US groups say China jeopardising new technology trade pact

WASHINGTON (REUTERS) - A United States (US) industry group accused China on Tuesday of jeopardising international negotiations to eliminate tariffs on close to 260 technology products by asking to exclude more than 100 of the products from the proposed deal to protect domestic manufacturers.

China is one of 20 World Trade Organisation (WTO) members, along with the US and the 27-nation European Union (EU), that has been negotiating for months to expand the 1996 Information Technology Agreement (ITA).

The original pact eliminated tariffs on computers, semiconductors, software, fax machines, telephones and other information technology goods among member countries.

An expanded agreement could cover additional consumer goods such as flat-screen TVs, speakers and headsets as well as new types of semiconductors and other technology goods.

But now, "China is asking for the removal of more than 100 products from the ITA negotiation, which cannot be viewed as a meaningful effort, said Ms Sage Chandler, vice president for international trade at the Consumer Electronics Association.

"The Chinese position should be responsible, with a serious but limited list of products it wishes to exclude from lower tariffs," Ms Chandler said.

Many negotiators had hoped to reach agreement in Geneva this week on a final list of products that would be covered by the expanded ITA pact, but China's request to exclude so many products has thrown that possibility into doubt.

"What was so stunning about the size of the list is that China stands to reap significant benefits from an ambitious ITA expansion outcome. More immediately, China's list threatens to hugely dilute the ambition level of the exercise and represents a major roadblock to a successful outcome this week," Mr John Neuffer, senior vice president at the Information Technology Industry Council, a US group, said in a blog.

At a meeting chaired by Canada on Tuesday, 15 of the 20 WTO ambassadors involved in the talks voted to suspend the negotiations unless China comes back to the group with a more reasonable offer, one of the ambassadors said.

If China does not respond by mid-day on Wednesday, the talks will be put on hold, the ambassador told Reuters.

Once negotiators came up with a draft list of 256 products on which to cut tariffs, countries were asked to identify any "sensitive" items that they wanted to exclude from the agreement or reserve for long tariff phase-outs.

China's list totalled 148 products, including about 106 that it wanted to exclude, the ambassador said.

Countries with the next highest number of sensitive items were Thailand with 68 and El Salvador with 62, the ambassador said. The EU identified 10 sensitive products, the US one and Canada zero, he said.

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