US President Barack Obama’s administration yesterday said that it had achieved a breakthrough in negotiations with China to eliminate tariffs on an array of information technology products, from video-game consoles and computer software to medical equipment and semiconductors.
The understanding, reached during a visit to China by Obama, opens the door to expanding a WTO treaty on these products, assuming other nations can be persuaded to accept the same terms.
US officials predicted that a broader deal would be reached swiftly, now that the US had resolved long-standing issues with China.
Photo: Reuters
“We are going to take what’s been achieved here in Beijing back to Geneva to work with our WTO partners,” Michael Froman, the US trade representative, told reporters. “While we don’t take anything for granted, we’re hopeful that we’ll be able to work quickly” to conclude an expansion of the treaty, known as the Information Technology Agreement.
The breakthrough is likely to be the most tangible economic outcome of Obama’s visit to China, although US officials are holding out hope that he and Chinese President Xi Jinping (習近平) will also make progress in developing a common position on the reduction of carbon emissions.
Obama was scheduled to hold his first one-on-one meeting of this trip with Xi yesterday evening at a private dinner.
Officials said he was likely to press Xi to resume a US-China working group on cybersecurity issues, which abruptly stopped its discussions after the US accused several Chinese military officers of hacking.
“We did see a chill in the cyberdialogue,” US Deputy National Security Adviser Benjamin Rhodes said. “The fact that we pursued those cases demonstrates that we’re not going to stand idly by.”
“We do believe it’s better if there’s a mechanism for dialogue,” he added.
Speaking yesterday at a session of the APEC forum in Beijing, Obama credited the group with originating the work on reducing technology tariffs.
“It is fitting that we are here with our APEC colleagues to share the news that the United States and China have reached an understanding that we hope will contribute to a rapid conclusion of the broader negotiations in Geneva,” he said.
Talks with China over expanding the 1997 treaty on information technology broke down last year over the scope of the products covered by the agreement.
After intensive negotiations leading up to Obama’s visit, Froman said, the US and China agreed on Monday evening to eliminate more than 200 categories of tariffs.
While the US still exports many high-technology goods, China is the world’s dominant exporter of electronics overall and has much to gain from an elimination of tariffs.
Asian neighbors like Taiwan, South Korea and Japan increasingly find themselves supplying China’s huge electronics industry, deepening their economic dependence on decisions made in Beijing.
“With so many new products created since the agreement was concluded two decades ago, expanding the agreement’s coverage is imperative,” said Myron Brilliant, the head of international affairs of the US Chamber of Commerce. “With trade in tech goods surpassing US$4 trillion annually, the commercial significance of these negotiations is obvious.”
At a news briefing, Froman said negotiators had also made progress on the Trans-Pacific Partnership, a regional trade pact that is a centerpiece of Obama’s strategic shift to Asia.
While he acknowledged that sticking points remained, he said: “It’s become clearer and clearer what the landing zones are.”
Froman said that Obama would seek fast-track trade authority from the US Congress, but that the best way for the president to win congressional passage of the Trans-Pacific Partnership would be to reach the best possible deal.
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