EU Removes Tariff on Computer Displays Following Defeat at WTO Panel, Prepares for ITA II at Bali Ministerial

The European Council has adopted a regulation that will ensure duty-free treatment for imports of flat panel displays, a product that played a key role in a WTO dispute between Brussels and Washington on IT trade.

Five years ago, the US, Japan, and Chinese Taipei each filed complaints at the WTO against EU tariffs on certain high-tech products: specifically, cable or satellite boxes with internet capability; flat panel displays for computers; and computer printers that also have the capacity to scan, copy, or fax.

These products, they argued, were meant to receive duty-free treatment under the Information Technology Agreement, or ITA - a plurilateral pact under the aegis of the WTO that eliminates tariffs on information and communication technology products. Instead, they were being subjected to tariffs as high as 14 percent.

Brussels, for its part, had argued that the ITA does not apply when technological changes have given a product multiple functions, making them consumer goods that no longer fall under the ITA’s scope. A WTO panel ultimately found in favour of the complainants, with the EU deciding not to appeal the findings.

US Trade Representative Michael Froman welcomed the European Council move, noting that eliminating duties on these and other ICT products “was a key achievement of the WTO’s Information Technology Agreement, and a commitment we are determined to see enforced.” Tariffs on the other products named in the dispute have already been lifted.

The EU and US are among a group of ITA signatories that is currently negotiating an expansion of the list of products covered under the pact, given that the existing list has not been updated since the agreement entered into force in 1997. The group is aiming to have a revised list ready in time for the WTO’s ministerial conference in Bali next month.