Acer Inc (宏碁) yesterday said the WTO’s ruling in favor of Taiwan regarding its dispute with the EU would greatly increase the nation’s competitiveness in Europe’s LCD monitor market.
“This will put us on equal footing to compete with our South Korean rivals in the market,” said Arthur Pai (白忠良), assistant vice president of Acer’s digital display unit.
South Korean manufacturers, Samsung Electronics Co and LG Electronics Inc, and Acer are currently the top three LCD monitor brands in Europe.
However, South Korea has signed a free-trade agreement with the EU, allowing their products, including LCD monitors, be exported to Europe without tariffs.
LCD monitors produced in Taiwan are subject to a 14 percent tariff, putting Taiwanese firms at a disadvantage since their monitors have to be sold at a higher cost.
Companies can opt to evade the tariffs, but have to exclude high-end features, such as digital video interface (DVI) and high-definition multimedia interface (HDMI) ports, Pai said.
Acer sold 6 million LCD monitors in Europe last year, accounting for 35.3 percent of its total shipment of 17 million, he added.
The WTO’s Dispute Settlement Body ruled in favor of Taiwan in its final report, which was due to be released at 11pm last night.
In 2007, Taiwan, the US and Japan launched a joint suit against the EU regarding tariffs imposed on monitors, set-top boxes and multi-function printers.
Taiwan has charged that the EU has broken the WTO’s Information Technology Agreement (ITA), which gives tariff-exemption status to monitor imports.
The EU has maintained that monitors that are 19 inches or larger with DVI and HDMI terminals are counted as TV products, and thus are not applicable under the ITA.
Tseng Wen-jung (曾文鎔), standing committee director of Taipei Computer Association (台北市電腦公會), also lauded the outcome.
“This is a low profit margin era for Taiwanese tech enterprises,” Tseng said.
“Tech companies now only enjoy around 15 percent margins, and if they have to shoulder the 14 percent tax, it would impact the industry’s competitiveness on the global stage,” Tseng added.
He said the ruling would encourage Taiwanese firms to consider producing more tech products at home instead of moving facilities offshore to evade the tarrif.
Vice Minister of Economic Affairs Francis Liang (梁國新) said the settlement was a great learning step for the government in terms of handling international disputes.
The ministry said Taiwanese companies paid NT$19.6 billion (US$609 million) in taxes in 2007 as a result for the EU’s tariffs. Last year they paid NT$5.2 billion.
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