Sat, Jul 02, 2016 - Page 12 News List

Ministry to join push for ITA tariff cut compliance

WTO EFFORT:Four nations have failed to implement the cuts on schedule, with Japan and South Korea blaming the delay on the lack of legislative approval

By Lauly Li  /  Staff reporter

The Ministry of Economic Affairs yesterday said it would work with the US and the EU in demanding that China, South Korea and other nations cut tariffs for their information technology (IT) products in accordance with the expanded Information Technology Agreement (ITA).

A total of 24 WTO members, including EU members, in July last year agreed to expand the tariff-reduction program for IT products by removing tariffs from 201 products — valued at US$1.3 trillion — within seven years of the accord taking effect, the ministry said.

Most of the members who joined the WTO’s expanded tariff-reduction scheme were supposed to lower the tariffs on IT products beginning yesterday, but China, South Korea, Japan and Costa Rica failed to implement the cuts, saying that they could not obtain the approval from their legislature before July this year, the ministry said.

“We will join forces with the US and the EU to demand that the four countries comply, via bilateral and multilateral trade occasions. They should fulfill their promise like we did,” an official at the ministry’s Office of Trade Negotiations (OTN) said by telephone.

The official, who declined to be named, denied the possibility that China was deliberately delaying implementation of the program.

“As China will come under international pressure for its delay, I think it will not intentionally do it,” the official said.

However, there had been speculation since December last year that Beijing would postpone implementation, mainly because the WTO members pressured China to shorten its tariff-elimination period.

Former deputy minister of economic affairs Bill Cho (卓士昭) once said that China had been rather “difficult” to deal with during the negotiations, adding that in order to pressure Beijing, several WTO members, including Taiwan, the EU, the US and Japan, had to increase the number of goods whose duties should be removed after the pact takes effect.

The OTN official said the main reason Japan could not carry out the scheme was that the Japanese government had sent the expanded ITA program with the Trans-Pacific Partnership (TPP) to the Diet.

“There are noises over the TPP and that subsequently delayed the approval for the expanded ITA scheme,” he said.

South Korea is also struggling to win legislative approval, the official said.

Taiwan, the US and the EU might demand the four exercise their administrative rights to lower tariffs before getting final approval from their legislatures, he said.

If the four continue to delay the tariff-reduction scheme’s launch, it would tarnish the WTO’s reputation and have a negative impact on the global trade in IT products, the ministry said.

Their failure to implement the ITA on time would also be a negative example for the negotiations for the WTO’s Environmental Goods Agreement and Trade in Services Agreement, the official said.

The ministry said that Australia, Switzerland, Guatemala would start to carry out their first-phase tariff reduction from January next year, while the Philippines is to cut duties a year from now.

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