萬國法律事務所

Taiwan recently won a dispute with the European Union (EU) over tariffs imposed on LCD flat screen panels produced in Taiwan. This victory is estimated to save Taiwan exporters as much as NT$ 19.6 billion (approximately US$ 608,695,650) each year on tariffs.

The EU had considered LCD panels sized 19 inches or larger with high-definition terminals and digital video terminals as television products, and therefore imposed tariffs as high as 14% on the products. However, a Taiwan official stated that such act by the EU was a violation of the Information Technology Agreement (ITA), which gives tax-exempt status for LCD panel imports.

Meanwhile, the EU has also imposed tariffs on Japan and the United States for set-top boxes and multifunctional printers/fax machines.

In 2008, Taiwan, together with Japan and the United States, filed a trade complaint with the World Trade Organization (WTO), arguing that panels should enjoy duty-free trade like other information technology products, and in mid-July 2010, the Dispute Settlement Body of the WTO ruled in favor of Taiwan and the 14% tariff on LCD panels was eliminated. The decision was officially confirmed by WTO on 23 July 2010.

The WTO ruling will take effect in December unless the EU appeals. If the EU does appeal, the case will have to be settled before March 2011.

With this ruling, Taiwan companies such as Chimei Innolux, BenQ and AU Optronics can save up to NT$19.6 billion in costs each year, and this will undoubtedly greatly enhance the competitiveness of Taiwan manufacturers.

Another significant aspect of this Ruling is that it has demonstrated the failure of International Law to keep up with developments in technology. The list of products that are exempt from tariffs in the ITA was decided in 1997. Since then, there have been significant developments in technology which may raise questions as to whether certain technology products still belong on the list. Analysts now hope that this ruling has raised awareness on this issue and that this case may act as a precedent or reference for future developments of law in this area.