The US has turned down an offer from the EU to end import duties on up to $1 billion on Lan equipment. The offer, which could have taken effect as early as 1 January, was proposed by the EU to resolve a World Trade Organisation dispute, European Commission sources said.
The EU made the offer to end the duties of 5-6 per cent on Lan equipment in response to a WTO dispute panel's interim report, which criticised the way the EU, and particularly the UK and Ireland, had classified Lan equipment in higher customs tariffs, they said.
?There were talks about a mutually satisfactory solution, in conformity with WTO and with no need for the report to appear. My understanding is that they have not reached a settlement and the final report will be issued in January,? a Commission source said.
?One of the things that could have been examined was the early implementation of duty reductions,? he said, referring to the WTO Information Technology Agreement's programme to phase out duties on Lan imports by the start of 2000.
Member states supported the early cut and would have been able to agree an end to the duty covering $500 million to $1 billion of Lan imports. ?It was not as if the US had to do anything. We would have done that. It is very difficult to say what they wanted,? the source said.
?The whole thing is a complete farce. Resolving it on a mutually satisfactory basis would have brought forward the duty cut and the report would not have been adopted?
?If the report is adopted then I suppose we might go to appeal because there would be legal points and then we would spin it out. By the time the report was adopted the duties would be pretty much down to zero,? the source went on.
Diplomats said the US had queried whether sufficient Lan products were covered by the EU offer but also noted that a settlement was complicated by an ongoing court case in Ireland on the issue, which was continuing in parallel.
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