Document: WT/DS375/R WT/DS376/R WT/DS377/R Page E-1 ANNEX E ARGUMENTS OF THE THIRD PARTIES CONTENTS PAGE E-1 Oral statement by Australia at the first substantive meeting E-2 E-2 Executive Summary of the third party submission by China E-6 E-3 Oral statement by China at the first substantive meeting E-8
Document codes: WT/DS375/R; WT/DS376/R; WT/DS377/R
Complainant: Taiwan
Respondent: EU
Third parties: Australia, Brazil, China, Costa Rica, Hong Kong, India, Japan, South Korea, Philippines, Singapore, Thailand, Turkey, U.S., Vietnam
Dispute stage: Panel
Agreements cited: Art. II:1, X:1, X:2, XXIII  GATT 1994

ANNEX E

ARGUMENTS OF THE THIRD PARTIES

CONTENTS PAGE
E-1 Oral statement by Australia at the first substantive meeting E-2
E-2 Executive Summary of the third party submission by China E-6
E-3 Oral statement by China at the first substantive meeting E-8
E-4 Executive Summary of the third party submission by Costa Rica E-10
E-5 Oral statement by Costa Rica at the first substantive meeting E-13
E-6 Oral statement by Hong Kong, China at the first substantive meeting E-16
E-7 Oral statement by India at the first substantive meeting E-18
E-8 Executive Summary of the third party submission by Korea E-20
E-9 Executive Summary of the third party submission by the Philippines E-22
E-10 Executive Summary of the oral statement by the Philippines at the first
substantive meeting
E-24
E-11 Executive Summary of the third party submission by Singapore E-26
E-12 Executive Summary of the oral statement by Singapore at the first
substantive meeting
E-29
E-13 Oral statement by Thailand at the first substantive meeting E-31
E-14 Executive Summary of the third party submission by Turkey E-33
E-15 Oral statement by Turkey at the first substantive meeting E-35

ANNEX E-1

ORAL STATEMENT BY AUSTRALIA
AT THE FIRST SUBSTANTIVE MEETING

I. INTRODUCTION
1. Chair, Members of the Panel, Parties and Thir d Parties, Australia welcomes this opportunity
to present its oral statement today in open hearing.
2. This dispute centres on the interpretation of the European Communities (EC) WTO Schedule
of Concessions, as modified pursuant to the Ministerial Declaration on Trade in Information
Technology Products (ITA).
1
3. As a general remark, Australia emphasises that the correct interpretation of Members'
Schedules of Concessions (Schedules) is fundamen tal to the maintenance of the security and
predictability of the multilateral trading system.
II. AUSTRALIA'S VIEWS ON THE CORREC T INTERPRETATION OF THE EC'S
SCHEDULE
4. In accordance with Article II of the GATT 1994, WTO Members have an obligation to grant
"treatment no less favourable than that provided" in their Schedules. Specifically, subject to the
terms, conditions or qualifications set forth in Sc hedules, products are to "be exempt from ordinary
customs duties in excess of tho se set forth" in those Schedules.
2 The relevant Schedule establishing
the obligations of the EC in the present dispute is the EC Schedule as modified by the "Certification
of Modifications to Schedule LXXX – Eu ropean Communities" of 2 July 1997. 3 Pursuant to GATT
Article II:7, a Member's Schedule of concessions is made an integral part of GATT 1994. Hence, the
correct approach for the Panel to adopt in examining the EC's Schedule is set out in Article 3.2 of the
DSU,4 which states that the clarification of provisions unde r the covered agreements is to be done "in
accordance with customary rules of interpretation of public international law."
5. The ITA is clearly an important element in this dispute. The ITA adopted a dual approach to
the identification of products and the subsequent scheduling of commitments. Products were
identified both through a list of World Customs Organization (WCO) HS 1996 5 product codes and
descriptions in Attachment A to the Annex to the ITA, as well as through a list of specific products to
be covered regardless of where they were classifi ed, included in Attachment B to the Annex to the
ITA.
6. When scheduling these commitments, WTO Member s party to the ITA maintained this dual
approach to product coverage. The EC listed HS tariff headings in Attachment A directly into their
Schedule. For Attachment B a "headnote" 6 was also incorporated, which explicitly provided that any

1 WT/MIN(96)/16 signed at the WTO Ministerial Conference, Singapore, 13 December 1996.
2 Art II:1(b) to the GATT 1994.
3 WT/LET/156, 15 August 1997.
4 Understanding on Rules and Procedures Governing the Settlement of Disputes.
5 World Customs Organization Harmonized Commodity Description and Coding System (Harmonized
System).
6 The headnote to the EC Schedules states:
"With respect to any product described in or for Attachment B to the Annex to the Ministerial
Declaration on Trade in Informat ion Technology Products (WT/MIN(96)/16), to the extent

product described "in or for Attachment B" had a bound tariff rate of zero. The text of the headnote,
as part of the Schedule, must be interpreted in accordance with customary rules of interpretation of
public international law, as codified in the Vienna Convention on the Law of Treaties (Vienna
Convention).
7. Article 31 of the Vienna Convention provides that "a treaty shall be interpreted in good faith
in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in
light of its object and purpose." Article 31(2) sets out what can be considered "context" in treaty
interpretation.
8. In Australia's view, in accordance with Article 31, the operation of the headnote requires that
concessions relating to the product de scriptions in Attachment B are not limited to tariff headings
solely identified by the EC. The headnote is a co ncession that operates in addition to the EC's tariff
headings through the inclusion of the words "where ver the product is classified". Accordingly, the
scope of this concession is only limited by the scope of the product descriptions as set out in
Attachment B and not by individual tariff headings. This view is supported by the ordinary meaning
of the text of the headnote. Such an interpreta tion gives meaning to the headnote and does not reduce
it to "inutility."
7
9. Turning to the question of context, Australia recognises that both the Harmonized System and
the ITA can be relevant "context" when interpreting Members' Schedules.
10. In EC – Chicken Cuts 8, the Appellate Body said that the Harmonized System was relevant
"context" in the interpretation of tariff commitme nts in Members' Schedules within the meaning of
Article 31(2)(a) of the Vienna Convention . The Appellate Body formed this view after noting that
there was broad consensus to use the Harmonized System as a basis for Members' Schedules at the
time of the Uruguay Round negotiations. Australia agrees with this view.
11. In the present dispute Australia considers that the Harmonized System is the starting point,
but not the end point, for the identification of the correct context to interpret Schedules. Interpretation
of Schedules must also take account of other releva nt context and, ultimately, of the actual terms of
those Schedules. This view is supported by the statement of the Appellate Body in the China – Auto
Parts dispute where it said that the Harmonized Sy stem and its product categories had limits and
"cannot trump the criteria contained in Article II:1(b) (of the GATT 1994)."9
12. Australia considers that the ITA provides im portant "context" for interpreting the EC
Schedule, the headnote and product descriptions unde r the headnote that accompany tariff headings in
that Schedule. Article 31(2)(b) of the Vienna Convention provides that context relevant to treaty
interpretation includes "[a]ny instrument made by one or more parties in connexion with the

