John Neuffer photo
No Closure For ITA Expansion Negotiations

DATELINE GENEVA – Under cold leaden skies in this city that is home to the World Trade Organization (WTO), negotiations did not wrap up today with a final deal to expand the Information Technology Agreement (ITA), an agreement that would grow the global economy, foster innovation, and reduce consumer prices on innovative technologies the world over.

The news comes as a significant disappointment to negotiators who came to Geneva last week with high hopes that an agreement was within reach. The deal would have eliminated tariffs on roughly $1 trillion in yearly sales of tech products and boosted global GDP by an estimated $190 billion annually.

More specifically, the final package would have included roughly 200 tariff lines of products driving the digital economy and improving people’s lives, such as next-generation semiconductors known as MCOs, MRI machines, GPS devices, loud speakers, solid state drives, video game consoles, point-of-sale cards for game and software downloading, video cameras, and high-tech testing equipment. 

To be sure, a deal was ever so close, as participating economies made significant and difficult moves in an attempt to reach the goal line over the past week.  News reports suggest that South Korea, with high hopes of getting LCD panels included, demonstrated a willingness to consider an agreement without that tariff line with an eye on the broader importance of a successful outcome to the global economy and the WTO.

Others, such as Malaysia, Thailand, Israel, Australia, the European Union, and the United States, also offered last-minute flexibility that would have allowed several key products to make it across the finish line.  Costa Rica and Guatemala, as well, made constructive eleventh-hour shifts that would have kept them in the deal and underscored the importance of ITA expansion to smaller developing economies determined to integrate themselves even deeper in the tech global supply chains.

The inability to conclude boiled down to the fact that the Beijing breakthrough achieved on the margins of the Asia-Pacific Economic Cooperation leaders’ summit last month included a good package, but many economies felt it needed further tweaking.  Though it had raised its ambition level in the Beijing package, China was not able to move off that package.

What’s next?  There is a general sense that because the negotiations came within an eyelash of concluding, people want to let the dust settle from this round of talks and figure out how to finally conclude this deal.

Much hangs on successful conclusion of the ITA expansion negotiations, beyond the boost it would give to global GDP, jobs, and innovation. The WTO desperately needs to demonstrate it’s back in the business of opening markets around the world and ITA expansion remains the lowest hanging fruit in that regard.  So there is no disguising that today was a major setback, but there is an emerging feeling that it’s not time to throw in the towel quite yet. 

Public Policy Tags: Trade & Investment