EC surprised by WTO ruling

The European Commission has said it was "surprised" by a World Trade Organisation ruling against the way the EU, Ireland and the UK classify LAN products for customs purposes. The case was brought by the US last year, and trade representative, Charlene Barshefsky, said last week that the "arbitrary reclassification" had resulted in a near doubling of tariffs on LAN products. The EU is following the same approach as other trading partners in the past, including the US, and that is why the panel report has come as a surprise. "It is too early to say if we will appeal," a Commission spokesman said. The LAN products were classified by customs authorities into telecoms product categories, instead of computer categories, hence imposing higher import tariffs. The spokesman said the increase in tariffs was to 5% from 3% - and trade in these products amounts to hundreds of millions of dollars a year. Late last year, Commission sources said the EU had offered the US an immediate end to all import duties on these products, from the start of 1998, as part of a negotiated settlement without the panel report being published. The US refused the deal for unknown reasons.

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