Taiwan mulls joining US to bring EU tariff case to WTO

Business Materials 28 April 2008 03:20 (UTC +04:00)

Taiwan is considering asking the World Trade Organization (WTO) to probe and rule on a European Union tariff on imported liquid-crystal-displays (LCDs) that Taipei says violates the Information Technology Agreement (ITA), the dpa reported.

The daily Taipei Times said that the EU has imposed a 14-per-cent import duty on LCDs of more than 19 inches, claiming they are electric appliances. The US and Taiwan, on the other hand, insist the LCDs are information technology (IT) products covered by the ITA and should enjoy duty-free status.

US trade representative Susan Schwab has threatened to bring the case to the WTO, and the US hopes that Taiwan, the world's number-one LCD producer, will join the legal battle against the EU, the Taipei Times said.

Taiwan's LCD trade association also filed a complaint with the government that their members' exports are unjustly levied by the EU and asked for assistance.

John Deng, the Taiwan Economics Ministry's chief trade negotiator, confirmed that Taipei is conducting a "thorough and comprehensive evaluation" of the case, the Taipei Times said.

The ministry does not rule out asking the WTO to use its trade- dispute settlement mechanism to resolve the dispute.

Deng stressed that they would be careful in the decision-making process, because the case could become Taiwan's first trade litigation in the WTO and involves huge commercial and trade interests.

Official tallies show the EU collected as much as 19.6 billion Taiwan dollars (612.5 million US dollars) in import duty from Taiwanese LCD exports, valued at 140 billion Taiwan dollars (4.4 million US dollars).

Deng noted that LCDs are one of Taiwan's most important IT products and said that "the government bears unavoidable responsibility to use all possible tools to protect our industry and trade interests."

The WTO's trade-dispute settlement procedure, often regarded as "the world court of trade," is vital for enforcing the rules and thereby ensuring that trade flows smoothly. Taiwan has never been a party to any trade dispute, except for participating in other members' litigation as a third party.

"Bringing the case to the WTO is not a goal but a last resort," Deng said, expressing hope that the EU will abide by the ITA to avoid WTO proceedings, which take at least a year for a preliminary ruling and another 3 months should the ruling be appealed. Such cases can drag on for years without any final settlement.