Wed, Sep 17, 2008 page11

• Taiwan refuses to drop WTO case against EU

  ALREADY COVERED The EU offered to expand its list of products exempt from customs duties, but Taiwan said the products should already have been covered

  • STAFF WRITER, WITH CNA
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  Taiwan said yesterday it will not drop litigation against the EU over the EU’s alleged violation of the Information Technology Agreement (ITA) by imposing duties on high-tech exports from the nation that should be duty-free.

  The decision, announced by a senior official of Taiwan’s Office of Trade Negotiations (OTN), came despite the EU’s proposal on Monday to expand the list of IT products exempt from customs duties.

  “The EU’s new initiative will not influence our position to solve the case through the trade dispute settlement mechanism under the World Trade Organization [WTO],” said the official, who spoke to CNA on condition of anonymity.

  The litigation came about after consultations with the EU failed to resolve differences. Taiwan, together with the US and Japan, decided to take the last resort by asking the WTO to establish a dispute settlement panel to review and rule whether the EU has failed to accord duty-free treatment to certain products covered by the ITA.

  The Office of the US Trade Representative said the EU has adopted a series of measures that resulted in a new duty on imports of specific high-tech products — cable boxes that can access the Internet, flat-panel computer monitors and certain computer printers that can also scan, fax and copy.

  The high-profile trade dispute, a precedent-setting case for the implementation of the ITA, is of special significance to major high-tech goods exporters in Taiwan because of the trade interests involved.

  Global exports of these products are estimated at more than US$70 billion last year.

  The EU’s alleged violation of the ITA, a trade agreement among 71 WTO members, has seriously damaged exports of Taiwanese IT products, with liquid-crystal displays (LCDs) particularly hard hit.

  Official tallies showed that the EU has collected as much as NT$19.6 billion (US$650 million) in import duties on Taiwanese LCDs.

  The EU had proposed to “update and expand the ITA” by adding new products that have entered the market since the agreement was originally concluded in 1996.

  It had contended that a change in ITA criteria could only be made on the basis of “consensus amongst all ITA participants … and not as a result of litigation by some members,” its submission to the WTO said.

  EU Trade Commissioner Peter Mandelson said the EU proposal could lead to an expansion of the ITA to goods including the three digital products at the center of the initial case.

  Taiwan’s OTN official countered that the ongoing trade dispute and the EU proposal are “two separate matters.”

  He said the three products in question were covered under the ITA and should already be exempt from import duty, a position accepted by a majority of ITA members.

  Taiwan urged the EU to take immediate action to eliminate duty on the three IT products, rather than taking it as a “future obligation.”

  The US trade office also said expanding the ITA to cover new goods was a separate issue.

  “Providing duty-free treatment to products already covered does not require a new negotiation,” said Trade Representative spokeswoman Gretchen Hamel in Washington on Monday.
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