The Bush administration on Wednesday hit out at the European Union for imposing taxes on imports of certain electronics in alleged violation of an existing trade agreement.
U.S. Trade Representative Susan Schwab said the United States has filed a formal complaint with the World Trade Organization, which means that U.S. and European officials now have 60 days to consult about the dispute. If they don't reach a resolution at that point, the United States can call for a panel to determine whether the EU is complying with its World Trade Organization obligations under the 1996 Information Technology Agreement (PDF).
The ITA, as it's known, counts 71 signatories, including Japan and China, and dictates that a "wide range" of high-tech products must be imported duty-free, according to the U.S. Trade Representative. But Schwab said EU customs officials now claim they can charge taxes on certain products--namely, certain multifunction printers, cable and satellite set-top boxes, and flat-screen monitors--because they incorporate newer features or technologies than those spelled out in the original agreement.
"The EU should be working with the United States to promote new technologies, not finding protectionist gimmicks to apply new duties to these products," Schwab said in a statement. "Therefore, we urge the EU to eliminate permanently the new duties and to cease manipulating tariffs to discourage technological innovation."
Schwab said the U.S. has been raising its concerns with EU officials for the last 20 months but has failed to see progress. She said Japan also plans to join the formal case.
EU representatives were not immediately available for comment.
American high-tech companies were quick to applaud the USTR announcement. The Information Technology Industry Council, whose members include Apple, Dell, Epson, Hewlett-Packard, and Sony, said it's concerned that European countries are currently posing taxes as high as 14 percent on imports of flat-screen monitors, set-top boxes, and multifunction printers. Approximately $70 billion of those products were exported globally in 2007, according to the USTR.
"The EU is violating the letter and spirit of the ITA, which has been the most successful, pro-innovation and pro-growth agreement of the past decade," said John Neuffer, an ITI vice president. "The EU is taxing innovation by removing products from the ITA's zero-tariff status simply because companies have found ways to improve them for businesses and consumers."