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08/12/2016

EU leaders urged to push China on IT trade

Digital

EU leaders urged to push China on IT trade

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European digital industry representatives have called on EU leaders to pressure China into lifting trade tariffs on IT products, during the EU-China summit in Beijing today (21 November).

The summit in Beijing is the first meeting between EU officials and the new Chinese leadership.

World Trade Organization negotiations about an expanded Information Technology Agreement (ITA) have reached stalemate in Geneva this week due to disagreements between China and several other countries, according to industry representatives involved in the talks.

China is currently holding out for exclusion of 57 different ICT products from the scope of the ITA, which seeks to abolish import tariffs in order to stimulate trade (see background).

These include micro computer chips found in a wide range of IT products as well as various types of computer monitors.

Other countries want fewer tariffs than China

By comparison, the European Union seeks to exclude a handful of products from the scope of the ITA, including TVs, the US seeks to exclude just one item, fibre optic cable, and Japan does not want to exclude anything.

DigitalEurope, an EU trade association which represents some of the world’s largest IT, telecoms and consumer electronics companies, has urged China "to show good faith and reduce sharply its long list of exclusions”.

“Chinese and European leaders have an excellent opportunity this week to give a positive political stimulus to the talks. We urge them to use their summit to help the ITA talks progress,” said John Higgins, Director General of DigitalEurope. 

Lifting tariffs on technology products as proposed in the ITA would eliminate an estimated €8.5 billion in tariff costs globally in a year, according to an analysis by the Brussels-based think tank ECIPE.

“An expanded ITA will lead to increased global trade in digital products. As well as delivering major benefits on a global scale in terms of productivity, economic growth and the creation of new jobs, it will also benefit the users of technology in the form of lower prices and greater choice,” Higgins said.

Selling arms to Asia

Meanwhile, in a new policy brief for think-tank the European Council on Foreign relations – “Divided Asia: the implications for Europe” – Francois Godement argued that Europe should develop a bold new Asia strategy.

The paper called for the development of a Europe-Asia-Partnership (EAP) to match the US-backed Trans Pacific Partnership – but differing from the latter in offering China the opportunity to join, and a common strategy for Europe’s arms sales to Asia.

“Asia is not interested in Western imports of multilateral security institutions and international arbitration, and the EU should abandon its efforts to transfer its own post-war solutions to the Asian situation,” said Godemont.

“Instead, it should focus on rewarding compromise and build on its growing arms trade with the region to take a more central security role,” he added.

Background

The EU has presented plans in 2008 to re-negotiate the 1997 Information Technology Agreement (ITA), which governs trade in IT products at the World Trade Organization (WTO).

The proposal would seek to extend the agreement to a larger array of goods and came amid accusations from the US, Japan and Taiwan that the EU was imposing excessive tariffs on imported high-tech goods such as flatscreen TVs and multifunctional printers.

>> Read: EU seeks to dodge IT row with trade pact overhaul

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