Participants call for rapid conclusion of talks on ITA expansion

18 May, 2015

TWN Info Service on WTO and Trade Issues (May15/08)
18 May 2015
Third World Network

 Published in SUNS #8020 dated 12 May 2015
Geneva, 11 May (Kanaga Raja) -- A meeting of the WTO Committee on the Information Technology Agreement (ITA) on 8 May heard a number of participants calling for the rapid conclusion of the negotiations on the expansion of product coverage under the Information Technology Agreement (ITA).
There was no agreement, and the next meeting of the Committee is set for October 2015.
The ITA, first negotiated amongst WTO Members, 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, thus multilateralising it on an MFN basis.
According to information posted on the WTO website, the participants in the negotiations for expansion of the ITA are: Albania, Australia, Canada, China, Colombia, Costa Rica, Dominican Republic, El Salvador, the European Union (comprising 28 member states), Guatemala, Hong Kong-China, Iceland, Israel, Japan, Korea, Malaysia, Mauritius, Montenegro, New Zealand, Norway, the Philippines, Chinese Taipei, Singapore, Switzerland, Thailand, Turkey, and the United States.
According to trade officials, there has been no change in the situation since last December when the latest round of negotiations, which was coordinated by the European Union, broke down again over the inclusion of some key high-tech items in the product coverage.
The breakdown had reportedly been due to the stalemate between China and South Korea, with China refusing to go beyond the items it had agreed with the US, and South Korea's insistence on the inclusion of LCD flat-screen panels in the draft list of some 200 additional products that would have their tariffs reduced to zero (see SUNS #7938 dated 16 December 2014.)
At the ITA Committee meeting on 8 May, the EU said that the negotiations for the expansion of the ITA (ITA-II) over the past three years have involved participants submitting many products for inclusion but that many have not made it to the list because of lack of consensus, including some products that it had proposed.
According to trade officials, the EU called on the members concerned not to block agreement and to agree on what is now on the table.
Japan urged a sense of urgency, saying that it has been five months since the last effort was made to conclude ITA-II.
It called on progress to be made at the APEC trade minister's meeting to be held later this month in the Philippines, as well as at the June mini-ministerial on the sidelines of the Organisation for Economic Cooperation and Development (OECD) meeting.
According to trade officials, the US said that ITA-II is a top trade priority for it.
The US said that its IT industry is growing impatient, and is asking that if the WTO cannot agree on 200 ITA-II products, how could it agree on concluding the Doha Round?
The US also said that its patience is not without limits and expressed hope for progress in the coming days. It also supported Director-General Roberto Azevedo's call for the completion of the ITA negotiations during the first semester of this year.
According to trade officials, Norway, Switzerland, Canada, Chinese Taipei, Montenegro, Singapore, Colombia, Australia and Hong Kong-China also supported the early conclusion of the ITA-II negotiations.
Korea said that it is actively engaged in good faith negotiations. It was of the view that the remaining gap is not large and is thus within reach.
According to trade officials, China said that it has been doing all that it can for the ITA-II, including holding some difficult consultations with its domestic industry.
It however said that members cannot expect just one participant to make contributions all the time. All participants must contribute, it stressed.
China also underlined that participants must not make unrealistic requests, and should instead focus on what is on the table instead of grasping at the possibility of getting one or two more products included.
According to trade officials, the Chair of the Committee, Mr. Fred Payot of Switzerland, summarised that all participants that spoke supported the swift conclusion of the negotiations. He urged collective efforts in this regard.
According to trade officials, the meeting also heard a report from the Chair on a workshop that was organised by the WTO Secretariat the day before (on 7 May) on non-tariff barriers (NTBs) affecting trade in information and communications technology (ICT) products.
In his opening remarks at the workshop on 7 May, WTO Deputy Director-General Xiaozhun Yi had said that today, trade in products covered by the ITA accounts for an estimated US$1.6 trillion, almost three times as much as when the ITA was signed in 1996.
This sector has been one of the fastest growing sectors in world trade and accounts for approximately 9 per cent of global merchandise exports, he added.
According to Yi, because tariffs on ITA products have been fully eliminated by participants, NTBs could constitute the most important barrier to trade in these products.
The main challenge of the ITA Committee's work in this area is how to allow participants to achieve their legitimate public policy objectives, such as protecting their consumers and the environment, in a manner that is not more trade-restrictive than necessary, and that facilitates trade in ICT products, he said.
The Chair of the ITA Committee reported that speakers from the industry present at the workshop had made concrete recommendations around the following principle: "For each area of certification: one global product, one global standard, one global test and one global certificate."
The recommendations included: the establishment of a centralised database of administrative and technical requirements; encouraging the use of e-labelling as a solution to the costly problem of the proliferation of marking requirements; harmonising practices in the field of energy efficiency requirements; and encouraging global cooperation to avoid forced localisation requirements.
According to trade officials, Switzerland, supported by the Philippines, Japan, Chinese Taipei and the EU, suggested that the incoming Chair (Mr. Andrew Staines of the United Kingdom) consult with members on how the Committee should proceed with these recommendations, and report at the next meeting.
The US said that it has heard several doable solutions, including on e-labelling, and encouraged other ITA members to allow its use in order to reduce costs to IT companies.
The next meeting of the Committee is scheduled for 14 October 2015. +