EU Seeks to Expand Technology Trade Accord After U.S. Complaint
Sept. 15 (Bloomberg) -- The European Union, facing a trade complaint by the U.S., Japan and Taiwan over tariffs on imported electronic equipment, will propose expanding the list of such products exempt from customs duties.The proposal is to be presented today as the World Trade Organization expands the 1996 Information Technology Agreement that was designed to buoy trade in electronic and telecommunications products by eliminating tariffs on certain goods. Those products account for more than $1.5 trillion of exports worldwide, or a fifth of total world exports of manufactured products, up from $600 billion in 1996.
``The ITA remains a milestone duty-free agreement,'' EU Trade Commissioner Peter Mandelson said in a statement in Brussels. ``But it risks being left behind after 12 years of technological development. We need an ITA for the 21st century that will continue to benefit our customers and businesses.''
When the U.S. and Japan lodged their complaint against the EU in May, they said the 27-nation bloc is undermining the ITA by insisting that some new products fall outside the scope of the agreement. The initial case involved three products, all developed after 1996, that the EU contends aren't covered by the accord: flat-panel computer monitors that show videos, cable converter boxes with Internet access and printers with other capabilities, such as faxing.
The EU's statement on its proposal doesn't identify which goods it would like to add to the ITA, saying only that it wants to give priority to multifunctional products.
Commercial Losses
The Bush administration has pressed Europe on the issue for more than two years. While the U.S. exports less than 5 percent of the $11 billion Europe imports of those three goods, its commercial losses are more wide-ranging, U.S. and industry officials have said.
The EU proposal seeks to abolish all and prevent the creation of new non-tariff barriers affecting technology products, review the product coverage, ensure that the revised ITA takes technological development into account, and include major producers of such goods that remain outside the accord.
The deal originally had 29 signatories representing more than 90 percent of world trade in information-technology products. It's since grown to 43 signatories representing 70 countries or separate customs territories and more than 97 percent of global trade in information technology, the WTO says.
Separate Issue
Today's proposals aren't likely to settle the spat with the U.S., Japan and Taiwan. While the U.S. declined to comment on the EU's proposal, which it hasn't seen, the Trade Representative's office said expanding the ITA to cover new goods ``is a separate issue and does not resolve our concerns about maintaining duty- free treatment for products already covered under our present commitments.''
``We are, of course, open to ideas for resolving the WTO dispute, but if the EU is truly interested in providing duty-free treatment for IT products, it's unclear why it continues to apply duties to the ITA products that are the subject of the dispute,'' said Gretchen Hamel, a USTR spokeswoman. ``Providing duty-free treatment to products already covered does not require a new negotiation.''