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What Brussels means by free trade

Wednesday, 20th August 2008

The protectionist trading policies of the EU are set to cause further dispute round the world as the United States, Japan and Taiwan insist that the World Trade Organisation take action against Brussels for its eccentric interpretation of agreements on the sale of technology products.

Keen to stifle competition, the EU slaps punitive tariffs on $11 billion of imported electronic equipment by claiming that some new products fall outside the scope of the agreements.

According to Brussels, for instance, a computer monitor with a flat screen that can show videos is not a monitor but “a television”. That means means the boys in Brussels can gleefully slap a 14% duty on it.

And when is a printer not a printer? When it can also send faxes, according to the excuse-seekers in Europe. That means it is a copier, they say, so they stick a tariff of 6% on it.

In Brussels-speak, a cable converter box turns into something else if it happens to supply Internet access, so there is another 14% duty that can be imposed.

These aren’t high-tech goods, says the EU, they are consumer products. So?

Brussels is merely taking the opportunity to jack up prices on innovative technologies that are useful to millions of businesses and consumers, says the US  Trade Representative Susan Schwab.

Of course the EU has rejected the complaint, which was first lodged in May and says it is willing to renegotiate the technology products agreement. Of course, nothing has happened. And don’t expect developments soon. Although the US and its fellow protesters have demanded that the WTO considers their case at its meeting this month, it is not a body known for swift action. It could take a year for a ruling to be made.

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