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US, Japan, Taiwan take EU to WTO

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August 19, 2008

Hi-tech import duties:
US, Japan, Taiwan take EU to WTO
China, Singapore, Thailand and the Philippines asked to join

The United States, Japan and Taiwan have asked the WTO to settle their dispute against the European Union over its duties on certain high-technology imports, AFP quoted the US Trade Representative Susan Schwab as saying on Monday.

The US and the two Asian countries claim that EU is violating World Trade Organisation rules by imposing duties on imports of certain products such as "cable boxes that can access the Internet, flat-panel computer monitors, and certain computer printers that can also scan, fax and/or copy."

Global exports of these products were estimated at over $70 billion in 2007, the USTR office said.

A WTO Information Technology Agreement (ITA) signed in 1996 prohibits duties on certain high-technology products.

"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," Schwab said.

"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," she said.

"In effect, the EU is taxing innovation - a move that could impair continued technological development in the information technology industry and raise prices for millions of businesses and consumers."

The WTO dispute settlement body is to consider the joint request at its next meeting, on August 29, according to the USTR office.

In Brussels, a spokesman for Trade Commissioner Peter Mandelson said the United States was seeking to change the ITA through litigation while refusing EU suggestions that it agree to review the pact's coverage with all its signatories, reported Reuters.

Changing the accord "is not something we can negotiate bilaterally with the United States," he declared.

Washington estimates that global exports of the products under dispute, which are made by companies like Hewlett-Packard Co of the United States or Canon Inc and Ricoh Co Ltd of Japan, total more than $70 billion.

The US statement said the EU was charging duties on the products because they incorporated technologies that did not exist at the launch of the ITA, which now has 71 signatories.

"In effect the EU is taxing innovation -- a move that could impair continued technological development in the information technology industry and raise prices for millions of businesses and consumers," the US statement said.

US officials say the EU imports $11 billion of the three products each year. The US goods are mainly manufactured in countries such as China and Malaysia but based on U.S. designs and engineering and sold under US brand names.

China, Singapore, Thailand and the Philippines, which all have important electronics manufacturing sectors, also asked to join the consultations that the US requested on May 28 and are likely to join the dispute panel as third parties.

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