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EU seeks overhaul of high-tech trade deal

By: | at 08:00 PM | Channel(s): International Trade  

The European Union called for an overhaul of a 1996 deal that boosts trade in high-tech goods around the world, despite accusations that the bloc is breaking the original agreement.

The United States, Japan and Taiwan in July sued the EU at the World Trade Organization, saying it was violating the International Technology Agreement (ITA) that eliminated import duties on goods such as computer screens and printers.

The EU’s executive Commission said it would present to the WTO on Monday its plan to update the ITA to add new products, possibly including optical fibers, and encompass more markets beyond its current total of 70 countries or customs areas.

“The ITA remains a milestone duty-free agreement. It risks being left behind after 12 years of technological development,” European Trade Commissioner Peter Mandelson said.

The Commission also said the ITA should tackle red-tape restrictions on technology imports in some countries, such as costly, multiple testing of products for different markets.

The EU angered the United States and Japan in 2005 when it began re-imposing duties on computer screens, multi-function printers and TV set-top boxes, saying they were mainstream consumer products, not pure high-tech goods covered by the ITA.

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.

Mandelson told reporters on Monday the EU was open to eliminating the duties on the three products in question, as long as it was part of a broader negotiation.

“It’s all very well being interested in a limited selection of goods which correspond to your commercial interests,” he said “Let’s look at it in the round and negotiate from the point of view of everyone’s commercial interests.”

A spokeswoman for US Trade Representative Susan Schwab, said Washington had not yet seen the EU’s proposal for reforming the ITA, but including new products would not address US concerns about keeping existing products duty-free.

“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 is unclear why it continues to apply duties to the ITA products that are the subject of the dispute,” spokeswoman Gretchen Hamel said.

A representative of technology multinationals said EU tax officials appeared to have hoped to attract investment into lower-cost eastern European countries by re-imposing the duties.

“My only guess is they believe it is a favor to some new member states but we wish they’d talked to industry first,” said Mark MacGann, director general of the European Information, Communications and Consumer Electronics Technology Industry Association. (Reuters)