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U.S. Files WTO Case Challenging EU Tariffs on Certain Technology Products

 

 

WASHINGTON – United States Trade Representative Susan C. Schwab announced today that the United States has requested World Trade Organization (WTO) dispute settlement consultations with the European Union (EU) regarding the duties they are imposing on certain products that should be duty-free under the WTO Information Technology Agreement (ITA).

“It is critical that the European Union live up to its ITA obligations instead of imposing new taxes and duties on innovative technologies,” Schwab said.  “The EU should be working with the United States to promote new technologies, not finding protectionist gimmicks to apply new duties to these products.  Therefore, we urge the EU to eliminate permanently the new duties and to cease manipulating tariffs to discourage technological innovation.”

Japan also announced today that it has requested dispute settlement consultations with the EU on this matter.

Background

The EU in the past several years has adopted a series of measures that resulted in new duties on imports of specific high-tech products – cable and satellite boxes that can access the internet, flat panel computer monitors, and certain computer printers that can also scan, fax and/or copy.  Global exports of these products were estimated at over $70 billion in 2007.

These electronic products were included in the ITA.  The ITA is a plurilateral agreement negotiated under the auspices of the WTO in 1996 that eliminated duties/import tariffs on a wide range of information technology products.

These IT products are used by millions of people every day, and produced by both developed and developing countries.  However, the EU claims it can now charge duties on these products simply because they incorporate newer technologies or additional features. 

In effect, the EU is taxing innovation – a move that could impair continued technological development in the information technology industry and raise prices for millions of businesses and consumers.

The United States has raised its concerns with EU officials on repeated occasions over the past 20 months in both bilateral and multilateral settings.  The issue has been the subject of at least four rounds of informal discussions under the auspices of the WTO ITA Committee in Geneva over the previous year.

The first step in a WTO dispute is for both parties to formally consult.  If consultations fail to resolve the dispute within 60 days, the United States will be entitled to request that a panel be established to determine whether the EU is acting consistently with its WTO obligations.

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