Tech talks break down between US and Europe

World Trade Organization asked to intervene in dispute over tariffs

19 August 2008 14:54 GMT / By Katie Scott

Things have gotten so nasty between the States and EU over tariffs on tech goods that the US has asked the World Trade Organization to mediate.

The US has asked the WTO to set up a "dispute panel" to help the two sides negotiate after talks failed to come up with a solution.

This ongoing argument is over the WTO's Information Technology Agreement (ITA) which eliminated duties on a range of high-tech goods from July 1997 to encourage trade.

Since 2005, the EU has been adding charges on a range of products, including multi-function printers and TV set-top boxes that can access the Internet, arguing that these products are now consumer products rather than just pure high-tech goods.

The US has accused the EU of violating the terms of a 1996 WTO accord which laid out what constitutes a high-tec product - something which has become highly contentious.

Now the WTO is being asked to set in.

"We regret that formal consultations have not been successful in resolving our concerns over the duties that the EU is imposing on several high-tech products", US Trade Representative Susan Schwab said in a statement from Washington.

"We believe that these duties are inconsistent with the EU's commitments on these products, and that they discourage technological innovation in the IT sector", she said.

Over in Brussels, a spokesman for trade commissioner Peter Mandelson said pointedly that the States was "seeking to change the ITA through litigation".

Changing the accord "is not something we can negotiate bilaterally with the United States", he declared.

Japan and Taiwan have backed the US in its bid to get a WTO panel set up and the request will be put forward on 29 August.