12:33 PM May 22, 1996

US COMPLAINS OVER EC RECLASSIFICATION OF TARIFFS

Geneva 22 May (Chakravarthi Raghavan) -- The United States complained at the WTO's Council on Trade in Goods about the European Community's action in reclassifying the EC's Uruguay Round bound tariff schedules, and putting some high-technology imports into a higher tariff category.

The US complaint related, in the field of computers, to Local Ara Network (LAN) equipments and personal computers with television capability.

As a result of these actions, which are contrary to the EC's obligations under Art. II:1 of the General Agreement (bound tariff schedules), the duty rate on imports had been increased to 14% rather than the 3.5% in the schedule, the US Ambassador to the WTO, Mr. Booth Gardner complained.

The trade involved according to the US amounted to hundreds of millions of dollars a year and is growing.

While the US speech at the Goods Council reportedly did not specifically name any of the EU member-states, in a paper to the WTO, the US has mentioned higher duties applied in Ireland on LAN equipment and higher duties in the UK on PCs with television capabilities. The US disclosed it has sought consultations with the EU (presumably outside the framework of the WTO's dispute settlement mechanism) on 2 May.

The EC took note of the US statement but was surprised it had been put on the agenda (by the US) when it had agreed to hold technical consultations with the US to get more details over its grievance.

It is not EC policy, EC representative Ian Wilkinson said, to reclassify products "merely to raise tariffs or to seek protection". No US rights arising from EC's Uruguay Round schedule EC had been impaired, he said.

Japan, which had raised a similar complaint before (about tariff classification of CDRoms), underlined that this was not the first time that such a complaint over the EC's schedules had come up before the Goods Council. Japan was seriously concerned if the technical consultations and examination showed tariffs had been increased.

Korea shared US concerns and wanted the matter to be resolved as quickly as possible, since the reclassification created a dangerous precedent. Switzerland said it had a substantial interest in the matter and was concerned.

Under other business, Hong Kong brought up the problem of the US embargo of wild harvested shrimp.

The US action is purported to have been taken for conservation and preservation of sea turtles, and is the result of a ruling by the US International Trade Court

Hong Kong had raised the issue before, and at that time the US had said it was considering various legal options including appeals against the ruling.

In reiterating its concern over the ban, Hong Kong sought information from the US as to the outcome of the US consideration of the legal option open to it, progress in the US administration's appeal against the court ruling and the measures the US was taking to minimise distortion of trade.

The Philippines, speaking also for Indonesia, Malaysia and Thailand, expressed concern over the ban and noted that all of these countries had their own extensive programs for conservation of sea turtles, and they found the US ban unwarranted.

Australia, India, Korea, Pakistan and Mexico joined in expressing concern over the US action, while the EC shared their preoccupation. Venezuela stressed the systemic implications of the US unilateral actions.

The United States said it had taken note of the concerns and would report to Washington.

Brazil, also speaking under other business, notified the Council members that it had withdrawn (on May 9) its request for a waiver on certain aspects of its automotive sector policies.

The request for waiver from some of the obligations of the General Agreement and the TRIMs agreement had been made by Brazil on 15 March. Brazil said that it had withdrawn the waiver request after informal consultations with various WTO members. Brazil was committed to the WTO rules and was aware of the rights and obligations involved and was transmitting to Brasilia the concerns of other delegations over this issue so that the Brazilian government could take account of them in its examination of the complex questions involved.

The Brazilian policy appear to involve some local content requirements and requirements for trade balancing requirements in respect of imports.

Korea said it was the principal victim of the Brazilian policy and urged the rescinding of the GATT-inconsistent measures. Japan too welcomed withdrawal of waiver request, but stressed the measures were clearly inconsistent with the WTO obligations and wanted them to be changed and brought into conformity with the rules.

The US also expressed appreciation over the withdrawal of the request for waiver and hoped the review would be quickly completed and the measures rescinded.

The European Community shared the concerns of others over the Brazilian measure and need for its withdrawal.