USA and China Agree Landmark ITA Deal

The USA and China have reached a new agreement on technology tariffs, which could cover as much as $1 trillion in trade.

A deal was reached earlier this month, expanding the Information Technology Agreement (ITA). President Barack Obama said that it “will contribute to a rapid conclusion to the broader negotiations in Geneva”.

The ITA defines tariffs on many technology products at 0%, but has not been updated since it came into effect in 1996. Last year (Display Monitor Vol 20 No 27 – 46) there were discussions in Geneva about its expansion. However, these were deadlocked (mainly by China), when a list of products to be covered could not be agreed upon. The USA, EU and Japan have been pushing for an update to the ITA for many months.

Yu Jianhua, China’s ambassador to the World Trade Organization, estimated earlier this year that the updated ITA would cost China as much as $27 billion in import tariffs, while gaining the country around $3 billion in export tariffs. However, the US-based think-tank The Information Technology & Innovation Foundation estimated that the import-tariff shortfall would be $6.4 billion – unless Beijing is understating the tariffs it charges on the affected products.

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The deal needs ratification before it comes into effect and there are hopes that the deal could be ratified by December. We’ll be watching developments as the previous ITA was the key factor in the duty issue that has plagued the display business in Europe over recent years. (BR)