not specifically provided for in this Schedule, the customs duties on such product, as well any
other duties and charges of any kind (within th e meaning of Article II:1(b) of the General
Agreement on Tariffs and Trade 1994), shall be bound and eliminated, as set forth in
paragraph 2(a) of the Annex to the Declaration, wherever the product is classified."
7 Appellate Body reports in US – Gasoline , WT/DS2/AB/R, at p. 23 and EC – Chicken Cuts ,
8 EC – Chicken Cuts para. 199. See also, China – Auto Parts , WT/DS339/AB/R, WT/DS340/AB/R
and WT/DS342/AB/R, para. 149 where the Appellate Body said "[i]t follows that the Harmonized System is
context for purposes of interpreting the covered agreements, in particular for the classification of products under
Schedules of Concessions…".
9 China – Auto Parts para. 164.

conclusion of the treaty and accepted by the other parti es as an instrument related to the treaty." The
ITA was adopted by participating Members during the Singapore Ministerial Conference of the WTO,
a declaration expressly welcomed by all Members.
10 Australia notes that pursuant to the ITA, parties
agreed to modify their Schedules to incorporate ITA commitments. Members accepted the ITA as an
instrument related to the EC Schedule by agreeing to modifications made to the EC Schedule pursuant
to the ITA. Furthermore, the Appellate Body h as previously established that while each Member's
Schedule represents the tariff commitments made by that Member, Schedules also "represent a
common agreement among all Members."11
13. Australia recalls that specific reference is made in the EC Schedule to "[f]lat panel devices …
for products falling within this agre ement, and parts thereof", and "[s]et top boxes". In its submission
the EC has sought to narrow the scope of its co mmitments under the headnote to the HS codes it
identified alongside the product descriptions. Austra lia disagrees with this approach and considers
that such an approach effectively reads-out words or text included in the Schedule, in particular the
headnote, and is not consistent with the rules of treaty interpretation.
14. Australia acknowledges that a provision to ne gotiate the inclusion of additional products
exists within the ITA. 12 However, in our view, this does not imply that products that fell within the
ITA at the time of its conclusion would automatically fall outside the scope of tariff free treatment on
the basis of technological advancement.
15. In its first written submission, the EC cites a j udgment of the European Court of Justice in the
Kip case.13 The Court there held that multifunctional di gital machines capable of performing one or
more data processing functions in addition to co pying "could not be classified directly under
heading 8471 60 unless it was shown that the copyi ng function was 'secondary' " to other automatic
data processing (ADP)-related functions (such as printing). 14 The EC goes on to state that when the
"copying function of the MFMs at issue in this section is not secondary in relation to their ADP
functions, they are prima facie classifiable under the HS96 headings 8471 and 9009". 15 In such cases,
the EC concludes that the Harmonized System remain s the correct procedure to classify products with
more than one "material or component wh ich gives them their essential character." 16 Australia does
not make a comment on the individual classification d ecisions of the EC, but recalls that the legal
obligation of the EC contained in the headnote to its Schedule provides that the customs duties on
products described in or for Attachment B are to receive tariff free treatment "wherever the product is
classified."
III. AUSTRALIA'S VIEWS ON THE PRODUCTS AT ISSUE IN THIS DISPUTE
16. We wish now to touch briefly on the specific products at issue in this dispute. Addressing flat
panel displays, Australia recalls the EC states in its first written submission that only "genuine ADP"17
monitors fall within HS96 heading 8471 60 and w ould accordingly be entitled to duty free treatment.

10 See Singapore Ministerial Declaration, adopted on 13 December 1996, WT/MIN(96)/DEC para. 18.
11 EC – Computer Equipment, WT/DS62/AB/R, WT/DS67/AB/R and WT/DS68/AB/R, para. 109.
12 Paragraph 3 to the Annex to the ITA, WT/MIN(96)/16.
13 European Court of Justice, Joined Cases C-362/07, Kip Europe and Others , and Hewlett Packard
International C-363/07.
14 European Communities' first written submission in EC – IT Products , WT/DS375, WT/DS376 and
WT/DS377, para. 359.
15 European Communities' first written submission, para. 435.
16 HS96 GIR 3(b). See European Communities' firs t written submission at para. 441 states "[s]ince
GIR 3(b) cannot be applied, it is necessary to resort to GIR 3(c)."
17 European Communities' first written submission, para. 100.

