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China Craters ITA Expansion Talks

Dateline GENEVA:  After much erratic and obstructionist behavior by China over the course of the last ten days, it has just blown up the negotiations to expand product coverage of the Information Technology Agreement (ITA).  In a high-level meeting between the United States and China this afternoon, Beijing’s negotiators said they have zero mandate to move off their tepid list of import-sensitive products.  At a technical working group meeting of all the negotiating parties that immediately followed, China claimed it had exhausted all its resources and its flexibilities have come to an end.

At an anticipated meeting of Ambassadors later this evening, it is expected the break down in talks will be formalized.

This obviously leaves the other negotiating teams with a decidedly sour taste in their mouths.  Negotiators from all over the world were here and ready to close the deal this week.  China has been the spoiler. Its negotiators came to Geneva with a painfully low level of ambition, even though the Chinese would have been massive beneficiaries of a strong ITA expansion outcome. 

In addition, global industry has to be thinking through what this collapse foretells for China as a potential participation in other multilateral talks, such as the Trade in Services Agreement (TISA). 

Trade talks are about giving and taking.  For the past week-and-a-half negotiators here have been giving concessions, knowing they would be able to take away benefits.  China was ignoring the first half of the equation.  As the biggest tech exporter in the world, China naturally wants to see tariffs on those products in other markets eliminated.  But it also wants to use tariffs to protect its industries from imported products.  This have-your-cake-and-eat-it-too approach to trade is at the heart of this collapse in ITA expansion talks.

Public Policy Tags: Trade & Investment