Taiwan won a trade dispute against the EU at the WTO last month that may save the country’s LCD manufacturers more than NT$19.6 billion (US$611.54 million) annually.
Economic officials said that a panel under the Dispute Settlement Body of the Geneva-based WTO said in its intermediary report on June 11 that the EU should not impose tariffs on imports of LCDs or other information technology products.
It was the first trade complaint Taiwan has filed with the WTO for settlement since it was admitted to the body in 2002.
Taiwanese authorities sent comments on the report to the WTO on Friday last week, and are waiting for the final report, which is expected to be issued on July 23 and will take effect before Dec. 25 unless the EU appeals against it.
If that happens, the officials said, the dispute will have to be resolved before March next year.
Taiwanese economics officials initiated the trade dispute settlement process in June 2008 when they requested consultations with the EU following complaints from Taiwanese LCD manufacturers.
The manufacturers said the EU had violated its obligations under the 1994 WTO Information Technology Agreement by imposing a 14 percent tariff on imports of LCD panels that are larger than 19 inches and equipped with high definition interface (HDI) and digital video interface (DVI) terminals.
They said the panels should be considered information technology products that enjoy duty-free trade under the above agreement.
EU officials, however, defined them as a consumer products because they can be used with DVD players, home-use projectors, video cameras and video game players.
After three fruitless consultations with the EU, Taiwan asked for the establishment of a panel to settle the dispute on Aug. 18, 2008, along with the US, which complained about the EU’s 13.9 percent tariff on its television set-top boxes, and Japan, which complained about the EU’s 6 percent tariff on its multi-functional products.
Because of the complexity of the matter and the fact that the proceedings involved three complainants, the panel could not complete its work within the stipulated six months from the date of its Sept. 23, 2008, formation, economics officials said.
During the dispute-solving process, however, the EU has stopped levying duties not only on products covered in the case, but also on other controversial Taiwanese products, such as cellphones that could be used as TV sets and global positioning system devices.
Saying that Taiwan exported NT$140 billion in LCD panels involved in the dispute, economics officials estimated that the WTO decision would save local manufacturers NT$19.6 billion in tariffs and greatly boost their competitiveness.
This is especially important because European consumers’ purchasing power has been seriously dented by the recent depreciation of the euro, analysts said.
Taiwan churned out NT$1.34 trillion in LCDs last year, representing a 17 percent plunge from the previous year. The industry is expected to expand by 8.2 percent this year to NT$1.45 trillion, according to statistics compiled by the Industrial Technology Research Institute in Hsinchu.
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