U.S. Files WTO Case Against the European Union

The United States Trade Representative Susan C. Schwab announced Wednesday that the U.S. has filed a request for World Trade Organization dispute settlement consultations with the European Union regarding tariffs the EU has imposed on certain technology products that should be duty-free under the WTO Information Technology Agreement (ITA). The ITA is a plurilateral agreement negotiated in 1996 that abolished import tariffs on a variety of information technology products.

Over the past few years, however, the EU has imposed duties on certain high-tech products—including cable and satellite boxes, flat panel computer monitors, and certain printers that also scan, fax and/or copy—the exports of which were estimated at over $70 billion in 2007. In spite of the fact that these products were included in the ITA, and are used worldwide, the EU claims that it is allowed to impose import tariffs on these products merely because they include new technologies or features.

“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. ‘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.”

Robert D. Atkinson echoed these sentiments in his article in The Globalist, labeling such practices—also utilized by nations outside the EU—“mercantilist,” aimed specifically at disadvantaging and reducing the global competitiveness of foreign companies. To retain its advantage, he says, the U.S. must enhance its innovation policies, for example by increasing R&D tax credits and bolstering federal research activities. Japan, another exporter of such IT products, has also filed a complaint with the WTO against the European Union on the same matter. For more information about this case, check out the USTR fact sheet.