Visitors check a Lenovo computer at the 9th China Beijing International High-Tech Expo held in Beijing in May 2006. (Photo : Reuters)
The deal on the expansion of the Information Technology Agreement (ITA) has reportedly made significant progress, as the agreement is expected to have a vital impact on the tech industry, experts said on Monday, July 20.
The Financial Times reported on July 19 that negotiations at the World Trade Organization (WTO) have made breakthroughs and the signing of the largest tariff agreement on high-tech products in history may occur this week.
Experts said that global trade of IT products could benefit greatly once the agreement is signed, as the original ITA that was signed in 1996 was being upgraded after years of negotiation.
"The striking of a new ITA agreement would be a milestone in WTO history, as it would show that the WTO is keeping abreast with the times and is still the rule maker for cutting-edge technologies," He Weiwen, an executive council member at the China Society for WTO Studies, said.
He noted that this indicates that "a multilateral trade system offered by the WTO is still important despite rising challenges such as regional trade mechanisms."
ITA member economies had previously believed that an agreement would be reached during the 2014 Asia-Pacific Economic Cooperation meetings, when the U.S. announced it had concluded bilateral negotiations with China on the ITA expansion.
The report, however, said that the negotiations bogged down into a deadlock when South Korea blocked the deal between China and the U.S., claiming that the tariffs on products such as liquid crystal display (LCD) panels and lithium ion batteries were not removed.
Over the weekend, the U.S. has agreed to make small concessions that helped achieve a consensus, according to the report.
About $4 trillion worth of IT products worldwide are traded annually and the ITA update would lift tariffs on products from video game consoles to semiconductors that make up about $1 trillion of the total amount.
"China's IT industry accounts for a sizable proportion of the world's total, and both imports and exports of IT products will be boosted," He said.
He noted that weak companies will be forced to improve their technologies or face losing domestic market share.
The agreement on an updated ITA would be the first tariff-elimination deal at the WTO in almost two decades, which is expected to enhance the globalization of the world's IT industry, Zhang Rihui, an analyst with Wuhan Documentation and Information Center, said.
