EU Retracts Unpopular Phone Import Tax Plans

by Ulrika Lomas, Tax-News.com, Brussels

09 July 2009

The European Commission has retracted its proposal for the imposition of a pan-EU customs duty on top-of-the-range mobile telephones. Since the proposal was first announced significant trading partners, including the United States, and major telecommunications manufacturers and providers, have relentlessly lobbied against the proposal.

The proposal, had it been introduced, would have meant that certain ‘multi-function’ mobile phones would have faced import duties of up to 14%.

The WTO initiated an investigation in 2008 after the proposals were questioned by the United States, Japan and Taiwan, who claimed that the EU’s plans infringed provisions in the Information Technology Agreement (ITA) of 1996.

United States Trade Representative Susan C. Schwab said:

“The EU committed to bind and eliminate duties on ITA products in its WTO tariff schedules. We believe that these duties are inconsistent with the EU’s commitments on these products, and that they discourage technological innovation in the IT sector.”

In one of Sweden’s first major actions after assuming the European Union presidency in July, it has announced that, following consultation and a vote amongst member states, the proposals would be official retracted. Swedish Trade Minister Ewa Bjorling welcomed the decision noting that member states should continue to embrace free trade and the reduction of barriers to trade, not introduce new ones.

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