Tariff-free technology products will impact domestic industry

November 12 Morning News, China and the United States reached a trade agreement in Monday, will reduce tariffs on a variety of High-tech products, the future, including medical equipment, GPS equipment, video game consoles and other imported goods will be zero tariff.

The agreement means that the price of these imported High-tech goods will be lowered in the future and will promote export trade in countries such as the United States. At the same time, some industries with weak competitive edge in the country may face some shocks, as the government's imposition of tariff protection barriers will no longer exist.

More imported products will be zero tariff

Michael Froman, US trade representative, said in Beijing in Tuesday that the two countries reached an agreement later in Monday to expand the Information technology trade Agreement (Michael Fromain) to cover medical devices, GPS equipment, video game consoles, semiconductor medical devices and other new products.

The agreement means a major breakthrough in the ITA expansion talks that have been stalled because of disagreements between the two sides. ITA is a multilateral agreement under the WTO framework, which came into force in 1997, aimed at cutting tariffs on information technology products.

Although the ITA agreement has been in force for 16, the catalogue has barely changed, and economies such as the United States and the European Union have been seeking to upgrade the deal in recent years and expand the coverage.

In 2012, ITA member States launched a widening round of negotiations, but negotiations have been slow because of the difficulty of reaching agreement among Member States on the list of products to be spread.

November 2013, the United States suddenly announced the suspension of negotiations, resulting in the spread of the siege negotiations stranded. According to reports, the main reason for the stalled negotiations is: China and the United States in the semiconductor chips, such as whether more than 10 products should be added to the spread of the list have different views.

The latest agreement means that China and the United States have agreed on the ITA expansion list. And if the agreement reached by the US and China can be unanimously approved by the ITA members in December, more imported High-tech products will be zero tariffs in the future.

New Protocol Impact

If the government were to impose zero tariffs on more imported High-tech products, the prices of these products would probably be lower in the market than they are now, and consumers who bought the goods would receive more benefits. At the same time, the reduction in tariffs will also promote the export of these products and expand the size of the exporting countries ' trade.

In the High-tech sector, the United States, Europe, Japan and other economies in the forefront of the industry. Lowering tariffs favors their high-tech exports, which is why they are so keen to push the ITA list to expand.

It is noteworthy, however, that without tariff barriers, the influx of these foreign products into the domestic market could have a knock-on impact, or even a devastating blow, on similar industries with weak domestic competitiveness.

It is precisely for these reasons that many Member States will focus on the development of ITA's list by focusing on whether zero tariff imports will have a significant negative impact on their industries. It is therefore not difficult to understand why the ITA expansion list is progressing so slowly.

The details of the agreement between China and the United States are unclear. But industry insiders expect that on some important products, China should demand a gradual reduction in tariffs to protect the country's related industries.

Shouwen, Assistant Minister of Commerce, said at a Chinese-foreign media briefing last week that China had a very positive stance on ITA's expansion negotiations, but that any negotiations should be "given" and that a concerted effort would be needed to make concessions before an agreement could be reached.

(Responsible editor: Mengyishan)