The saga following the WTO ruling on High-Tech goods rolls on!.
The EU has accepted the ruling that Tariffs levied on certain products were not in keeping with the Information Technology Agreement (ITA) and we have been advised that an EU Regulation clarifying the post-ruling position. However, the EU appears to be adopting the approach that it is time to renegotiate the ITA which it regards as an outdated document.
At a recent meeting of the ITA Committee at the World Trade Organisation, the EU outlined its proposal for reviewing the ITA including looking at product coverage, membership and the incorporation of non-tariff barriers (such as conformity of standards on Electromagnetic interference).
It is unlikely that we will see an end to the impasse any time soon. By the terms of the WTO, members have one calendar year to ensure full compliance with any ruling. On the one hand, the EU is engaging in a “damage limitation” exercise in trying to reduce the purported EUR 300million shortfall in customs duties that will resonate from the ruling.
Our view is that the EU is seeking to bundle a number of issues together to increase the technical and political difficulties in gaining a new agreement. This approach helps the EU to continue its narrow interpretation of the scope of the current measures for longer and collect more revenue.
Whilst there can be little doubt that the original ITA did could not envisage the plethora of technical developments in the future (much in the same way that we cannot predict what will happen in 2026), renegotiating the entire agreement will be cumbersome (bearing in mind that the Doha agenda still has failed to reach any sort of consensus) and also there is likely to be resistance from states who will argue that the EU is trying to buy itself time as well as trying to avoid the full scope of the WTO ruling.
In any case, we are certainly in for an interesting few months ahead.