Congress Daily AM: Firms Complain That Tech Advances Outpace Trade Policy

Congress Daily/AM
Firms Complain That Tech Advances Outpace Trade Policy
July 31, 2007
by Martin Vaughan

Tech companies have asked Trade Representative Schwab to intensify pressure on the European Union to remove tariffs on technology products, suggesting that bringing a case at the World Trade Organization might be necessary. 

The dispute revolves around products that U.S. trade officials argue qualify for duty-free treatment under the 1997 WTO Information Technology Agreement, but which include features that did not exist or were not prevalent when that agreement took effect.

For example, the United States, European Union and other signatories to the ITA pledged duty-free treatment for computer monitors, but now the EU imposes 14 percent tariffs on
flat-screen monitors that exceed 19 inches.  The EU regards these as televisions, which are not covered by
the ITA, industry officials said.
 
"Despite all efforts to find a resolution, the European Commission continues to remove products from ITA coverage, violating both the letter and spirit of the original agreement.  We support USTR action, by all means necessary, to ensure that WTO commitments are upheld," wrote Rhett Dawson, president of the Information Technology Industry Council, in a letter last week to Schwab.

ITI includes such companies as Apple, Dell, Epson and Sony. 

The firms have also drawn the attention of House lawmakers to their plight.

Rep. Joseph Crowley, D-N.Y., is circulating a bipartisan letter that will ask the administration to redouble its efforts to resolve the dispute. 

Other products subject to E.U. tariffs include all-in-one printers, set-top boxes and potentially digital cameras that also record video clips. 

Digital still cameras are listed as covered by the ITA, but not camcorders.

The European Union has implemented temporary duty suspensions on some products, but those suspensions must be periodically renewed and "create uncertainty in the marketplace," according
to the ITI letter.
 
A U.S. trade official said the duty suspensions are inadequate, and that Brussels in recent months has hardened its position that the products in question are not covered by the ITA. "So far, they haven't produced an offer we can accept," the official said.
   
The Bush administration has made no decision on whether to request formal consultations in the WTO, but will continue to press the European Union through the ITA committee in Geneva, the official said.

Since the products are made in many parts of the world, often using technologies developed in the United States, other countries have also objected to the E.U. practice in Geneva discussions, the official said.
   
E.U. spokesmen in Washington and Brussels had no comment at
presstime.  
By Martin Vaughan
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