Chinese ITA Sensitivities List Provides Opportunity for Expansion, Say Industry Officials
A Chinese submission last week of a revised sensitivities list for the Information Technology Agreement (ITA) is a promising gesture but represents inadequate concessions, said industry officials as U.S. negotiators prepared to meet ITA participants in Geneva the week of Oct. 21. The participants are convening this week in Geneva to push ITA expansion conclusions by the World Trade Organization (WTO) Bali ministerial meeting in December. The revised list has not been made public, according to industry officials.
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The list marks an important move forward, said Stephen Ezell, Senior Analyst with the Information Technology and Innovation Foundation (ITIF). “I would regard it as a step in the right direction," he said. "The sensitivities list is still too restricted, too narrow. There needs to be a broader set of products in a final expansion deal." The ITA has not expanded since its 1996 inception.
Negotiations previously collapsed in June after the Chinese released a broad set of sensitivity product lines (see 13100908). The sensitivities list includes harmonized system product lines that governments do not want to receive duty-free status in a final expansion deal. “U.S. industry is very wed to getting an ambitious outcome," said an industry executive. "The ITA has not been updated in 16 years and includes none of the most innovative product lines,” he said. “So it’s way overdue for an update. That vision is shared by many of the ITA negotiating economies.”
The participating countries have largely agreed to tariff phase-out periods for the harmonized lines in question, said the executive, adding that the U.S. is pressing for the addition of 256 harmonized lines. The U.S. has only one product in its sensitivity list, optic fibers, he said. “Some of those things on the list are product lines where China is already the exporting powerhouse. So that’s inexplicable to us,” said the source. “There are also product lines on the list for products that the Chinese don’t produce. We don’t fully understand and just haven’t gotten great answers yet.”
The Chinese play a fundamental role in potential expansion but there needs to be concessions from other countries as well, the source said. The 70 total ITA participant countries stand to benefit significantly, said Ezell. “We estimate that a fully expanded ITA, meaning an agreement that has the full set of products laid out by US negotiators, will strengthen the global economy by $190 billion a year,” said Ezell. “Information technology accounts for more than 30 percent of Chinese economic growth. The Chinese have benefited significantly from the growth of IT products since ITA went into place.” The Office of the U.S. Trade Representative did not respond for comment. -- Brian Dabbs