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United States Requests WTO Panel in Challenge to EU High-Technology Tariffs

August 17, 2008


WASHINGTON – United States Trade Representative Susan C.
Schwab announced today that the United States, together with Japan and Chinese Taipei,
requested the World Trade Organization (WTO) to establish a dispute settlement
panel to review whether the European Union (EU) has failed to accord duty-free
treatment to certain products covered by the WTO Information Technology
Agreement (ITA) and thus entitled to such treatment. 

“We regret that formal consultations have not been successful
in resolving our concerns over the duties that the EU is imposing on several
high-tech products,” said Ambassador Schwab.  “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.”

Requesting a panel is the next step in the formal WTO dispute
settlement process.  The
States requested WTO consultations with the EU
on May 28, and consultations were held in late June and mid July.  As consultations have failed to resolve
the dispute, the United
States is requesting that a dispute settlement
panel be established to determine whether the EU is acting consistently with its
WTO obligations

Japan and Chinese Taipei
also requested
consultations with the EU on May 28 and June 12, respectively, and have joined
the United
States in requesting the establishment of a
dispute settlement panel.


The EU in the past several years has adopted a series of
measures that resulted in new duties on imports of specific high-tech products –
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.

These products were included in the ITA – an agreement among
a subset of WTO Members, including the United States and the EU, that commits
them to accord duty-free treatment, on a non-discriminatory (i.e., Most Favored
Nation) basis to imports of information technology products .  They are used by millions of people
every day and are produced by both developed and developing countries.  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. 

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 will consider the joint
request of the United States,
Japan, and Chinese Taipei
for the establishment of a
panel at its next meeting, on August 29. 

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