U.S. Presses EU on Tech Tariffs

U.S. trade officials asked the WTO (World Trade Organization) on Monday for a dispute panel to settle a row with the European Union over tariffs on technology, saying talks with Brussels had failed to reach an agreement. The EU rejected U.S. assertions that it was violating the terms of a 1996 WTO accord aimed at limiting barriers to hi-tech trade, suggesting it would fight the case stoutly. Washington's move marks an escalation in an increasingly rancorous dispute over the WTO's ITA (Information Technology Agreement) which eliminated duties on a range of high-tech goods from July 1997 to encourage trade.

The United States, along with Japan and Taiwan, are asking the World Trade Organization to establish a dispute settlement panel to review whether the European Union has failed to accord duty-free treatment to some technology products covered by the WTO Information Technology Agreement.

According to the U.S. complaint, the ITA products include flat-panel computer monitors and certain computer printers that can also scan, fax and/or copy. The United States claims the items are covered by the ITA and should be afforded duty-free status on a non-discriminatory basis.

"We regret that formal consultations have not been successful in resolving our concerns over the duties that the EU is imposing on several high-tech products," United States Trade Representative Susan C. Schwab said in an Aug. 17 statement. "The EU committed to bind and eliminate duties on ITA products in its WTO tariff schedules. We believe that these duties are inconsistent with the EU's commitments on these products and that they discourage technological innovation in the IT sector."

The dispute resolution panel is the next step in the formal WTO dispute settlement process. The United States requested WTO consultations with the EU on May 28, and consultations were held in late June and mid-July. When the consultations failed to resolve the dispute, the United States requested that a dispute settlement panel be established to determine whether the EU is acting consistently with its WTO obligations.

Japan and Taiwan also requested consultations with the EU on May 28 and June 12, respectively, and have joined the United States in requesting the establishment of a dispute settlement panel.

The EU claims it can now charge duties on these products because they incorporate technologies or features that did not exist when the ITA was concluded. The EU's approach, Schwab said, threatens to "impair continued technological development in the information technology industry and raise prices for millions of businesses and consumers."

According to the United States, global exports of these products were estimated at more than $70 billion in 2007.