EU and US clash over tariffs on hi-tech goods

The EU and US remain locked in a battle over the application of a decade-old trade agreement excluding certain IT goods from tariffs.

The Information Technology Agreement is an opt-in, zero-tariff regime which was adopted in 1996. It has 70 signatories representing 97% of the IT sector.

The agreement was originally intended to apply only to hi-tech business products. In recent years, however, the US has lobbied to include increasingly sophisticated consumer goods such as cameras in the scope of the agreement.

The EU has so far resisted US pressure formally to consider consumer goods as exempt from tariffs. But, it has claimed, member states often waive duties voluntarily.

EU efforts to launch multilateral discussions on the scope of the agreement have been rebuffed by Washington, which has hinted at legal action through the World Trade Organization dispute settlement system.

"In any event the ITA is not a bilateral EU-US agreement and a change in ITA criteria can only be made on the basis of the consensus of all ITA participants," said a European Commission official.

A recently mooted EU-US plan to resolve all outstanding trade issues in a special round of bilateral negotiations would not address the ITA dispute. Details of the plan emerged in press reports following the first meeting of the Transatlantic Economic Council last week (9 November).

"The EU has no intention of under-mining the product coverage agreed in 1996 by ITA members through unilateral and unreciprocated concessions," said the official.

The EU and US remain locked in a battle over the application of a decade-old trade agreement excluding certain IT goods from tariffs.