Wednesday, December 3, 2008

The computers have complained to Europe

computer historyThe World Trade Organization (WTO) often becomes the latest instance in economic disputes developed nations. But rarely such proceedings relate to companies IT-industry. One of those rare cases occurred relatively recently.

Conflict of interest

This is not completed so far story began in June this year. Then the U.S. government and Japan sent a joint complaint with the WTO. They complained to the European Union, which in their view, charged with manufacturers of computer equipment unnecessary taxes. Specifically, it was about companies that produce computer monitors, printers and cable converters. The reason for the differences is that these groups when importing goods into the territory of the EU duty-free to reach 14%. Interestingly, however, that the major manufacturers of such equipment - China, Taiwan, Malaysia - claims not to the Europeans.

In a sense, the root of the conflict - the International Agreement on Information Technology (International Technology Agreement - ITA), which was concluded in 1996, USA, Singapore and several countries. The agreement provided for a graduated reduction in tax duties on high-tech products and complete their removal from 1 January 2000 At the same time, was defined list of products - it covered more than 90% of all computer components produced in the world. However, in the middle of this decade, officials of the European Union refused to include a number of products in the category of computer. Trying to defend the interests of its producers, Americans and Japanese have about 20 months spent on consultancy talks and negotiations with the Europeans. But to no avail.


International Technology Agreement - International Agreement on Information Technology, which was adopted at the First Ministerial Conference - WTO members in Singapore in 1996. It provided for the gradual lowering of customs tariffs on products of high-tech sector. From 1 January 2000, all countries - participating in the agreement entered zero tariffs on computers and peripherals, as well as associated products. As of April 2008, the ITA joined 70 countries including Russia. Currently, the WTO discussed the issue of expanding the list of goods not subject to customs duties under the agreement. According to experts, ITA allows manufacturers of computer equipment annually save up to $ 5 billion

Controversial duties

The official position of the European Union is this: over the past 12 years computers and consumer electronics went far ahead. As a result, today it is difficult to determine whether to include a product category to the computer. A typical example: EU rules on computer monitors with flat screen TVs fall into the category. The motivation is simple: Most modern monitors allow them not only PCs but also other video sources including television. As a result of the EU flat screens are subject to 14 per cent tax. Same as the approach to printers. Current devices can not only print the text or images, but also send faxes, scan and copy documents. That is «enter the territory» household and office equipment. This means that in Europe are subject to 6 per cent tax. As the calculations, because of taxes on imports of European monitors, printers and cable converters alone, Japanese companies have to spend annually approximately $ 200 million

Meanwhile, the Europeans successfully extract a profit from the controversial tariffs on computer equipment. First, their presence keeps at a high enough level of demand for machinery European manufacturers. Because of the tax, many U.S. and Asian companies or ceased to import into the EU some kinds of goods, or increase their value, offsetting tax expense. In any case, residents of Europe becomes more attractive as European products. Secondly, customs duties, in this case, oddly enough sounds, encourage investment in the EU. The fact is that Europe - the second largest market for computer products (after USA). Manufacturers of computer technology at duties zlyatsya, but withdraw from the market can not afford. And as a result, many high-tech companies of Japan, USA, South Korea and other countries engaged in assembling its products directly in Europe. It creates new jobs and the economy is relatively weak EU countries (Poland, Hungary, Romania, Bulgaria) «podtyagivaetsya» to a higher level. If Japan and the U.S. still win in the trade dispute with the European Union, the current tariffs will be lifted. The result could be that thousands of people in Poland and other countries will lose work. International Computer Corporation perenesut their production to other countries where labor and rent worth more cheaply - most likely somewhere in Southeast Asia. But this is only one of the troubles. Another trouble is that while Europe will lose even the few computer industry that there are today.

The main battle front

According to WTO rules, following a complaint by some of the countries participating in the organization formed a special commission - over the 60 days it is conducting an investigation and organizing negotiations between the parties to the economic dispute. It is believed that during this period can be resolved any conflict. But in this case, analysts are united in their opinion: the settlement evroamerikanskogo «computer» conflict certainly be prolonged for a very long time. The reason is that the WTO has proposed to amend the ITA, to expand the list of high-technology products and replacing some language. New language in the future will help to include many kinds of computer products that is in this category, which means, «show» them from the effect of taxes. For example, if a digital camera will be able to send faxes to video and cook coffee, it can not be classified as household appliances. I, of course, utriruyu, but not much. The benefits for large IT-companies from maintaining ITA agreement as it stood was clear. Now the market technology products are finding it increasingly difficult to distinguish one product from another. For example, modern high-definition TV sets can connect to PCs and use them as monitors. A computer monitors are becoming more like television - even their own TV-tuner obzavodyatsya. Thus, that while the wording ITA remain the same, IT-companies can bring their goods to other countries without paying any fees. And Europeans are not happy.

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