In 1996 the United States and other countries accounting for over 90 percent of world trade in computers, semiconductors, and other information technology products agreed in the World Trade Organization to eliminate their import tariffs on all such products. As a result, the United States became a huge exporter of these products. Now, over 10 years later, the European Union (EU) has decided to start imposing 14 percent import duties on new information technology products in violation of the agreement.
Their rationale is that these new products didn’t exist in 1996 and many of them, such as computer monitors that can receive TV signals could be considered consumer goods. Duh! As NAM President John Engler just told the press, “Integration of electronics into more and more multifunction products is the future of the electronics industry. We need to encourage this product evolution with liberal tariff treatment, not discourage it with protectionism. If the EU is permitted to make its own definitions of what is covered, everyone else will do so too – and pretty soon the Information Technology Agreement will just be history.”
The U.S. Trade Representative said she had enough, and has initiated dispute settlement consultations with the EU in the WTO. (Ambassador Susan Schwab’s news release here, and her statement is here.) Japan has joined as a co-complainant. While we hope that EU will see that it has violated its sworn agreement and will retract, if it does not then we want to see a dispute case adjudicated by the WTO. We play by the rules and we want the EU to do so also. High-tech products such as these are our largest export, and we struck a bargain that the EU and others have to live up to.
Crossposted from The Hill Blog.
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