This is provided for in EC Regulation 1031/2008 which limits tariff free treatment to monitors "[o]f a
kind solely or principally used in an automatic data-processing system" (emphasis added).
18 Australia
notes the language "solely or principally" in that Re gulation is reflected in Note 5(B)(a) of Chapter 84
to HS 1996. 19 Australia recalls that the headnot e to the EC's Schedule provides, inter alia, for tariff
free treatment of products "described in or for Attachment B" wherever they are classified. 20 Given
that Attachment B specifically includes "[f]lat pa nel displays … for products falling within this
agreement", Australia considers that the EC's a pproach of providing tariff free treatment only to
monitors that can solely be used in an ADP is at odds with its requirement to provide tariff free
treatment to products pursuant to its Schedule.21
17. Addressing multifunctional machines that can be connected to an ADP, Australia notes that
Chapter Note 5(D) to Chapter 84 of the HS 1996 establishes that, among other products, "[p]rinters …
which satisfy the conditions of paragraphs (B) (b) and (B) (c) above, are in all cases to be classified as
units of heading No. 84.71" (emphasis added) wher e they are connectable to a central processing unit
and can accept or deliver data used by the system. Further, "[p]rinters" are cited as an example of an
"output unit" in Subheading Note (1) to Chapter 84 of HS 1996.
18. Lastly, briefly touching on set top boxes, Au stralia again notes the absence of restrictive
language either in the EC Schedule or in Attachme nt B that could permit the narrow interpretation of
products to receive tariff free treatment. Austra lia considers that the ordinary meaning of the
neologism "set top box" was not frozen in time at th e conclusion of the ITA, and an assessment of the
objective characteristics or essential character of set top boxes must be viewed in their context and in
the light of the object and purpose of the EC's Schedule.
IV. CONCLUSION
19. In conclusion, Australia considers that where a Member incorporates language in its schedule,
this represents a binding obligation upon that Member. In the event of specific reference to, or
incorporation of, another agreement, such as the IT A in the present dispute, this material constitutes
relevant "context" to assist in the interpretation of the ordinary meaning of treaty text consistent with
customary rules of international law, as provided for in the DSU.

18 Commission Regulation (EC) No 1031/2008 of 19 September 2008.
19 Note 5 (B) (a) to HS96 Chapter 84.
20 See "headnote" to EC Schedule, WT/LET/156.
21 Further, in the absence of restrictive language, the ordinary meaning of the word " for" cannot be
viewed narrowly.

ANNEX E-2

EXECUTIVE SUMMARY OF THE
THIRD PARTY SUBMISSION BY CHINA

1. The People's Republic of China (hereafter "China ") makes this third party submission for the
systemic interests in the interpretation of the EC's Schedule of Concessions that implements EC's
commitments under the ITA. (the "EC Schedule").
2. In disputes that involve alleged violation of Ar ticle II(a) and (b) of GATT 1994, the text to be
interpreted is the WTO member's concession schedule. Therefore, China submits that the key issue of
the present dispute concerns with the interpretation of the relevant parts of the EC Schedule. Since
the EC Schedule is a WTO treaty, its interpreta tion should follow the well-established methodology
provided in Articles 31 and 32 of the Vienna Convention on the Law of Treaties (the "Vienna
Convention"). China submits that the elements pr escribed in Article 31, i.e. ordinary meaning,
context and object and purpose of the text to be in terpreted, are of equal interpretational value and
none is dispositive in the interpretation.
3. In this submission, China will focus on the FPDs in the dispute. For the FPDs at issue, China
first identifies two sources of text to be interprete d in the EC Schedule: (1) tariff heading 8471.60.90
and the corresponding product description and (2) th e Headnote Table that includes all products of
Attachment B to ITA. ("Headnote Table") Tariff head ing 8471.60.90 covers input or output units for
ADP machines. By dictionary definition, output un its are external devices that deliver information
from ADP machines. With respect to the Headnote Table, it covers "flat panel display devices
(including LCD, Electro Luminescence, Plasma, Vacuum-Fluorescence and other technologies) for
products falling within [ITA] and parts thereof." By dictionary definition, "flat panel display devices"
are thin display devices for apparatus, including ADP machines. The term "products falling within
[ITA]" excludes FPDs for non-ITA covered products.
4. China further submits that there are two sources relevant for contextual interpretation in the
present dispute: (1) HS 1996 and (2) ITA. The re levance of HS as a source of context is confirmed
by WTO law. Since the EC Schedule was based on HS 1996, it provides a relevant context for the
interpretation. Furthermore, pursuant to Section 2( b) of Article 31 of the Vienna Convention, ITA
also serves as the context for the interpretation of the EC Schedule.
5. To be a unit of ADP machines, the unit must be, inter alia, solely or principally used in an
ADP system according to Note 5(B) to Chapter 84 of HS 1996. Therefore, an output unit of ADP
under the heading 8471.60.90 is necessarily used so lely or principally with ADP machines.
Conversely, an output device is not considered a unit of ADP machine within the meaning of
8471.60.90 if it is not used solely or principally with ADP machines.
6. With regard to ITA, China notices that Att achment B to ITA expressly exempts television,
including high definition televisions from its coverage . China also notices that Attachment B states in
the relevant part that "[m]achines performing a specific function other than data processing, or
incorporating or working in conjunction with an automatic data processing machine, and not
otherwise specified under Attachment A or B, are not covered by this agreement." It can be
concluded from the contexts that FPDs for non-ITA covered products, such as televisions, are beyond
the scope of ITA.
7. Moreover, China observes that ITA features a limited coverage of IT products, with the object
and purpose of reflecting a balance reached by the parties to ITA. China recalls that the panel in
EC –

Chicken Cuts stated that interpretation of the term of a concession should not disrupt the balance
negotiated by the parties. Thus China submits th at WTO treaties should not be interpreted in a way
that disrupts the balance on product coverage.
8. China hopes the viewpoints and various issues rai sed in this submission may assist the Panel
in its decision

