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EU Says WTO's Ruling on High-Tech Goods May Cost Bloc $386 Million a Year
A World Trade Organization ruling that the European Union violated global trade law by applying import duties on high-tech electronic goods may cost the bloc as much as 300 million euros ($386 million) in revenue a year.
“This is a very rough and highly hypothetical estimate, based on import calculations from previous years, that if we didn’t appeal, the future loss revenue would amount to 300 million euros annually,” European Commission spokesman Patrizio Fiorilli said today at a news conference in Brussels. The EU has 60 days to appeal yesterday’s ruling.
The WTO decision followed a complaint by the U.S., Japan and Taiwan saying the EU is circumventing a trade accord called the Information Technology Agreement that was signed by 72 countries and scraps import tariffs on electronic products. WTO judges agreed and called on the EU to drop the levies.
The case against the EU involves three products -- cable converter boxes, multifunction printers and flat-panel computer displays -- all developed after 1996, when the ITA came into force. Trade in ITA products produced by companies including Hewlett-Packard Co., Samsung Electronics Co. and Canon Inc. more than tripled to $4 trillion in 2008 from $1.2 trillion in 1996, according to the Information Technology Industry Council.
The EU imposed duties ranging from 6 percent to 14 percent on the products, the bloc’s imports of which amounted to $11 billion in 2007.
Call to Renegotiate
The EU proposed expanding the list of electronic goods exempt from customs duties in September 2008. The 27-nation bloc never committed to adding the three products that are at the heart of the WTO complaint to the ITA, saying only that it wanted to give priority to multifunctional goods, and that its call to reopen talks on the accord was never approved.
“The list of items under this agreement has never been updated,” Fiorilli said. “This is where the problem lies now. The EU has consistently asked for this to be updated via negotiations.”
The ITA saves makers of technology products such as Chimei Innolux Corp. and AU Optronics Corp. of Taiwan and LG Display Co. of South Korea $5 billion a year, according to the Consumer Electronics Association, a U.S. industry group. Last month, officials in Taiwan said a WTO ruling backing the complaint would save its exporters of flat screens as much $611 million a year in duties.
To contact the reporters on this story: Jennifer M. Freedman in Geneva at o jfreedman@bloomberg.net; Ewa Krukowska in Brussels at ekrukowska@bloomberg.net
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