US seeks WTO panel in hi-tech row with EU

But the EU rejected US assertions that it was violating the terms of a 1996 WTO accord aimed at limiting barriers to hi-tech trade, suggesting it would fight the case stoutly. Washington’s move marks an escalation in an increasingly rancorous dispute over the WTO’s Information Technology Agreement (ITA) which eliminated duties on a range of high-tech goods from July 1997 to encourage trade.

Since 2005 the EU has re-imposed duties on new versions of computer screens, multi-function printers and TV set-top boxes that can access the Internet, arguing they are now consumer products rather than pure high-tech goods. In Brussels, a spokesman for Trade Commissioner Peter Mandelson said the United States was seeking to change the ITA through litigation while refusing EU suggestions that it agree to review the pact’s coverage with all its signatories.

Changing the accord “is not something we can negotiate bilaterally with the United States,” he declared. Japan and Taiwan joined the US request for a panel. The request will be put to the next meeting of the WTO’s dispute settlement body on August 29, when under WTO rules the European Union will be able to object, although it cannot block a panel at the second request. 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.

The US statement said the EU was charging duties on the products because they incorporated technologies that did not exist at the launch of the ITA, which now has 71 signatories. 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 US statement said. (Reuters)