Schwab requests WTO settlement with EU over tech product duties

Schwab requests WTO settlement with EU over tech product duties U.S. Trade Representative Susan C. Schwab said Friday that the United States has requested WTO dispute settlement consultations with the European Union regarding the duties they are imposing on certain products that should be duty-free under the WTO Information Technology Agreement.
   'It is critical that the European Union live up to its ITA obligations instead of imposing new taxes and duties on innovative technologies,' Schwab said in a statement. 'The EU should be working with the United States to promote new technologies, not finding protectionist gimmicks to apply new duties to these products. Therefore, we urge the EU to eliminate permanently the new duties and to cease manipulating tariffs to discourage technological innovation.'
   Schwab said her office had been working to resolve the situation for the last 20 months, but that going to the WTO appeared to be the United States' only avenue for fair treatment.
   'We are not the only country concerned about Europe's actions,' Schwab said. 'Japan has also announced that it is requesting WTO consultations with the EU regarding this matter. We have heard from several other WTO members expressing similar concerns. The products that are included in the ITA and that are the targets of EU tariffs in question are cable or satellite boxes capable of accessing the internet, flat panel displays for computers, and certain computer printers that can also scan, copy and/or fax. Global exports of these products today are now estimated at approximately $70 billion.'
   Schwab said the three categories chosen were done so because they were products most 'egregiously' reclassified by the EU.
   'The European Union claims that this equipment has evolved beyond the technologies subject to the ITA,' she said. 'However, if ITA participants only provided duty-free treatment to the products with technologies that existed at the time the ITA was concluded, very few ITA products would be eligible for duty-free treatment today. That was not what ITA participants intended when this landmark agreement, this landmark sectoral agreement was reached more than ten years ago.'
   In response to a reporter's question about why the United States and the EU shouldn't just renegotiate the terms of the ITA, Schwab said that wasn't why the original agreement was drafted.
   'The key is, when this was negotiated, when the ITA was negotiated over 10 years ago it was with the recognition that technological advances would be a part of the equation,' she said. 'And it is hard to imagine negotiating such an agreement if you thought that technological change would evolve or enable reclassification of products outside the ITA.'