The annual Asia-Pacific Economic Cooperation (APEC) Summit concluded on November 10, 2014
World leaders gathered in Beijing, China to discuss a variety of issues including reduction of trade barriers to Asian markets. Two proposed trade agreements were part of the dialogue — China is backing the Free Trade Area of the Asia-Pacific (FTAAP), while the USA is actively negotiating the Trans-Pacific Partnership (TPP). The TPP includes 12 countries in the Asia-Pacific region with China noticeably absent from the list. The goal of the TPP is “a high-standard market access package that provides comprehensive, commercially meaningful and duty-free access to each other’s goods markets and simultaneously lifts restrictions on services, investment, financial services, temporary entry of business persons, and government procurement.”1 From a compliance perspective, the TPP deliverables would include:
- Duty free (or duty reduced) tariff packages,
- Common rules of origin,
- Agreement on customs procedures, and
- Coordination of efforts to reduce smuggling and illegal transshipments.
At the conclusion of the Summit, the TPP released a Trade Ministers’ Report to Leaders citing “significant progress” towards the eventual finalization of the agreement.2
Despite the rival trade agreements, it seems that USA-China relations may have gained some ground during the Summit discussions. In another press release, it was announced that the USA achieved a breakthrough in its negotiations with China regarding the Information Technology Agreement (ITA), a World Trade Organization sponsored agreement to eliminate tariffs on high-technology products among 54 different nations.3 Talks had broken down in 2013 when the USA and China disagreed on the scope of the products to be covered in the agreement. The Director-General of the WTO praised negotiators from both countries for reaching an accord, noting that if the ITA is concluded, it would cover approximately 97% of the world trade in IT products and allow elimination of an estimated US$1.4 trillion in import duties.4 This would be a huge gain for those involved in technology markets, and may be the most significant outcome of this year’s Summit.
Photo courtesy of the APEC Secretariat
1 Office of the United States Trade Representative, November 10, 2014, http://www.ustr.gov/about-us/press-office/press-releases/2014/November/Trans-Pacific-Partnership-Trade-Ministers-Report-to-Leaders
2 Ibid.
3 Office of the United States Trade Representative, November 10, 2014, http://www.ustr.gov/about-us/press-office/speeches/2014/November/Froman-Announces-Major-Breakthrough-Negotiations-Eliminate-Tariffs-on-IT-Products
4 World Trade Organization, November 11, 2014, “Azevêdo hails breakthrough on the WTO’s Information Technology Agreement.” http://www.wto.org/english/news_e/news14_e/ita_11nov14_e.htm
