WASHINGTON, May 28 (Reuters) - The United States said on Wednesday it was taking action at the World Trade Organization aimed at overturning tariffs the European Union imposes on computer screens, multifunction printers and TV set-top boxes capable of accessing the Internet. U.S. technology heavyweights such as Hewlett Packard Co have argued that EU tariffs on the products violate the spirit and the letter of the WTO's 1997 Information Technology Agreement (ITA), which axed tariffs on a range of high-tech goods to boost trade. "The EU should be working with the United States to promote new technologies, not finding protectionist gimmicks to apply new duties to these products," said U.S. Trade Representative Susan Schwab.
"We urge the EU to eliminate permanently the new duties and to cease manipulating tariffs to discourage technological innovation," Schwab said at a news conference to announce the United States had requested formal dispute settlement talks with the European Union on the issue. Japan is joining the dispute on the side of the United States, Schwab said. As the three products have evolved, EU customs officials have decided they are no longer covered by the pact and hit them with tariffs of up to 14 percent. Global exports of the three products are estimated to be worth more than $70 billion, Schwab's office said. The European Commission said it "strongly rejected" the arguments of the United States and accused Washington of refusing to heed its calls for negotiated changes in the products covered by the ITA deal.
"The ITA has a review clause which can be invoked by members at any time. The EU has said it is willing to negotiate with all other ITA members. The U.S. is not willing to do this. Why not?" the Commission said in a statement. Schwab told reporters the EU position would render the Information Technology Agreement meaningless over time because it would cover fewer and fewer products.
"If ITA participants only provided duty-free treatment to products with the technology that existed at the time the ITA was concluded, very few ITA products would be eligible for duty-free treatment today," she said. "That is not what ITA participants intended when this landmark sectoral agreement was reached more than 10 years ago," Schwab said, adding the United States did not want to "pay twice" for trade concessions it believes the EU is already obligated to honor. Most of the products at issue are manufactured in countries such as China and Malaysia but are based on U.S. design and engineering and sold under U.S. brand names.