EUROPE - According to reports, the European Commission has “strongly rejected” the US complaint that the customs classification applied to specific technological products is not justified under the Information Technology Agreement (ITA).
In a statement, the EU said that it has “respected its ITA obligations and has explicitly said it is willing to reassess the current ITA product coverage to reflect new technology in a negotiation with all ITA signatories… even though the ITA is not a bilateral agreement and changes to its criteria cannot be made as a result of bilateral litigation.”
The ITA was negotiated and signed in 1996, with a goal of expanding trade in IT and telecommunication products by eliminating tariffs on a range of products. The 29 countries originally negotiating the agreement has since grown to 71.
The EU claims that it has always expressed its willingness to reassess product coverage under the ITA to reflect changes in technology since 1996, and stated that the ITA has a review clause, which can be invoked by members at any time. The EU has said it is willing to negotiate with all other ITA members.
But the EU statement goes on to say that it believes that litigation will not change the ITA, and that the agreement is not a bilateral EU-US agreement, and that change in ITA criteria can only be made on the basis of the consensus of all ITA participants.
The EU, as required by WTO law, has claimed that it bases its customs classification (and changes thereto) exclusively on the objective characteristics of the products, claiming that when a product is given multiple functions, for example, a digital camera that also records high-quality video, then these products are objectively different products falling outside of the original product categories covered by the ITA.