U.S. Requests WTO Consultations With EU on IT Products
The Office of the U.S. Trade Representative has issued a press release announcing that the U.S. has requested World Trade Organization dispute settlement consultations with the European Union regarding the duties they are imposing on certain products that should be duty-free under the WTO Information Technology Agreement (ITA).
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(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.)
U.S. Challenges EU Duties on Products that Incorporate New Technologies
According to the USTR, 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, which were included in the ITA.
The U.S. challenges the EU's claim that it can charge duties on these products simply because they incorporate newer technologies or additional features, which the USTR states could impair continued technological development in the information technology industry and raise prices for millions of businesses and consumers.
(The USTR notes that this 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.)
EU Contends that Extension of Duty-Free Claims is Not Automatic
The EU argues that where changes in technology have given a product multiple functions - for example, a digital photo camera that also records large amounts of high-quality video - these products in many cases are objectively different products falling outside of the original product categories covered by the ITA and are classified as such by the EU and others. The EU adds that 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.
Dispute Settlement Panel May Be Requested After 60 Days
Consultations are the first step in a WTO dispute. If consultations fail to resolve the dispute within 60 days, the U.S. will be entitled to request that a panel be established to determine whether the EU is acting consistently with its WTO obligations.
USTR press release (dated 05/28/08) available at http://www.ustr.gov/Document_Library/Press_Releases/2008/May/US_Files_WTO_Case_Challenging_EU_Tariffs_on_Certain_Technology_Products.html
USTR fact sheet (dated 05/28/08) available at http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2008/asset_upload_file700_14920.pdf
EU press release (No. 55/08, dated 05/28/08) available at http://www.eurunion.org/eu/index.php?option=com_content&task=view&id=1765&Itemid=58
USTR Schwab's remarks on these consultations (dated 05/28/08) available at http://www.ustr.gov/assets/Document_Library/Transcripts/2008/May/asset_upload_file274_14915.pdf
Senate Finance Committee press release (dated 05/28/08) available at http://waysandmeans.house.gov/News.asp?FormMode=release&ID=658.