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 user 2008-05-30 at 2:32:54 pm Views: 53
  • #19881
    EU-US trade row erupts over IT products
    US fights Europe over computer taxes
    2008 After months of silent scramble, a battle between the EU and the
    US on IT customs tariffs erupted after Washington decided to file a
    formal complaint to the World Trade Organisation (WTO) against European
    duties on certain high tech goods, including flat-screen TVs and
    multifunctional printers.At a conference in Singapore in December 1996,
    29 trade ministers signed the Declarationexternal on trade in
    information technology products. The declaration led to the adoption of
    the Information Technology Agreement (ITA) in July 1997.The EU, the US,
    Japan, Australia, Canada, Switzerland and Turkey were among the first
    participants in the agreement, which aims to reduce tariffs on
    Information Technology (IT) products.At the moment, the agreement is
    appliedexternal in around 70 countries in the world, but excludes
    important international players such as Brazil, Mexico and South

    Brussels has been pushing for months for the ITA to be
    renegotiated to include new states and review the set of goods
    concerned.The row is occurring while the new global trade pact, under
    discussion in the Doha Development Round, remains uncertain after six
    years of negotiations (see our Links Dossier).The official complaint
    was filed by the US, along with Japan, on Wednesday (28 May). It
    targets tariffs imposed by the European Union on a range of IT
    products, of which global exports are estimated to amount to more than
    €450 billion.The American and Japanese authorities are first requesting
    WTO dispute settlement consultations with the EU to resolve the issue.
    But the consultation procedure can only last a maximum of two months,
    and after that, in the absence of an agreement, WTO experts will be
    forced to take a legally-binding position.What has angered the US and
    Japan is the EU’s policy not to consider new products developed from
    goods already in the ITA as covered by the agreement. In other words,
    while traditional printers are duty-free in the EU, more recently
    evolved versions, also capable also of scanning or faxing, are not.

    US argument is that such technological developments were foreseeable
    and that new machines should benefit from similar tariff reductions as
    those already developed ten years ago. “We all know that technology is
    organic. New features are developed, and advances are made, almost
    before we walk out of the store, and certainly before the ink is dry on
    most of our agreements,” said US Trade Representative Susan Schwab.But
    the EU retorts that the deal made in 1996 is explicit regarding the
    products it covers. It insists that the only way to review the list is
    therefore to proceed to new overall negotiations on the ITA. Brussels
    says it has requested this already on several occasions but that the US
    has always opposed it.

    The products under scrutiny are LCD
    monitors and flat-screen TVs, which Brussels argues are different from
    computer displays, indeed covered by the ITA. The US and Japan are also
    calling for multifunctional digital printers (alongside traditional
    printers) and video recorders (alongside set-top boxes able to record
    but mainly to connect to the Internet) to be included.US Trade
    Representative Susan Schwab commentedPdf external : “Europe should be
    working with the United States to promote new technologies, not finding
    protectionist gimmicks to apply new duties to these products.”The
    European Commission’s Trade services reactedexternal  with the
    following statement: “The only way to adapt the ITA to changed
    technologies is to renegotiate the product scope of the ITA with all
    its signatories, as the ITA foresees. Such a renegotiation would also
    allow other problems encountered in trade of IT products, the
    non-tariff barriers and the geographical coverage of the ITA to be
    addressed. The EU has proposed such a negotiation, but the US has not
    followed up on such an offer.”"European industry is disappointed that
    the parties have not been able to find agreement within the ITA
    Committee in the WTO,” commentedexternal  EICTA, a digital industry
    association that includes US and Japanese giants like Apple and Sony
    and EU companies like Nokia and Siemens.”It is clear on both sides of
    the Atlantic that storm clouds are gathering. We hear ominous voices
    challenging the importance of concluding and respecting free trade
    agreements. Protectionism and economic patriotism are harmful to the
    economy, and lead to political and economic isolation,” the statement
    concludes.Comptia, a computing technology industry association (whose
    board is composed among others by representatives of Microsoft, Lenovo,
    Symantec and Siemens North America) “welcomesPdf  the joint US and
    Japan legal action at the WTO to formally raise a longstanding ICT
    trade policy issue on the Information Technology Agreement (ITA). This
    complaint presents a great opportunity for the EU to reject
    short-sighted temptations to hide behind protectionist tariffs”.