infoTECH Feature

July 10, 2014

U.S. Pressures China on Tech Trade Issues

U.S. officials are pressuring China once again on tech trade issues, including those related to protection of tech products.

China happens to be the biggest exporter of IT products, so tech trade is important to its economy. It is apparently trying to protect some of its high-tech sectors, which have yet to compete successfully with markets in the United States and in other advanced economies.

In addition, European and U.S. leaders want to update the Information Technology Agreement (ITA (News - Alert)), which eliminated duties on PCs and phones, Reuters said. China is trying to get 60 new types of products, such as medical devices and next-generation silicon chips, excluded from the ITA.

"This is an area where concrete progress would have potential positive spillover effects into other negotiations between us," U.S. Trade Representative Michael Froman told the media recently. Froman also told the Financial Times that this week’s Strategic and Economic Dialogue between the United States and China is a good occasion to address these concerns.

“Under the agreement, countries commit not to impose tariffs and other trade barriers on IT products,” the Financial Times (News - Alert) explained in the report on the ITA.

In explaining the push by the United States, Tu Xinquan, vice dean of the China Institute for WTO Studies, told the newspaper, “Because the US has an advantage in these core technologies, of course they want China to lower import taxes on them.”

Froman, in a recent statement, when speaking about the sixth annual Strategic and Economic Dialogue, said, “The discussions we've had over the last two days have yielded progress on a number of issues, such as trade secrets, as well as on market reforms that will help further our goal of increasing competition and providing a more level playing field for American workers and businesses.”

"I'm pleased that one year after a major breakthrough on the US-China Bilateral Investment Treaty, we have received China's assurances about a timetable for moving forward with a critical phase of the negotiations regarding a ‘negative list,’” he added. "We had constructive discussions on the expansion of the Information Technology Agreement.  We look forward to intensifying our work with China in the coming weeks with the goal of defining a list that is consistent with achieving an ambitious plurilateral agreement. That would be a positive outcome for technology exports and American workers and businesses, as well as China's leadership of APEC [the Asia-Pacific Economic Cooperation summit] this year.”

The events come as members of Congress said they want to see more progress with China on economic issues. In a letter to the Obama administration, the legislators said China has to move away from state-owned enterprises and trade policies that “closes off their market,” The Hill reported. China, too, has “abandoned many of its market reforms and flouts its international obligations,” the letter also said. 

The members of Congress complained China “still does not have an adequate framework to protect intellectual property rights,” The Hill additionally reported. Expanding the ITA will “create substantial economic opportunities for both the United States and China,” the letter continues. “We are increasingly concerned that China appears to be standing in the way of an ambitious deal, seeking instead to exclude significant products from coverage and demanding unnecessarily long phase-outs of tariffs.”

There are also concerns in Congress about thefts of trade secrets and economic espionage which is directed at the United States and U.S. companies, and is claimed to come from China among other nations.




Edited by Adam Brandt
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