Philippines sees electronics gain from WTO ruling

THE ELECTRONICS industry is poised to gain from a likely swifter removal of European Union (EU) tariffs on several high-tech goods.

This, after the Western bloc held off from appealing a World Trade Organization (WTO) order for it to do so, Ambassador Manuel A. J. Teehankee, the country’s permanent representative to that body, said in an e-mail late on Tuesday.

The EU did not object to a WTO preliminary ruling, issued back in August, against its tariffs on flat panel monitors, multi-function fax machines, and TV set top boxes which the multilateral organization had deemed “inconsistent” with the Information Technology Agreement (ITA), Mr. Teehankee said. That pact requires zero tariffs on high-tech goods.

Without an appeal, the WTO dispute settlement body (DSB) was thus able to formally adopt the panel report as a final ruling on Tuesday, Mr. Teehankee said.

The ruling was adopted roughly two years after three complainants — United States, Japan and Taiwan — sought talks with the EU to settle the matter.

The EU had argued that the disputed products were not covered by the treaty since technological modifications excluded them from the original definition of electronics qualified for zero tariff treatment.

The Philippines later signed on as a third-party observer, arguing that it was the 10th largest electronics supplier to the EU.

“The Philippineswelcomes the adoption of the rulings of the Panel that the European Community violated its WTO obligations by imposing customs duties on information technology products that should have been granted duty-free treatment under the ITA,” Mr. Teehankee said. “The Philippines hopes and urges that the EU promptly implement the DSB’s recommendations and rulings of the adopted Panel Reports.”

WTO rules provide that the EU will have to state its intention within 30 days to comply with the ruling. The bloc may be able to negotiate for a “reasonable period of time” to align its policies. If it fails to keep within this schedule, it will have to enter into talks with the complainants to agree on suitable compensations, such as tariff reductions in other areas. — Jessica Anne D. Hermosa, Businessworld