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US likely to file complaint with WTO against European Union

US likely to file complaint with WTO against European Union
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First Published: Thu, May 29 2008. 01 44 AM IST

Battling it out: The dispute concerns the 1996 information technology agreement, which eliminates tariffs on high-tech products among the largest makers and consumers of electronic goods. The initial
Battling it out: The dispute concerns the 1996 information technology agreement, which eliminates tariffs on high-tech products among the largest makers and consumers of electronic goods. The initial
Updated: Thu, May 29 2008. 01 44 AM IST
The US will file a complaint at the World Trade Organization (WTO) on Wednesday over tariffs the European Union (EU) imposed on computer monitors, cable converter boxes and printers, people familiar with the case said.
The US trade representative’s office plans to say the EU is undermining a decade-old agreement to eliminate duties worldwide on technology products by contending that some new items fall outside the scope of the accord, the people say. Japan is likely to join in the case, one person said.
The dispute concerns the 1996 information technology agreement, which eliminates tariffs on high-tech products among the largest makers and consumers of electronic goods. The accord saves makers of those products $5 billion (Rs21,450 crore) a year, according to the Consumer Electronics Association, or CEA, a US industry group.
The initial case will involve three products, all developed after 1996, that the EU contends aren’t covered by the agreement.
The EU says flat-panel computer monitors that show videos are televisions, not computer components, and so face a 14% duty.
It also says printers with other capabilities, such as faxing, aren’t the same as devices that print only, and therefore face a 6% duty.
Cable converter boxes with Internet access have also been categorized to face a duty.
Battling it out: The dispute concerns the 1996 information technology agreement, which eliminates tariffs on high-tech products among the largest makers and consumers of electronic goods. The initial case will involve three products that the EU contends aren’t covered by the agreement. (Fabrice Coffrini / AFP)
US trade representative Susan Schwab scheduled a press conference on Wednesday to make an “announcement on the European Communities and the Information Technology Agreement,” according to a notice from her office. Her spokesman, Sean Spicer, declined to comment.
Peter Power, a spokesman for the European Commission in Brussels, declined to comment until the complaint is filed.
The issue has been a long-standing complaint of US high-tech companies and has been picked up by lawmakers. In March 2007, Democrats on the House ways and means committee urged the US to file a WTO complaint, identifying it as one of the six main barriers to American exports. Schwab threatened to bring a complaint at the WTO during a speech to the CEA’s conference in January.
“If countries can pick and choose which parts of trade agreements they can live up to, it undermines the whole WTO process,” said Michael Maibach, president of the European-American Business Council. “It’s an issue of principle.”
Japan’s trade ministry is considering its options, Kenichiro Koreda, a spokesman at the WTO section of the ministry of economy, trade and industry, said by telephone.
Filing a complaint is something the ministry has been considering “for quite some time,” he said, declining to elaborate.
South Korea in May last year began free-trade negotiations with the EU that include lowering tariffs on electronic products made in the country, according to the nation’s foreign ministry. Suwon, South Korea-based Samsung Electronics Co. is the world’s largest television producer and second biggest mobile-phone maker.
John Deng, Taiwan’s deputy minister of economic affairs, didn’t immediately return calls seeking comment.
Under WTO rules, the US has to first file a request for consultations at the Geneva-based organization, and then could ask for a three-judge panel to adjudicate the complaint after 60 days. US officials are worried about the precedent the technology duties might set, industry groups said.
“This has the potential to unravel the entire agreement,” said E. Sage Chandler, senior director for international trade at the CEA.
The US already has cases pending against the EU over aid its governments have provided Airbus SAS and over restrictions on the sale of genetically modified foods there.
(Pavel Alpeyev in Tokyo, Kevin Cho in Seoul, Chinmei Sung in Taipei and Jennifer Freedman in Geneva contributed to this story.)
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First Published: Thu, May 29 2008. 01 44 AM IST