ANNEX E-3

ORAL STATEMENT BY CHINA
AT THE FIRST SUBSTANTIVE MEETING

9. Mr. Chairman, distinguished members of the Panel, China appreciates this opportunity to
present its views over the present dispute. In this statement, I will highlight the main points of China's
third party written submission.
10. In this dispute, China believes the key issue is the interpretation of the relevant parts of the
EC Schedule. In line with WTO jurispruden ce, China follows the methodology established by
Articles 31 of the Vienna Convention on the Law of Treaties ("Vienna Convention") for the
interpretation of treaty languages and focuses its analysis on the flat panel devices ("FPDs") in
question.
11. First, China identifies two sources of text in the EC Schedule for the interpretation of ordinary
meaning: (1) tariff heading 8471.60.90 and the corresponding product description, and (2) the
Headnote Table that includes all products of Attach ment B to the Information Technology Agreement
("ITA").
12. Tariff heading 8471.60.90 covers input or output units for automatic data processing ("ADP")
machines. According to dictionary definition, output units are external devices that deliver
information from ADP machines.
13. The Headnote Table covers FPDs for products fallin g within ITA. It can be inferred from the
term "products falling within ITA" that FPDs for non-ITA covered products are excluded.
14. Second, China submits that there are two sources of context: (1) HS 1996 and (2) ITA.
15. HS 1996 provides requirements for a device to qualify as a unit of ADP machines within the
meaning of heading 8471.60 under HS 1996. Accord ing to Note 5(B) to Chapter 84 of HS 1996, a
unit must be solely or principally used in an ADP system to be covered by the heading 8471.60.90. In
other words, an output device is not considered a unit of ADP machine within the meaning of
8471.60.90 if it is not used solely or principally with ADP machines.
16. With regard to ITA, China notices that Att achment B to ITA expressly excludes television
from its coverage. China also notices that Attachment B states in the relevant part that "[m]achines
performing a specific function other than data proces sing, or incorporating or working in conjunction
with an automatic data processing machine, and not otherwise specified under Attachment A or B, are
not covered by this agreement."
17. It can be concluded from the above two cont exts that FPDs for non-ITA covered products,
such as FPDs not used solely or principally with ADP machines and FPDs used for televisions, are
beyond the scope of ITA.
18. Third, with respect to the element of object and purpose, China recalls that the panel in EC –
Chicken Cuts stated that interpretation of the term of a concession should not disrupt the balance
negotiated by the parties. China observes that ITA features a limited coverage of IT products,
reflecting a balance reached by the parties to ITA. Therefore, China submits that no interpretation
should disrupt such a balance.

19. Based on the above analysis, China believes that FPDs for non-ITA covered products, such as
FPDs not used solely or principally with ADP machines and FPDs used for televisions, are not
covered by the EC Schedule.
20. This concludes my presentation. Thank you very much for your attention.

ANNEX E-4

EXECUTIVE SUMMARY OF THE
THIRD PARTY SUBMISSION BY COSTA RICA

1. Costa Rica is intervening in th is case because of its systemic and commercial interest in the
proper interpretation of the tariff concessions ma de by WTO Members pursuant to the Information
Technology Agreement (ITA). As a developing co untry, Costa Rica has greatly benefitted from its
participation in the ITA. In 2007, informati on technology products accounted for approximately
12 per cent of all imports to Costa Rica and for approximately 25 per cent of Costa Rica's total
exports. The information technology sector is, thus, of critical importance to Costa Rica's economy.
2. The complainants submit that the products at issue in this dispute (multifunctional machines
(MFMs), flat panel display devices (FPDs) and set-top boxes that have a communication function
(STBs)) must be accorded duty-free treatment by the EC as provided for in its Schedule of
Concessions and pursuant to its obligations undertaken in the ITA. The EC responds that the products
at issue fall "within the scope of other concessions included in the EC Schedule, which do not provide
for duty free treatment". The interpretative issue for this Panel, therefore, is to determine the proper
product scope of the tariff concessions at issue. In Costa Rica's view, the Panel should conduct this
analysis by using the principles of treaty interpretation as set out in Articles 31 and 32 of the Vienna
Convention on the Law of Treaties and not by applying rules of customs classification.
3. In Costa Rica's view, the relevant obligation of which the EC is allegedly in breach can be
determined through the following order of analysis:
 First, by an examination of the tariff lines of the EC's Schedule to determine whether the
product at issue falls within the scope and content of the concession;
 Second, if the product at issue is not accorded duty free treatment in the Schedule ("to the
extent not specifically provided for in this Schedule"), then by recourse to the headnote
of the EC's Schedule, which provides:
"With respect to any product described in or for Attachment B to the
Annex to the Ministerial Declaration on Trade in Information
Technology Products (WT/MIN(96)/16), to the extent not
specifically provided for in this Schedule, the customs duties on such
product, as well as any other duties and charges of any kind (within
the meaning of Article II:1(b) of the General Agreement on Tariffs
and Trade 1994), shall be bound and eliminated, as set forth in
paragraph 2(a) of the Annex to th e Declaration, wherever the product
is classified."
 Third, by determining whether the product at issue is described in or for Attachment B
(i.e., those products listed in Attachment A) to the Annex to the ITA.
4. The three complainants and the respondent all acknowledge the relevance of the ITA for the
interpretation of the tariff concessions at issue in this dispute. In Costa Rica's view, it would be
appropriate to identify the status of the ITA within the analytical framework of the Vienna Convention
on the Law of Treaties . In Costa Rica's view, the ITA is "context" within the meaning of
Article 31(2)(b) of the Vienna Convention . The Ministerial Declaration of the ITA reflects the
intention of the participants to have a broad in terpretation of the product coverage of the ITA.

