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China urged to join WTO tech agreement

By Fang Yunyu (Global Times)

08:54, June 03, 2013

Now is a good time for China to join the technology agreement of the World Trade Organization (WTO), as it will do more good than harm, experts told the Global Times over the weekend.

The US, China, European Union, and more than 20 other countries are expected to reach a trade agreement removing duties on technology products, Reuters reported Thursday, citing US technology industry insiders.

"We're quite optimistic we're going to get this across the finish line by the end of July," John Neuffer, a senior vice president at the Washington-based Information Technology Industry Council, told Reuters, referring to the planned expansion of the WTO's Information Technology Agreement (ITA).

Calls to the Chinese Ambassador to the WTO Sun Zhenyu were not answered Sunday, and Neuffer could not be reached by press time.

Zhao Xianquan, general office director of the Ministry of Commerce (MOFCOM), told the Global Times that he currently has no information regarding the issue.

The ITA is a treaty that places zero tariffs on various technology products, and the talks are aimed at expanding it to include more countries and products.

"As China's foreign trade growth is slowing, now is a good time for our country to join the treaty," Ye Qing, a professor with the School of Public Finance and Taxation under the Zhongnan University of Economics and Law, told the Global Times Sunday.

China's foreign trade last year rose 6.2 percent from a year earlier, missing its annual growth target of 10 percent, and well below the 22.5 percent year-on-year growth registered in 2011.

Ye noted that if tariffs are removed for Chinese technology products, many domestic companies, such as PC manufacturer Lenovo Group and telecom equipment maker Huawei Technologies Co, will see significant benefits.

"As the export costs for technology products decline, Chinese companies will be able to purchase more foreign products to strengthen their goods and service quality," Sang Baichuan, director of the Institute of International Business at the University of International Business and Economics, told the Global Times Sunday.

Chinese tech companies will also face more pressure, Sang noted, as domestic consumers will be more eager to buy foreign products if China joins the ITA.

For example, the current import tariff on an iPhone is 10 percent. If China joins the ITA as expected, Chinese consumers will see a significant drop in prices of iPhones and other popular international products.

"Of course some Chinese companies will be under pressure from intensified competition from their foreign peers. But it would be a good thing for the industry's development as a whole, as it will push them to improve their competitiveness," said Sang.

Li Jian, a researcher with the Chinese Academy of International Trade and Economic Cooperation under MOFCOM, echoed Sang's view, and told the Global Times that with the removal of tariffs on tech products, Chinese companies will be better integrated into the world's production chain.

Alex Ely contributed to the story

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