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Taiwan mulls bringing EU tariff case to WTO

Taiwan is considering requesting the WTO investigate and rule on an EU tariff on imported liquid-crystal-displays (LCDs) that Taiwan alleges is in contravention of the Information Technology Agreement (ITA), a high-ranking trade official said yesterday.

The EU has imposed a 14 percent import duty on LCDs of more than 19 inches, claiming that they are electric appliances. The US and Taiwan, on the other hand, insist that the LCDs are IT products covered by the ITA and should therefore enjoy “duty free” status.

US Trade Representative Susan Schwab has threatened publicly to bring the case to the WTO and the US also hopes that Taiwan, the world’s No. 1 LCD producer, will join the legal battle against the EU.

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

John Deng, chief representative of the Office of Trade Negotiations under the Ministry of Economic Affairs (MOEA), confirmed yesterday that Taiwan is conducting what he called “thorough and comprehensive evaluation” of the case.

The office does not rule out the possibility of triggering the trade dispute settlement mechanism of the WTO.

But the top trade negotiator stressed that they would be “careful” in the decision-making process, since the case could very well 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 NT$19.6 billion in import duty from Taiwanese LCD exports, valued at NT$140 billion.

Deng also noted that LCDs are one of Taiwan’s most import 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 therefore for ensuring that trade flows smoothly. But 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 three months should the ruling be appealed. Such cases can drag on for years without any final settlement.

Chen Chern-chyi, a negotiator in legal affairs and rules, praised the team, saying that the prosecutors have adapted to a lonelier job without the media spotlight — something they were used to as criminal prosecutors.
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