Paragraph 3 of the Ministerial Declaration states that "Ministers express satisfaction about the broad
product range outlined in the Attachments to the Annex to this Declaration." This statement, read in
conjunction with the third and fourth recitals in the Preamble, read together with paragraph 3, suggest
that although participants were pleased with the br oad product coverage of the ITA, they nevertheless
wanted to ensure technological development (i .e., such as new products ) to achieve maximum
"freedom" (i.e., duty-free treatment) for information technology products.
5. The EC states that "the inclusion of a new product must be negotiated; it cannot be assumed
to be covered by the concessions just because it happens to also perform similar functions as a product
that is covered by the concessions. And this nego tiation procedure is precisely what the ITA foresees
explicitly." It seems that the EC's position is that any technological change in a covered product gives
rise to the requirement to agree by consensus to positively add that "new" product to the coverage of
the ITA. This approach is contrary to the ai m of the ITA, which notes that although the parties
wanted to "encourage technological development", th ey specifically declared that "each party's trade
regime should evolve in a manner that enha nces market access opportunities for information
technology products". If other WTO Members and the Panel were to adopt the approach suggested by
the EC, the number of products that would benefit from duty-free treatment pursuant to ITA
obligations would be steadily decreased in the li ght of the rapid technological developments that
occur in the field of information technology.
6. With respect to set-top boxes, the EC submit s that the complainants' claims suffer from
serious errors because the complainants refer to a "set-top box with a communication function",
whereas the EC commitment is with respect to "set-top boxes which have a communication function"
(emphasis added). In the EC's view, based on the di ctionary definition and the context of the words,
there is a significant difference between the terms "which have" and "with". In Costa Rica's view,
there is no support for an interpretation that w ould give the two phrases significantly different
meanings. Costa Rica also notes th at the wording in the French and Spanish versions of the ITA,
which are both equally authentic, do not correspond exactly to the English phrase "which have".
7. With respect to flat-panel display devices, the issue is whether they fall within the definition
of "flat panel display devices (including LCD, Electro Luminescence, Plasma, Vacuum-Fluorescence
and other technologies) for products falling within this agreement, and parts thereof" provided in
Attachment B of the ITA. The EC argues that a unit must be "solely or principally used in an
automatic data-processing system" and therefore must be for exclusive use with an ADP machine in
order to be classified as a flat-panel display device under 8471. In Costa Rica's view, there is no
textual basis to support this interpretation.
8. Costa Rica notes that MFMs are machines that ma y be used for scanning, digital copying, or
facsimile transmission, in addition to printing. Th e issue is whether a MFM with connectivity to an
ADP machine that is capable of scanning, printing and faxing should be classified under 8471 60 as
an "input or output unit for automatic data processing machines" or under 9009 12 00 as
"photocopying apparatus". As noted by the th ree complainants, MFMs should be classified under
8471 or 8471 60 as they are not "photocopiers". Photocopying is based on optical technology,
whereas the products at issue manipulate the digital da ta in order to produce the printout. In Costa
Rica's view, it is doubtful that the transmission of digital data constitutes a form of photocopying.
9. Costa Rica considers that this case raises important questions with respect to the interpretation
of the tariff concessions made by WTO Members pursuant to the ITA. As a developing country with
a strong interest in expanding its information technology sector, Costa Rica considers that such tariff
concessions must be interpreted, consistently with the Vienna Convention, in such a manner as to give

effect to the aim of the ITA that "each party's trade regime should evolve in a manner that enhances
market access opportunities."

ANNEX E-5

ORAL STATEMENT BY COSTA RICA
AT THE FIRST SUBSTANTIVE MEETING

I. INTRODUCTION
1. Costa Rica appreciates this opportuni ty to express its views at th is meeting of the Panel with
the parties and the third parties.
2. As a developing country, Costa Rica has greatly be nefited from its participation in the ITA.
Costa Rica is intervening in this case because of its systemic and commercial interest in the proper
interpretation of the tariff concessions made by WTO Members pursuant to the ITA. This is the first
time a panel is required to interpret a Member's tariff concessions pursuant to the ITA and to
determine the treatment to be accorded to products falling under the ITA. As noted by Singapore, this
case has potentially far-reaching implications for global trade in information technology and
technological innovation generally.
1
3. In its written submission, Costa Rica has put fo rward its views on the claims of the three
complainants and on the defense of the respondent, and will therefore not repeat all its comments at
this time. We respectfully request the Panel to be mindful of these comments, in particular with
respect to the scope and coverage of the tariff conc essions at issue and the categorization of the ITA
as context within the meaning of Article 31(2)(b) of the Vienna Convention, in the course of assessing
the matter before it.
4. Costa Rica would like to take this opportunity to comment on two substantive issues:
(i) whether the procedures provided for in paragraph 3 of the Annex to the ITA must be followed in
order for the products at issue to receive duty-free treatment or whether such products are covered by
the concessions in the EC Schedule based on the ITA and its Attachments; and (ii) whether additional
features or functionalities of a product disqualify that product from receiving duty-free treatment
under the EC Schedule based on the ITA and its Attachments.
II. WHETHER THE PROCEDURES PROVIDED FOR IN PARAGRAPH 3 OF THE
ANNEX TO THE ITA MUST BE FOLLOWED IN ORDER FOR THE PRODUCTS
AT ISSUE TO RECEIVE DUTY-FREE TREATMENT?
5. Turkey states that only those products that are specified in the two attachments of the Annex
to the ITA must be accorded duty-free treatment. In its view, the products at issue in this dispute do
not fall under the current ITA. Turkey notes that if parties wish to extend the product coverage of the
ITA, they have to follow the procedures set fo rth in paragraph 3 of the Annex to the ITA.
2
Paragraph 3 provides that parties shall meet periodi cally "to review the product coverage specified in
the attachments with the view to agreeing, by co nsensus, whether in the light of technological
developments, experience in applyi ng the tariffs concessions, or changes to the HS nomenclature, the
Attachments should be modified to incorporate additional products".
6. The EC has also stated that "the inclusion of a new product must be negotiated; it cannot be
assumed to be covered by the concessions just becau se it happens to also perform similar functions as
a product that is covered by the concessions. And this negotiation procedure is precisely what the

