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Ambassador Froman Announces Major Breakthrough on Negotiations to Eliminate Tariffs on Information Technology Products

Ambassador Froman Announces Major Breakthrough on Negotiations to Eliminate Tariffs on Information Technology Products

 An expanded ITA agreement will support well-paying jobs, boost domestic and global economic growth

November 10, 2014
Beijing, China

*As Delivered*

 “Well, thanks Josh, and I’d like to start with an announcement  on an important breakthrough we had in our negotiations with China on the Information Technology Agreement or ITA, and that’s news that the President just shared with the other APEC leaders at the Leaders’ Summit.

 “Last night, we reached a breakthrough in our ongoing efforts to expand the Information Technology Agreement. This is a WTO agreement that eliminates tariffs on high-tech products among 54 economies, including the U.S. and China.

 “To give you some idea of the importance of this agreement, the last time the WTO agreed to eliminate tariffs on IT products was in 1996 when most of the GPS technology, much of the medical equipment, software, and high-tech gadgetry that we rely on in our daily lives didn’t even exist.

 “In fact, since that time, global trade in these types of high-tech products have reached $4 trillion annually, and despite that explosion of trade, the coverage of the ITA products have never been expanded.

 “So that’s why, for the past two years, we have been working very intensively with our global partners to expand the Information Technology Agreement, but unfortunately, in December of 2013, those talks broke down due to disagreements over the scope of coverage—what list of products would be covered by the agreement, with most countries, led by the U.S., working to achieve an ambitious outcome.

 “Since that time, the United States and China have been working to close our differences, but without a breakthrough sufficient to resume the plurilateral negotiations in Geneva.

 “That finally changed here last night with an agreement between the U.S. and China that we expect will pave the way for the resumption of  ITA negotiations in Geneva, and their swift conclusion.

 “And that will be the first major tariff-cutting agreement in the WTO in 17 years. At a time when there have been a lot of FTAs and regional arrangements, the WTO hasn’t actually cut tariffs in 17 years, and the ITA represents the first opportunity to do that.

 “This is encouraging news not just for the U.S.-China trade relationship, it shows that the U.S. and China work together to both advance our bilateral economic agenda, but also to support the multilateral trading system. And it also underscores the importance of institutions like APEC, regional organizations. APEC actually gave birth to the ITA back in 1996. It’s always been a key part of the ITA, the APEC leaders have always called for a swift conclusion of the ITA, so this is another indication of the utility of forums like this.

 “Industry estimates have concluded that successfully concluding the ITA would:

  • Eliminate tariffs on roughly $1 trillion of global sales of IT products.
  • That it would contribute to global GDP by an estimated $190 billion.
  • And would support up to 60,000 additional U.S. jobs in technology and manufacturing.
  • And also boosting productivity around the world, particularly in developing countries

“So we are going to take what has been achieved here in Beijing back to Geneva and work with our WTO partners, and while we don’t take anything for granted, we are hopeful that we’ll be able to work quickly to bring  ITA to a successful conclusion. And that will help support good paying jobs in the United States, where we lead the world in creating and selling made-in-America high-tech products the world is hungry to buy.”

To learn more about the Information Technology Agreement (ITA), please click here.