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Ambassador Punke’s Statement on Information Technology Agreement (ITA) Expansion
March 17, 2014

Statement on Information Technology Agreement (ITA) Expansion
Ambassador Michael Punke
US Permanent Representative to the WTO / Deputy US Trade Representative

Meeting of the WTO ITA Committee
Geneva, Switzerland
March 17, 2014

As you all know, the United States has been a staunch supporter and leader in the effort to expand the product coverage of the ITA. While I wish that I was taking the floor to announce that we’ve achieved a breakthrough in the ITA expansion negotiations, unfortunately the talks remain at an impasse.

Despite the state of play, I would like to use this opportunity to make clear that completing the ITA expansion negotiations as soon as possible remains a top priority for the United States.  The deal could boost, according to some industry sources, annual global GDP by $190 billion.  Furthermore, it would help continue the momentum reached at Bali that the WTO is an institution that can deliver meaningful outcomes.

It is enticing how close we are to a deal.  This is a negotiation that is technically advanced and conceptually focused.  We could finish it in a week if all players were ready to make an appropriate contribution.

Last November, most ITA participants arrived in Geneva empowered to close a deal.  They made great efforts and contributions towards finalizing an ITA expansion deal. These efforts involved working to strike balanced solutions, making difficult trade-offs, and setting reasonable expectations with domestic stakeholders.

Unfortunately, after 11 days of intense negotiations, our collective efforts fell short, and the negotiations were suspended for a second time in just a few months.

The reason for the suspension is straightforward – the level of ambition displayed by the world’s largest trader in ICT products was simply not sufficient to close a deal. China came to the table with a limited mandate that did not provide sufficient space for a meaningful negotiation.

At the final meeting of ITA expansion Ambassadors in Geneva, there was a collective view from the vast majority of Ambassadors who spoke that there was no reason to continue negotiations until China could demonstrate improved ambition and a willingness to compromise.

I want to be clear that ambition is not just a matter of the number of tariff lines in the agreement, but also the quality of lines – that is, whether the products on the table reflect a fair balance of Members’ individual interests.  An outcome where one participant stands to reap the majority of the benefits of a deal, while the rest are left to wait for the next ITA expansion, will not bring us closer to conclusion.

While we fully recognize that no Member will get everything it wants, everyone needs to get enough out of a deal that they can sell it at home.  I emphasize that for the deal to work for the U.S., certain key products will need to be included.  In November, the U.S., and others, demonstrated flexibility and a willingness to compromise.  We have not yet received a positive response; the ball is squarely in China’s court.

While we remain disappointed that we were not able to reach an agreement last year, I am optimistic that we can still achieve success, But we can only get there if all Members are willing to contribute to a balanced and, most importantly, mutually acceptable outcome.

There are encouraging signs.

I recall then-Vice Minister Yu’s statement in November that the suspension of talks was “not the end of the road” for ITA expansion.

The United States is ready to get back on the horse, and to work towards a mutually acceptable outcome, but we need a clear signal that our partners are equally willing to work with us to achieve that goal.

As many of you know, the ITA was an important APEC initiative and has been an important APEC agenda item in recent years.  China is the current chair of APEC.  At a recent meeting in China, several APEC economies called for a successful conclusion of an ITA expansion deal in time for the meeting of APEC trade ministers in May.  We think this is a doable goal and we encourage China, as host country, to exercise leadership in helping to achieve this.

An ITA success would not only benefit our industry and economies, but it would also give a strong boost to the post-Bali credibility of the WTO’s ability to deliver successfully negotiated outcomes with the conclusion of the first tariff cutting initiative in 17 years.