1 Singapore's third party written submission, para. 8.
2 Turkey's third party written submission, paras. 6 - 8.

ITA foresees explicitly." It appears that the EC's position is that any technological change in a
covered product gives rise to the requirement to agree by consensus to positively add that "new"
product to the coverage of the ITA. This approach is contrary to the aim of the ITA, which notes that
although the parties wanted to "encourage technologi cal development", they specifically declared that
"each party's trade regime should evolve in a manner that enhances market access opportunities for
information technology products". If other WTO Memb ers and the Panel were to adopt the approach
suggested by the EC, the number of products that would benefit from duty-free treatment pursuant to
ITA obligations would steadily decrease in the light of the rapid technological developments that
occur in the field of information technology. As Singapore notes, the ITA did not envisage
continuous negotiations to keep the IT pr oducts it covered free from duties as and when a
technological development occurred.
3
7. Thus, mindful of the fact that negotiators were fully aware that there would be rapid
technological developments in this sector, Costa Rica considers that it would be more appropriate to
interpret the negotiation procedure envisaged in pa ragraph 3 as referring to the procedures to include
brand new products under the covera ge of the ITA. Turkey itself notes that the paragraph 3 provides
procedures for the incorporation of additional products and that, in other words, the Attachments
cannot be modified to "exclude" any of the listed products.4
8. Costa Rica considers that as long as a product is listed in Attachment A or B to the ITA, it
must be given duty-free treatment. To exclude su ch products from ITA covera ge would be contrary
to the object and purpose of the ITA which, as noted by the Philippines, is to expand world trade in
information technology products to the maximum extent possible. 5 Paragraph 3 thus contemplates
procedures by which products may be added to, not excluded from, ITA coverage.
III. WHETHER ADDITIONAL FEATURES OR FUNCTIONALITIES OF A PRODUCT
DISQUALIFY THAT PRODUCT FROM RECEIVING DUTY-FREE TREATMENT
UNDER THE EC SCHEDULE BASED ON THE ITA?
9. The complainants submit that the products at issue in this dispute (multifunctional machines
(MFMs), flat panel display devices (FPDs) and set-top boxes that have a communication function
(STBs)) must be accorded duty-free treatment by the EC as provided for in its Schedule of
Concessions and pursuant to its obligations undertaken in the ITA. The EC responds that the products
at issue fall "within the scope of other concessions included in the EC Schedule, which do not provide
for duty free treatment". The interpretative issue for this Panel, therefore, is to determine the proper
product scope of the tariff concessions at issue.
10. With respect to flat-panel display devices, the issue is whether they fall within the definition
of "flat panel display devices (including LCD, Electro Luminescence, Plasma, Vacuum-Fluorescence
and other technologies) for products falling within this agreement, and parts thereof" provided in
Attachment B of the ITA. The EC argues that a unit must be "solely or principally used in an
automatic data-processing system" and therefore must be for exclusive use with an ADP machine in
order to be classified as a flat-panel display devi ce under 8471. Turkey further notes that flat panel
display devices which incorporate digital visual in terface or high-definition multimedia interface are
able to be connected to certain consumer elect ronic products as well information technology products
falling within the ITA. Turkey thus concludes th at a flat-panel display device which is a dual-use

3 Singapore's third party written submission, para. 16.
4 Turkey's third party written submission, para. 12.
5 Phillipnes' third party written submission, para. 16.

product does not fall under the existing ITA.
6 The task of the Panel is not to determine whether a
product is capable of performing various functions, but rather to determine the scope of the tariff
concession and whether the product at issue meets the basic criteria to fall under that tariff concession,
regardless of whether that product performs additional functions.
11. With respect to set-top boxes, Turkey has stat ed that "set-top boxes ... having the function of
processing and/or recording and transmitting input to televisions, monitors or other similar devices,
should be regarded as consumer electronic products." Turkey is thus of the view that the primary
purpose of these set-top boxes is to interact with television broadcasts, and their information exchange
features are secondary, and therefore, these products do not fall within the scope of the existing ITA. 7
Costa Rica considers that Panel's task is not to determine the primary or secondary function of a
product, but rather to determine the scope of th e tariff concession and whether the characteristics of
the product correspond to the description set out in that tariff concession, regardless of whether that
function constitutes the primary or secondary purpose of the product.
12. In summary, in Costa Rica's view, as long as a product meets the minimum requirements to
fall within Attachment A or Attachment B to the ITA, it must be given duty-free treatment, even
though it may have additional technological features or different functions.
IV. CONCLUSION
13. Mr. Chairman, Members of the Panel, to conclude, Costa Rica wishes to highlight that this
case raises important questions with respect to th e interpretation of a Member's tariff concessions
pursuant to the ITA and the tariff treatment to be acco rded to such products. As a developing country
with a strong interest in expanding its informati on technology sector, Costa Rica considers that such
tariff concessions must be interpreted, consistently with the Vienna Convention, in such a manner as
to give effect to the aim of the ITA that "each party's trade regime should evolve in a manner that
enhances market access opportunities."
14. The participation in the ITA has brought treme ndous economic benefits to Costa Rica and to
other developing countries. It is of critical importance to Costa Rica and to other developing
countries that the commitments that WTO Members assumed, pursuant to the ITA, are interpreted in a
manner that enhances, rather than limits, international trade in the information technology sector.
15. Costa Rica thanks the Panel for the opportunity to present this oral statement.

