Lawmakers and technology business groups are breathing a sigh of relief after the Office of the U.S. Trade Representative announced today that it has filed a formal challenge with the World Trade Organization to tariffs being imposed by the European Union on products such as cable and satellite boxes and flat-panel computer monitors.
“The WTO case brought by USTR is a critical step to ensure continued global economic growth through widespread use of IT in business and government and by consumers,” said Robert Atkinson, president of the Information Technology and Innovation Foundation. “It is about time that we called the EU for their protectionist gamesmanship,” added former Assistant Secretary of Commerce for Technology Policy Bruce Mehlman.
U.S. industry representatives would like to get more products covered under the Information Technology Agreement of 1996, which requires participants to completely eliminate duties on certain information technology products.
“EU actions make it impossible now to seriously look at expanding product coverage under the ITA given that the EU hasn’t been implementing the current ITA properly,” said John Neuffer, vice president of technology and trade at the Information Technology Industry Council. There is a different negotiation going on in the World Trade Organization's Doha round of trade talks that is seeking to reduce tariffs for high-tech products, he said.
The USTR said Wednesday that Japan also has requested WTO consultations over EU tariffs.
Longtime ITA proponent Rep. Joseph Crowley, D-N.Y., who sits on the House Ways and Means Committee, said “I am pleased that the USTR is finally taking the right step to enforce the Information Technology Agreement, as Congress has been calling on the administration to act more than a year." “It is my hope," he added, "that the EU will respond to the USTR’s announcement by dropping their arbitrary tariffs against U.S. goods and upholding the ITA.”
Ways and Means Committee Chairman Charles Rangel, D-N.Y., and the panel's Trade Subcommittee Chairman Sander Levin, D-Mich., also welcomed the announcement. “Legislation is needed to ensure a more assertive approach to the enforcement of our international agreements and trade laws," they said in a joint statement. "The Committee will consider enforcement legislation in the coming months."
A spokesman for the European Commission said it strongly rejects U.S. claims that the EU is not fulfilling its obligations under the agreement. The EU called the U.S. accusations “unfounded.”
“Not only has the EU respected its ITA obligations, but it has explicitly said it is willing to reassess the current ITA product coverage to reflect new technology in a negotiation with all ITA signatories. However, the U.S. refuses to do this,” the spokesman said.
U.S. industry groups such as the Electronic Industries Alliance, the Information Technology Association of America, the Information Technology Industry Council and the Computing Technology Industry Association have all expressed concern over the future of the agreement.