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By | Kelly Fiveash 15th September 2008 12:08

EU wants to add another notch to ITA belt

Appeasing American, Japanese middle spread

The European Union will today call on members of the World Trade Organisation (WTO) to consider its proposal to update and expand the Information Technology Agreement (ITA) which governs tech-related trade.

The European Commission - the executive arm of the EU - wants a prompt response to its plans to update the ITA, which was negotiated and inked in 1996. It was conceived to expedite trade in IT and telecommunication products by eliminating tariffs on an agreed range of products.

The EU has put forward its proposal to expand the list of such equipment exempt from customs duties, and is meanwhile locked in a trade dispute with some ITA members. The Commission faces a complaint from the US, Japan and Taiwan over tariffs on some imported IT goods.

EU Trade Commissioner Peter Mandelson said: “The ITA remains a milestone duty-free agreement. But it risks being left behind after 12 years of technological development. We need an ITA for the 21st century that will continue to benefit our customers and businesses."

The Commission also hit out at its critics, who were failing to agree that “a change in ITA criteria can only be made on the basis of consensus amongst all ITA participants … and not as a result of litigation by some members”. It’s probably also hoping that a swift resolution will pre-empt any costly legal action from the three countries.

In May this year US and Japan officials lodged their complaint against the EU with the WTO, claiming that the 27-member state bloc was undermining the ITA by hiking duties on some TV set-top boxes, flat screens and printers able to scan, fax and copy.

Those are items that in the past decade have moved from being classified as IT kit into common consumer goods. The EU had argued that tariffs could be raised on those products because they are no longer purely for businesses.

IT products now account for over $1.5 trillion of exports worldwide, which is one fifth of total world exports of manufactured products, up from $600bn in 1996. ®

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