- The Washington Times - Tuesday, September 16, 2008

GENEVA | Under pressure from the United States and Asia, the European Union proposed Monday to eliminate taxes on imports of newly developed high-tech goods in the hope of avoiding a lengthy and costly World Trade Organization dispute.

Brussels said it wants to “update and expand” a 1996 WTO agreement that ended tariffs on information technology equipment by granting the special treatment to new products that have entered the market since the accord went into effect.

The U.S. says these new products are already covered by the deal, and charges the 27-nation bloc with breaking the rules.

The EU said in a statement that negotiations would solve disagreements “within a matter a months, not years” - a reference to the numerous disputes between the trans-Atlantic powers that have dragged on for long periods of time.

Brussels believes that changes in the agreement “can only be made on the basis of consensus … and not as a result of litigation by some members.” It wants the deal extended so that it includes more countries and helps eliminate other barriers to imports than tariffs.

The U.S., Japan and Taiwan all filed suit earlier this year over European tariffs on flat-panel computer monitors, cable and satellite boxes that can access the Internet, and printers that can also scan, fax and copy.

The office of the U.S. Trade Representative said the EU’s proposal would not resolve issues in the dispute.

“Providing duty-free treatment to products already covered does not require a new negotiation,” spokeswoman Gretchen Hamel said. “The evidence suggests that the problem rests not with the agreement but with (EU) implementation.”

The duties, which are as high as 14 percent, make U.S. exports less competitive in the EU , according to the Information Technology Industry Council, a trade association. The group’s members include Hewlett-Packard Co., Apple Inc. and Cisco Systems Inc.

Leading manufacturers of flat-panel computer displays include Dell Inc. and Hewlett-Packard.

Washington says the EU’s duties violate the 12-year-old WTO agreement, which it claims was also intended to cover future products. But the EU contends that it can change duties on the goods because they are technologies developed since the deal was signed.

The EU delayed a formal WTO investigation into its tariffs last month, but cannot under the rules do so a second time. An investigative panel is expected to be established later this month.

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