6 Turkey's third party written submission, paras. 35 – 37.
7 Turkey's third party written submission, para. 38 – 39.

ANNEX E-6

ORAL STATEMENT BY HONG KONG, CHINA
AT THE FIRST SUBSTANTIVE MEETING

1. Hong Kong, China welcomes the opportunity to participate and present its views as a third
party before this Panel.
2. This is the first WTO dispute concerning the Information Technology Agreement (ITA")
1.
Hong Kong, China has a strong systemic interest in the proper interpretation and effective operation
of the ITA, of which Hong Kong, China is one of the first 14 signatories. In addition, it has trade
interests in some of the information technology produ cts subject to this dispute. We would therefore
like to make a brief statement of our views on some of the important issues in this dispute.
3. As provided in its preamble, the ITA aims to achieve maximum freedom of world trade in
information technology products and to encourage the continued technological development of the
information technology industry on a world-wide basis. The ITA also stipulates that each participant's
trade regime should evolve in a manner that enhances market access opportunities for information
technology products. Hong Kong, China considers th at such object and purpose must be taken into
account in interpreting the participants' commitmen ts under the ITA, which have been transformed
into commitments under the respective schedules of tariff concessions of the participants, as in the
case of the European Communities ("EC").
4. Undoubtedly, the ITA has played a vital role in enhancing market access opportunities for
information technology products since its implemen tation in 1997 and has resulted in tremendous
expansion of world trade in information technol ogy products. The products covered by the ITA as
listed in Attachments A and B are, in our view, ve ry broad, but clear. In particular, Attachment B
provides a wide scope of product coverage, namely, "a positive list of speci fic products covered by
the ITA wherever they are classified in the Harmonized System". For products covered under the
ITA, they should be accorded zero-tariff treatment without any restriction. In other words, the
participants' domestic customs classifications or re classifications of such products should not affect
the product coverage under the ITA.
5. Hong Kong, China generally supports the Co mplainants' arguments and agrees that the
information technology products con cerned in this dispute, i.e. flat panel displays, set-top boxes
which have a communication functi on and multifunctional digital ma chines, should all be covered
under the ITA and entitled to duty-free treatment, as committed by the EC in its schedule of
concessions pursuant to the ITA. In this connection, Hong Kong, China submits that the Panel should
determine the scope of the EC's tariff concessi ons commitments and/or the product coverage under
the ITA by applying Articles 31 and 32 of the Vienna Convention on the Law of Treaties. Having
regard to the ordinary meaning of the product descr iptions in their context and in the light of the
object and purpose of the ITA and the schedule of concession of the EC, Hong Kong, China is
convinced that the Panel will come to the same conclusion as submitted by the Complainants.
6. Hong Kong, China is unable to accept the EC's argument on "differences between the product
existing at the time of the conclusion of the IT A and the product of today which is under dispute,"
ostensibly for justifying its reclassifications and consequential tariff treatment for information
technology products under dispute. The EC further argued that any "new products" that did not exist

1 The Ministerial Declaration on Trade in Information Technology Products concluded at the Singapore
Ministerial Conference on 13 December 1996 is known as the Information Technology Agreement.

at the time of signing the ITA are not covered by the ITA and must be negotiated. Such an argument
implies that the ITA is static and merely covers information technology products which existed in
1996. However, information technology products by their nature keep enhancing, developing and
evolving, and such continued technological developm ent is indeed encouraged under the ITA. Hong
Kong, China considers that the EC's argumen t ignores the "enhancement", "development" and
"evolvement" aspects of the ITA and cannot stand in light of the object and purpose of the ITA. In
our view, technology-sophisticated and functions-a dded information technology products are clearly
contemplated and covered under the ITA. A restri ctive interpretation as suggested by the EC would
result in an absurd situation that while technol ogy develops, the number of products benefiting from
the market access opportunities pursuant to the ITA diminishes and is not commensurate with the
growth in information technology products. Such an approach will no doubt undermine the benefits
accrued to the participants of the ITA and will rende r the ITA meaningless in th e near future. Hong
Kong, China therefore submits that the Panel should reject the argument of the EC in this respect.
1. Conclusion
7. In view of the aforesaid, Hong Kong, China r espectfully submits that the Panel should uphold
the Complainants' claim and find that the measures imposed by the EC on the 3 subject categories of
information technology products are inconsistent wi th its commitments pursuant to the ITA and its
obligations under Articles II:1(a) and II:1(b) of the GATT 1994.
8. Mr. Chairman, Hong Kong, China hopes that its views will assist the Panel in its
consideration of this dispute. Thank you for your attention, and once again, for the opportunity to
appear before this Panel.

ANNEX E-7

ORAL STATEMENT BY INDIA
AT THE FIRST SUBSTANTIVE MEETING

1. India welcomes this opportunity to present its views in these proceedings.
2. The present dispute concerns the treatment of three products under ITA having certain
features. The complainants viz. the US, Japan and Separate Customs Terr itory of Taiwan, Penghu,
Kinmen and Matsu have made deta iled submissions as to why these products are required to be given
duty-free treatment by the EC in terms of ITA. Th e EC has furnished exhaustive counter arguments
in support of their contention that the products do not merit such treatment in all situations. The EC
has also stated that the duty-free treatment cannot be extended to all variants of the products.
3. I am not entering into the details of rival submissions, nor am I going to comment on their
respective merits. We are sure the Panel will do that . The facts of the case will have to be analyzed
in detail and proper conclusion drawn with a view to ensuring that the rights of ITA Members are not
adversely affected as a result of any improper interpretation of the scope of ITA. In this dispute, India
has joined as third party because we do have some syst emic concerns. We believe this dispute is of
importance to other WTO Members as well because of the systemic and commercial interest.
4. We fully recognize the need to support and fost er technological innovation and improvement.
We also recognize that IT is an area where su ch innovation is the fastest, and products become
obsolete in a short period of time. It is thus a valid objective that all benefits of trade agreements
concerning such products are fully available during the life of the products concerned. However, on
the other hand, the product coverage envisaged und er any trade agreement is an equally important
aspect. Therefore while debating the issue of app licability of preferential tariff treatment for IT
products, one needs to take on board both these critical issues of fostering technological
improvements and sticking to the mandated product coverage.
5. Mr. Chairman, the convergence of information technology and consumer electronics has led
to emergence of "new" products. However, in the present dispute, given the intricacies involved and
the facts at hand, it is difficult to say whether the three products at issue are actually new products or
products that are evolved forms of what was include d in the ITA due to improvements in technology.
If the products are indeed new, not covered by ITA, their inclusion will have to be negotiated. In fact,
the ITA does provide a negotiating procedure to in clude additional products. Paragraph 3 of the
Annex to the 1996 Ministerial Declaration states that "participants shall meet periodically….to review
the product coverage specified in the Attachments… ..to incorporate additional products." Therefore,
to the extent that any ITA participant wants to include additional products under the ITA, the same
will have to be done through negotiations.
6. We understand, EC's schedule, like any other WT O Member, is an integral part of the WTO
Agreement and, interpretation of this treaty should follow the rules provided in Article 31 and 32 of
the Vienna Convention on Law of Treaties as they embody the "customary rules of public
international law" within the meaning of Article 3.2 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes, in determin ing the precise meaning and scope of the language
in the EC’s schedule, including individual tariff headings. Article 31 of the Vienna Convention
contains the interpretative elements of ordinary meaning, context and object and purpose. However,
Article 31 neither directs an interpreter to give mo re weight to certain element, nor does it impose a
hierarchical approach in terms of interpretative value of the elements for the purpose of interpretation.

