Asian IT firms feel under-represented in FTA negotiations

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KUALA LUMPUR: About 60% of Asian information technology (IT), technology and telecommunications (telecoms) firms in Asia think their interests are not considered when governments conduct free trade agreement (FTA) negotiations, according to a report published by The Economist Intelligence Unit yesterday.

“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,” the summary of the report read.

Nevertheless, it reported 94% of companies in these sectors said the FTAs had boosted their exports to corresponding markets, according to findings of the HSBC-sponsored report on “Growing together? Free trade and Asia’s technology sector”.

It said many executives feel existing agreements have done little to promote change or harmonisation in 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% of Asian IT and telecoms firms want their governments to sign FTAs with more comprehensive provisions, while most technology firms (67%—the highest proportion of any industry in the broader survey) support a return to multilateral negotiations via the World Trade Organization.

“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 noted.

“Trade policy has struggled to keep up with Asian IT companies’ needs due to the fast-moving nature of the industry,” said The Economist Intelligence Unit managing editor David Line.

The report was partly based on the findings of a survey conducted in the first quarter of 2014 that included 123 IT and telecoms companies in eight Asia-Pacific markets, including Australia, China and Hong Kong.

This article first appeared in The Edge Financial Daily, on September 30, 2014.