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USTR says the EU is creating ''protectionist gimmicks'' to limit imports

WASHINGTON, DC – 05/28/08 – The US has filed a complaint with the World Trade Organization charging that the European Union (EU) is undermining a mutual agreement to eliminate duties worldwide on the global trade in technology products.

The EU, the filing states, claims that select new items – namely, cable or satellite set-top boxes with internet access, flat-panel computer monitors, and computer printers which can scan, fax, and copy – should enter the EU duty-free under the terms of the WTO's Information Technology Agreement (ITA).

The EU responded to the filing, saying the products in question fall outside the scope of the ITA because they were developed after 1996, the year the agreement went into effect.

The ITA, the EU says,”does not apply when changes in technology mean a product now has multiple functions.”

For example, Brussels asserts that the flat-panel monitors cited by the US should properly be classified as video monitors because they can also be used with DVD players, and that computer-top boxes with internet access should be seen as video recorders because they can record live TV.

The US, “has itself changed its mind over multi-functional digital copiers,” the EU said, adding, “The only way to adapt the ITA to changed technologies is to renegotiate the product scope of the ITA with all its signatories.”

US Trade Representative Susan Schwab issued a statement on the filing saying, “We urge the EU to eliminate permanently the new duties and to cease manipulating tariffs to discourage technological innovation,'' adding that Japan was joining the US in filing the complaint with the Geneva, Switzerland-headquartered WTO.

The European Union, said Schwab, “should be working with the United States to promote new technologies, not finding protectionist gimmicks to apply new duties to these products.”

The ITA eliminates tariffs on high-tech products among the world’s largest makers and consumers of electronic goods and saves makers of those products $5 billion a year in import tariffs on shipments to non-EU markets, according to the Consumer Electronics Association, the US industry group that has come out in favor of the WTO filing.

According to the Office of the USTR, global exports of the three computer peripherals were valued at an estimated $70 billion in 2007.

Under WTO guidelines, the US has to first file a request for consultations with the WTO before it requests a three-judge panel to adjudicate the complaint after 60 days.

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