A US government official played down reports that the US is considering taking the European Union to the World Trade Organisation (WTO) over the imposition of new duties on high-tech imports such as flat-screen monitors and digital set-top boxes.
“The US has expressed its concern about the EU proposal to apply duties to sophisticated products covered by the Information Technology Agreement (ITA),” the official, based at the US embassy in Brussels, said in a telephone interview on Friday.
He said taking the issue to the WTO, the world’s trade arbitrator based in Geneva, was still a possibility. “Our options are open,” he said, but added that many concerns about trade matters do not end up as WTO cases.
The ITA was signed by most countries producing IT products in 1997. It sets tariffs on goods designed for businesses at zero in order to help spur economic growth.
However, as the price of items such as flat-screen monitors has fallen in recent years, they are increasingly being bought by consumers. The EU has started to reclassify some equipment as consumer goods, which require import tariffs of around 10%.
Applying a tariff to new types of goods could potentially lead to higher prices, unless the vendor or manufacturer shoulders the additional cost.
The European Commission, the EU’s representative body on trade matters, defended its actions. The EU classifies products on the basis of "objective criteria," Peter Power, the Commission’s trade spokesman in a statement. "US claims of EU re-classifying products in violation of ITA commitments are unfounded,” he said, adding that the EU "respects the spirit of the ITA" when classifying new technologies.
The EU drew sharp criticism from the US this week over its decision to dismiss Microsoft's appeal of the European Commission's 2004 antitrust ruling against it.
A US government official, who did not wish to be identified, denied today that the US concerns over tariffs are a reaction to that decision.
“This is a long-standing issue for the US government. We’ve been making these comments about the ITA since 2006,” the official said.