A WORLD Trade Organization (WTO) panel has reportedly ruled against European Union tariffs on certain electronics products which the Philippines makes parts for, sources privy to the case yesterday said.
The panel, in a confidential interim report released only to the EU, the United States and other main parties, stated that the tariffs on imported flat panel displays, set-top boxes and multi-functional fax machines violated the Information Technology Agreement (ITA) which requires duty-free treatment, Trade Assistant Secretary Jose Antonio S. Buencamino said in a telephone interview.
Mr. Buencamino clarified that he had no other details regarding the ruling and had only been informed of the development by the Philippines’ representative office in Geneva.
The decision will become official only after a final report is circulated to all WTO members. This could take more than three months unless the entire membership rejects the panel’s decision or the parties appeal.
The case pitted the EU against electronic exporters the US, Japan, and China after the three asked the WTO to rule on the row in 2008. The Philippines, whose export earnings are driven largely by electronic components, joined the dispute as a third party participant the same year.
The WTO panel promised a ruling by July 2010.
The EU had countered that its tariffs do not violate the ITA since the treaty was not updated to include flat panel displays, set-top boxes and multi-functional fax machines as among the products eligible for duty-free treatment.
"[So far], they’ve ruled against the EU in the report. I was texted today by [our representative office to the WTO in] Geneva," Mr. Buencamino said.
Another source who declined to be named confirmed in a separate telephone interview that "the panel ruled against the EU ... but to what extent it is favorable to us is still unknown."
The Philippines’ legal counsel, Jeremy I. Gatdula, noted in a text message that it was the country’s first win at the WTO "in so many years".
The Philippines still has pending disputes with Thailand over the latter’s cigarette duties and with the US and the EU over excise taxes Manila slaps on imported alcohol.
Semiconductor and Electronic Industries in the Philippines, Inc. Chairman Arthur J. Young, Jr., for his part, said the industry would "hopefully see more opportunities to grow export sales to the EU."
Mr. Young had previously explained that the country builds components that go into LCD panels made in Taiwan and Japan for export into the EU.
Current tariffs make these products less attractive in the Western bloc and therefore indirectly hurt the Philippines, he said.
The country’s electronic export sales were up 45.08% to $8.704 billion as of the first four months of the year.
SEIPI expects 2010 export sales to grow by at least 20% this year after last year’s 22.2% decline.
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