Limits to Free Trade

Limits to Free Trade

Non-Tariff Barriers in the European Union, Japan and United States

David Hanson

This book explores the growing list of non-tariff trade barriers raised by the US, EU and Japan and assesses the prospects for significant trade liberalization. The author examines the liability of global free trade through a review of the complaints that these three countries raised about each other over a five-year period. He concludes that free trade may be increasingly hampered as barriers are created more rapidly than can be resolved, and that the prospects for significantly strengthening safeguards are limited.

Chapter 6: Issues Concerning EU Trade Practices

David Hanson

Subjects: business and management, international business, economics and finance, international economics


INTRODUCTION Forty-trade issues were raised against the EU by the United States and Japan between 2002 and 2006/2007. A theme of “social protection” seems to run through many of these issues. The major problems were caused by EU environmental initiatives, as well as protection of foodstuffs and cultural traditions. 2. ISSUES RAISED IN 2002 AND 2006/2007 The list of 18 issues raised against the EU in both 2002 and 2007 is set forth in Table 6.1. 2.1 Import-related Issues 2.1a Trade administration Tariff classifications for computer peripherals EU tariffs on electronic products, absent special agreements, are relatively high. Computers and computer peripherals are covered by the Information Technology Agreement and should be admitted into the country tariff free. Instead, the EU is classifying several categories of computer-related equipment as “general electronics” and assessing a duty of 6 per cent ad valorem. Japan argues that these machines are designed to be used as digital computer peripherals, which gives them their “essential character”. Alternatively, they should be classified under the heading which occurs last in numerical order. Under either rule, digital multi-purpose machines should receive a 0 per cent EU tariff rate (Japan, 2002, p. 80; Japan, 2006, p. 175; Japan, 2007, p. 11; United States 2007, p. 206). The banana wars The EU has a longstanding policy of favoring excolonies in trade arrangements. Under the “general system of preferences”, 112 Issues concerning EU trade practices 113 Table 6.1 Issues raised concerning EU trade practices in 2002 and 2007 United States 2007...

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