Commission stands firm on IT talks

Date: 24/09/1998

By Peter Chapman

THE European Commission is promising to stand firm on consumer electronics tariffs as the World Trade Organisation considers whether to relaunch talks on information technology equipment.

Negotiations on a new agreement broke down in July after the EU and other countries blocked attempts, led by Malaysia, to include consumer electronics in the scope of tariff cuts.

WTO sources said Martin Harvey, the New Zealander chairing the negotiating committee, would decide next week whether to resume talks in an attempt to broker a deal acceptable to all sides after holding informal meetings with trade diplomats.

"There is a core group of countries that are very interested in going on, building on the preliminary results of the Information Technology Agreement (ITA). But there are others that fear that the economic crisis means they should reconsider their participation," said one WTO official.

He added that it was still unclear to what extent countries such as Malaysia would hold out for a deal including consumer electronics.

An EU trade source said the Commission would not accept a package which included mainstream consumer products such as TVs and video recorders. "These talks are about IT equipment. We are not interested in moving in that direction," he said. "We are looking for Malaysia to relax its demands. The problems come with the packages. If you do not have any consumer electronics, then Malaysia would block it."

He said the EU "might" accept a less ambitious deal which included "borderline products" to take the ITA forward, but stressed this would have to include cuts in tariffs on IT equipment.

The first ITA deal, signed by 39 countries and trade blocs including the EU in 1997, proposed phasing out customs duties on a wide range of IT products by the year 2000.