The top US trade official has warned China that a proposed bilateral investment treaty and other global negotiations could be in jeopardy if the two sides fail to resolve a stand-off over liberalizing the $2 trillion annual trade in high-tech products.
In an interview with the Financial Times, Mike Froman, the US trade representative, said Washington was eager to use this week's annual US-China Strategic and Economic Dialogue to break the deadlock over updating the 1996 Information Technology Agreement.
A failure to get a deal on trade in IT would amplify opposition in the US Congress to other trade deals with China, according to US officials. It would also be "an important data point as to other negotiations that China may be interested in as well," Mr Froman added.
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The stand-off has hinged on China's push to exclude around 60 new product categories, including medical devices and next-generation silicon chips, from the ITA. Under the agreement, countries commit not to impose tariffs and other trade barriers on IT products.
Now the world's biggest exporter of IT products, China remains eager to protect some of its nascent high-tech industries, which are not yet competitive with those in the US and other developed markets.
Mr Froman said the US and China had made progress in negotiations both at, and since, an Apec trade ministers' meeting in May. Other people close to the talks said the discussions have narrowed to about a dozen product categories on China's long list that the US is particularly interested in including in the agreement.