China and the US yesterday reached an agreement that paves the way for the slashing of tariffs globally on high-tech goods and may mark the start of a new phase in the trade relationship of the world’s two largest economies.

The deal announced in Beijing by US President Barack Obama broke a deadlock of almost 18 months in negotiations over updating the World Trade Organisation’s 1996 Information Technology Agreement to include products such as video game consoles and next-generation semiconductors. Its larger impact, however, may be on the US and China’s economic and trade relations and how they work together in larger forums.

“This is encouraging news not just for the US-China trade relationship,” said Mike Froman, the US trade representative. “It shows that the US and China can work together to both advance our bilateral economic agenda but also to support the multilateral trading system.”