U.S. calls for panel to probe EU high-tech tariffs

Trade representative says EU is charging duties on equipment that should be tariff-free under a 1997 agreement

By Jim Carbone -- Purchasing, 8/19/2008 12:58:00 PM

A U.S. trade representative has requested that the World Trade Organization (WTO) establish a dispute settlement panel to review whether the European Union (EU) has failed to provide duty-free treatment for high-technology products.

The EU in the past several years has adopted a series of measures that resulted in new duties on imports some set top boxes, flat-panel computer monitors, and multifunction printers. These products were included in the Information Technology Agreement (ITA) in 1997, an agreement among a subset of WTO members, including the United States and the EU. The agreement commits the countries to accord the products duty-free treatment on a most-favored nation basis.

However, the EU claims it can now charge duties on these products simply because they incorporate technologies or features that did not exist when the ITA was concluded. 

“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,” says U.S. Trade Representative Susan C. Schwab

The Semiconductor Industry Association supports the trade representative ambassador’s call for a panel to handle the disputes. “It is unfortunate that a dispute settlement panel had to be requested in this case,” says SIA President George Scalise. “The facts clearly indicate that the EU is inappropriately limiting duty-free treatment for high-tech products covered by ITA.”

The tariffs put foreign suppliers, including U.S. chipmakers at a competitive disadvantage while raising prices for consumers, says Scalise.

U.S. chipmakers account for about 50% of worldwide chip sales. “The majority of our manufacturing capacity is here, while 75% of our customers are outside the U.S.,” says Scalise.

Japan and Chinese Taipei have joined the United States in requesting the establishment of a dispute settlement panel.