest beneficiary of the Agreement, has made no movement.
 
Australia also expressed regret that there was no flexibility shown by the major beneficiary of the Agreement.
 
According to trade officials, China's representative, Vice Minister Yu Jianhua, said that China received a list (a request for reducing China's sensitive items) that was "too long to manage".
 
He said that China showed "maximum flexibility" and contributed a lot, and shared the expectations of others on reaching an agreement. But there was "a gap in perceptions," he added.
 
According to trade officials, he further said that it was pointless to play a "blame game" and that there is now a need for reflection to accommodate each other's positions.
 
"We could not reach a deal this time but this is not the end of the road,", said Vice Minister Yu.
 
Back in October, more than 160 civil society organisations (CSOs) and trade unions worldwide, including the International Trade Union Confederation (ITUC), had sent a letter to the ITA negotiating parties, expressing concern that the expansion of the ITA (to ITA-II) "could further harm workers, particularly in developing countries, that have not yet benefited from the agreement, and possibly deteriorate the developmental prospects for those which participate."
 
"The information and communication technology (ICT) sector has enormous capacity to contribute to domestic industry creation, employment generation, and technological development. Unfortunately, claims of the ITA's potential benefits have failed to materialise for the majority of workers in participating countries," the letter had noted. (See SUNS #7682 dated 25 October 2013.)