EU, US and China ready to sign up to global tariff agreement

The US, China and the EU are expected to sign up this week to what would be the biggest tariff agreement struck at the World Trade Organisation in almost two decades.

A weekend breakthrough clears the way for barriers to be dropped globally on more than 200 types of high-tech products.

Negotiations over the 1996 Information Technology Agreement (ITA) have been stalled since last November, when US president Barack Obama announced a breakthrough in negotiations with China.

Stand-off

That US-China agreement, however, prompted new stand-offs between China and

South Korea

and China and the EU that until this weekend prevented what the global tech industry sees as a badly needed and long-delayed update to the rules governing the trade in everything from video game consoles to semiconductors.

In the deal, the US agreed to further small concessions to China in order to help both South Korea and the EU secure their own deals with Beijing.

The new compromise brokered by the US and WTO director-general Roberto Azevedo is due to be brought to the capitals of the 80 governments in the ITA discussions for approval before a Friday deadline.

With all the remaining major players involved in the weekend breakthrough, people close to the negotiations said that deadline was now largely procedural.

"We are confident that all parties will now give formal approval to their participation in what would be the first tariff-elimination deal at the WTO in 18 years," said US trade representative Michael Froman.

Deadline

In a statement, the EU said it also expected all parties to sign on or before the Friday deadline. Global trade in IT products is worth about $4 trillion annually and the update would see tariffs lifted for goods that make up about $1 trillion of that total.

South Korea had objected to the deal struck by the US and China because it did not remove tariffs on important products such as LCD display panels and lithium ion batteries, according to people close to the negotiations.

The EU and China had also been in a stand-off over a number of categories, including analogue car radios. – Copyright The Financial Times Limited 2015