Imported GPS devices may be exempt from tariffs, posing challenges to the domestic industry.

According to media reports, U.S. Trade Representative Michael Froman stated that China and the United States have achieved a breakthrough in negotiations to eliminate tariffs on information technology products. He expects these advances to lay the groundwork for the Information Technology Agreement (ITA) talks scheduled to take place in Geneva at the end of the year. Froman said that on the evening of the 10th, China and the United States reached an agreement to expand the scope of the ITA, imposing zero tariffs on a wide range of tech products, including GPS devices. Other key items covered include medical equipment, video game consoles, semiconductors, and various emerging technologies.

It is of paramount importance for China and the United States to reach an ITA agreement.

The Information Technology Agreement (ITA) entered into force in April 1997, and China committed to joining the agreement during its negotiations to accede to the World Trade Organization (WTO). The agreement eliminates tariffs on a wide range of high‑tech products, covering six categories: computer equipment and parts, telecommunications equipment, semiconductor equipment and parts, software, and scientific instruments. However, with rapid technological advancement, this initial list no longer adequately encompasses today’s cutting‑edge products; over the 16 years since the ITA’s entry into force, the product coverage has remained virtually unchanged. Consequently, the United States, the European Union, and Japan have been seeking to expand the scope of tariff‑free items under the agreement to better reflect the latest developments in the global technological landscape.

At a briefing for Chinese and foreign media held on November 4, Assistant Minister of Commerce Wang Shouwen stated that the ITA expansion negotiations are a highly significant undertaking within the WTO framework, involving global trade valued at US$3 trillion out of a total global merchandise trade volume of approximately US$18 trillion. “The trade covered by these expansion talks accounts for one-sixth of global trade, making them an extremely important negotiation to which China attaches great importance.”

In late May 2013, reports indicated that China and the United States might reach an agreement within two months. However, by November 2013, the U.S. abruptly announced the suspension of negotiations, bringing the expansion talks to a standstill. The primary reason for this impasse was the divergence between China and the United States over whether more than ten products, including semiconductor chips, should be added to the expanded list. This has also been a key factor behind the slow progress since ITA member countries launched expansion negotiations in 2012, as member states have struggled to agree on the specific list of products to be included.

The agreement reached between China and the United States is crucial to achieving the goal of expanding the scope of tariff-free treatment under the Information Technology Agreement. According to the plan, the accord signed by China and the United States will be submitted for ratification by the 54 economies participating in the Geneva ITA negotiations. U.S. officials stated that they are confident these economies will approve the agreement, as the United States has already held consultations with other countries.

According to the announcement by the Office of the United States Trade Representative, the expanded Information Technology Agreement will cover 200 tariff lines, with exemptions extending to medical devices, GPS equipment, video game consoles, gaming software, and next-generation semiconductors. This marks the first major reduction in tariffs under the WTO framework in nearly 17 years.