60% of Asian IT firms feel under-represented in free-trade negotiations: Study

A new report by The Economist Intelligence Unit finds that nearly 60 percent of IT, technology and telecoms firms in Asia think that their interests are not considered when governments conduct free-trade agreements (FTAs) negotiations. Nevertheless, 94 percent of companies in these sectors say that the FTAs they are using have boosted their exports to corresponding markets.

The report, ‘Growing together? Free trade and Asia’s technology sector’, that examines Asian businesses’ attitude towards FTAs and usage of their provisions is based in part on the findings of a survey conducted in the first quarter of 2014 that included 123 information technology and telecoms companies across eight Asia-Pacific markets: Australia, China, Hong Kong, India, Indonesia, Malaysia, Singapore and Vietnam.
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Technology executives interviewed for the report say governments and trade policy remain oriented towards “traditional” sectors like manufacturing and agriculture, historically the main sources of employment and generally more activist in trade matters.

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Many executives also feel existing agreements have done little to promote change or harmonisation in the areas where technology firms see the biggest barriers to international expansion-such as intellectual property protection, e-commerce and rules governing the use of data.

Some 76 percent of Asian IT and telecoms firms want governments to sign FTAs with more comprehensive provisions.

Most technology firms (67 percent-the highest proportion of any industry in the broader survey) also support a return to multilateral negotiations via the WTO. This implies a high degree of support for the currently stalled talks on the expansion of the WTO Information Technology Agreement (ITA).

Technology firms seem to have lower expectations for the major trade initiatives currently being pursued at the regional level, such as the ASEAN Economic Community and the Trans-Pacific Partnership.

“IT companies in Asia, particularly those that export goods, have clearly benefited from FTAs, but the industry is so fast-moving and innovative it is little wonder that trade policy has struggled to keep up with its needs. The cross-border nature of the business suggests a global agreement on ITA2 is the top priority,” David Line, the editor of the report, said.