Some good news coming out of the high-level U.S.-China Strategic and Economic Dialogue (S&ED) in Beijing this week is that China has signaled it is continuing domestic consultations to raise its level of ambition to expand product coverage of the Information Technology Agreement (ITA). And this signaling was apparent during the meetings today and yesterday at very senior levels.
The bad news is that it’s been nearly eight months since the ITA negotiations were suspended because of China’s dithering, and we’re all going to have to continue to wait for this internal, painfully slow process to play out.
This delay will certainly amp up the pressure on China to help deliver a strong ITA expansion outcome by the Asia-Pacific Economic Cooperation (APEC) leaders’ meeting in Beijing this November. At the very least, U.S. industry expectations will be elevated as we approach the gathering where the leaders of APEC’s 21 members will meet to discuss and promote trade and investment in the region and the world. As host of the APEC meetings this year, China will be in the hot seat.
As for timing, it seems China will be taking weeks, not months, to come up with a bigger list of products it wants included in ITA expansion. At least that’s our take-away from U.S. Trade Representative Michael Froman’s statement today on the outcome of the S&ED that included this riff: “We look forward to intensifying our work with China in the coming weeks with the goal of defining a list that is consistent with achieving an ambitious plurilateral agreement.”
Bottom line: it would have been welcome news to achieve a defining breakthrough with China on ITA expansion this week. At the same time, the S&ED provided another opportunity to put ITA expansion in front of very senior leadership in Beijing and spell out the broader implications of China’s foot dragging on the initiative. From what we are hearing, these senior leaders are now more informed and engaged, and that’s real progress.
On another positive note, the other parties in this negotiation remain engaged and continue to seem ready to quickly close on a deal. That was very apparent to us when we met about a dozen of the WTO members involved in the negotiations during the ITA Committee meeting last month in Geneva. We also learned that since the suspension, some have even used the time to do more homework so they can return to Geneva with even better offers.
So we wait while China’s labyrinthine bureaucracy grinds away on how far it can go on ITA expansion. With the APEC leaders’ meeting just around the corner, mother time is now working against Beijing.
Click here for the “U.S.-China Joint Fact Sheet Sixth Meeting of the Strategic and Economic Dialogue”