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TMCNet:  US files complaint over European tech tariffs

[May 28, 2008]

US files complaint over European tech tariffs

(AP Online Via Acquire Media NewsEdge) WASHINGTON_The United States filed a complaint Wednesday with the World Trade Organization over European tariffs on three categories of high-tech goods, including flat-panel computer monitors and some printers.

The duties, which are as high as 14 percent, make U.S. exports less competitive in the European Union, according to the Information Technology Industry Council, a trade association. The group's members include Hewlett-Packard Co., Apple Inc. and Cisco Systems Inc.

The complaint, strongly supported by the U.S. high-tech industry, charges that the EU's duties violate a 1996 WTO agreement that eliminated tariffs on information technology equipment.

"The EU is effectively taxing innovation," U.S. Trade Representative Susan Schwab said. "We wanted to make sure that the commitments to give duty-free treatment to these products would be maintained in the face of the evolution of technology."

The EU has said it can charge duties on the goods, which include cable and satellite boxes that can access the Internet and printers that can also scan, fax and copy, because they include new technologies developed since the agreement was signed.

Total worldwide exports of the products included in the complaint totaled $70 billion in 2007.

The WTO confirmed Wednesday that it received the U.S. complaint, which initiates a 60-day consultation period with the European Union. After that, the U.S. may ask a WTO panel to rule on the dispute. WTO panels can take 12 to 18 months to resolve disputes.

The European Commission said in a statement that it was willing to renegotiate the 1996 Information Technology Agreement to cover new products, but the United States has refused to do so.

"Both the spirit and explicit provisions in the ITA make it clear that extension to new products to reflect technological change would not be automatic, but based on periodic review by signatories," the commission said.

The EU said that the flat-panel screens cited by the U.S., for example, are capable of working with DVD players, not just computers, and are therefore properly classified as video monitors, which are not covered by the ITA.

Schwab said the ITA is intended to cover products even as new features are added.

If the agreement "only provided duty-free treatment to products with the technology that existed at the time the ITA was concluded, very few ITA products would be eligible for duty-free treatment today," she said.

High-tech trade groups in the U.S. said the EU's approach undermines the effectiveness of the agreement.

"The EU is systematically chipping away at the ITA," said John Neuffer, the Information Technology Industry Council's vice president for technology and trade. "We are very concerned that this process is going to continue and erode ... an extremely important trade agreement for our industry."

Leading manufacturers of flat-panel computer displays include Dell Inc. and Hewlett-Packard Co., Neuffer said.

The issue has also caught the eye of Congress. Almost 50 members of Congress, including Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee, urged the administration to file a case against the WTO in a May 21 letter.

U.S. trade officials raised their concerns about the EU's tariffs several times with European officials in the past 20 months, the U.S. Trade Representative's office said, to no avail.

Japan has also filed a complaint against the EU on the same issue, the USTR said.

Copyright ? 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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