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You can't have that many! China scuppers US, EU tech tariff talks

Duty-free IT negotiations collapse thanks to China's wishlist of exclusions

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The EU and the US have accused China of continuing to block attempts to get rid of trade tariffs on technology goods by asking for far too many exclusions.

The various governments have been discussing the expansion of the Information Technology Agreement at the World Trade Organisation (WTO), where China has been trying the others' patience by asking for tens of items to be excluded from the list of products.

"The EU regrets that China has so far been unable to contribute to the negotiations of the ITA in a way that is consistent with China's position as the largest world exporter of IT products," said EU IT trade commissioner Karel De Gucht in a statement.

"I call on China to urgently withdraw its excessive requests for exclusions of IT products from the negotiations, so that the talks can resume. We cannot afford to lose the momentum for a deal which would liberalise over EUR 1 trillion of trade, corresponding to 7% of total world trade in goods."

Nations are attempting to liberalise trade on over 200 IT products, but China wants to treat 141 of those as “sensitive” and exclude 59 goods completely from the negotiations.

The EU said that it was willing to accept a large number of China's requests, but it still wanted the country to reduce the number of exclusions.

"The EU, along with other ITA participants, considers that a deal cannot be reached on that basis as it would be imbalanced," the European Union's delegation to the WTO said.

"If China's requests were accepted, the list of products to liberalise would contain a very large number of products of important export interest to China, including quite a number of them which are sensitive for the EU, but many products of export interest for the EU would be excluded.

"The EU considers that it is reasonable to expect from the world's largest IT exporter that they can agree to liberalise not only the products of interest to them but also those of interest to the rest of the ITA Members."

The US backed Europe's position, with trade representative Michael Froman calling China's refusal to back down "disappointing".

"Rather than heading toward a meaningful agreement at the WTO Ministerial, this puts the talks at serious risk of breaking down altogether and raises questions about China's commitment to meet the standards of negotiations in which it seeks to participate," he said in a canned statement.

Talks had already stalled out back in July when China had 106 items on its list of exclusions. The negotiations started up again when the country indicated it was willing to climb down a bit. But if they're not willing to back off further, the stand-off could end the deal altogether.

John Neuffer, senior veep of global policy at advocacy organisation the Information Technology Industry Council, said on the body's blog that China had "cratered" the talks.

"After much erratic and obstructionist behaviour by China over the course of the last ten days, it has just blown up the negotiations to expand product coverage of the ITA," he wrote.

"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.

"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." ®

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