In our view these interpretative elements are of equal interpretative value and neither element is
dispositive.
7. Mr. Chairman, it is true that the Ministerial Declaration talks about trade regimes of
participants being evolved "in a manner that e nhances market access opportunities for IT products".
But then, the duty-free treatment can be accorded only if the products fall within the remit of Annex
and the Attachments thereto of the said Declaration. From a perusal of submissions of the
complainants, it is seen that their claims for duty -free treatment are basically on the ground that the
products at issue are squarely covered by the Att achments A and B of the Annex to the Ministerial
Declaration. This is crucial as in the WTO, Me mbers obligation to provide a particular tariff
treatment is not open ended but finite. The list of goods as agreed to in the Annex and the
Attachments of the ITA in 1996 has to be the basis for determining the tariff treatment due to these
products. We, therefore, support the view that cl assification of a product will have to be decided
based upon the objective characteristics and technical parameters.
8. While deliberating on this issue, it is equally im portant to dwell on the principles enshrined in
the Harmonized System (HS) classification. The HS classification is determined according to the
terms of the headings and any relative Section or Chapter notes. When this is not possible and the
goods are classifiable under two or more headings , the heading which provides the most specific
description is preferred to headings providing a more general description. Composite goods made up
of different components are classified as if they consist of the material or component which gives
them their essential character. When the goods cannot be classified by adopting the above principles,
they are classified under the heading which occurs last in numerical order among those which equally
merit consideration.
9. Mr. Chairman, We are confident that the Panel w ill consider all relevant facts and take a view
on classification and duty treatment in the light of what is contained in ITA and relevant HS rules.

ANNEX E-8

EXECUTIVE SUMMARY OF THE
THIRD PARTY SUBMISSION BY KOREA

1. In this submission, Korea wishes to highlight certain legal and interpretive questions for
which the Panel could provide an important guidance for future dis putes in the ITA covered product.
Korea also comments on what it considers to be th e appropriate interpretative methodology for this
dispute.
2. After conclusion of the ITA, the participati ng Members in the ITA revised their respective
tariff commitments for certain technology products through formal modification of their Schedules of
tariff concessions. It is those Schedules of tariff c oncessions that bind those participating Members.
Thus, Korea believes that this dispute is to be r esolved by "accurately and correctly" interpreting the
commitments made by the EC, as set out in its Schedule of tariff concessions.
3. The EC revised its Schedule in two ways pursua nt to the ITA: (a) it modified the tariff
commitments made in a number of headings and sub- headings of its Schedule; and, (b) it added to its
Schedule a headnote and an ensuing list of products derived from Attachment B to the ITA. In
Korea's view, the Panel's interpre tative methodology in this dispute should begin with the terms of
this headnote and the list of products following that headnote ("the headnote product list").
4. Regardless of the specific heading or sub-heading under which a particular product falls in the
EC Schedule, a product included in the headnote pr oduct list which is derived from the corresponding
ITA list, is entitled to duty-free treatment. Therefor e, if a particular product is covered by the
headnote product list, it would appear that the EC is required to grant that product duty-free treatment,
"wherever the product is classified". In this regard , the list of HS headings attached next to each
product cannot reasonably have the meaning that the EC attempts to ascribe to it, because this
interpretation would render the phrase " wherever the product is classified ", a phrase expressly stated
in the EC's Schedule, simply ineffective and meaningless.
5. In Korea's view, given the "wherever the produc t is classified" language, what is controlling
in this analysis should be the narrative product descr iption in the headnote product list, that is, the
phrase "wherever . . . classified". In contrast, by all ac counts the HS headings next to the product
descriptions appear to be illustrative, rather than exhaustive or controlling. Korea would welcome the
Panel's thorough analysis and reliable guidance on the interpretative approach of this treaty language.
6. As to interpreting the product descriptions in the headnote product list, the Panel should apply
the general rules of treaty interpretation, as embodied in Articles 31 and 32 of the Vienna Convention.

In applying these rules, the Panel should examine th e ordinary meaning of the terms, read in their
context and in light of the object and purpose of those terms, as well as of the treaty as a whole. In
examining the ordinary meaning of the terms, part icular product descriptions may need to be given a
"special meaning", pursuant to Article 31.4 of the Vienna Convention, because the terms found in the
EC Schedule are overwhelmingly "technical" and appear in a "specialized" sector of goods trade,
namely, information technology products.
7. Furthermore, Korea considers that it is not entirely clear what the precise products and
product models are at issue in this dispute. In Korea's view, the present dispute does not involve "as
applied" measures, where the particular product/produ ct model at issue and the facts surrounding that
product would be relatively clear. Rather, this dispute apparently involves "as such" measures
regarding the tariff treatment of three broad pr oduct categories. Korea recalls that, under well-

established WTO principles, it is for the complainan ts to make a prima facie case that, in some
instances at least, the respondent's "as such" m easures necessarily violate the respondent's WTO
obligations.

ANNEX E-9

EXECUTIVE SUMMARY OF THE
THIRD PARTY SUBMISSION BY THE PHILIPPINES

I. INTRODUCTION
1. The Philippines provided the Panel with its views in this dispute, in which the United States,
Japan and Chinese Taipei claim that the tariff tr eatment the EC and its Member States accord to
certain information technology pr oducts do not reflect the EC commitments to provide duty-free
treatment for these products under the WTO Information Technology Agreement.
2. It will be recalled that in 1996, the "Ministerial Declaration on Trade in Information
Technology Products" (or the "Information Technolog y Agreement," or "ITA") was adopted and the
signatories committed to grant duty-free treatment to th e products covered in that Declaration. Rate
reductions were to take effect in equal steps starting no later than 1 July 1997 and ending no later than
1 January 2000.
3. As an ITA participant, the EC modified its Schedule to reflect the commitments made under
the ITA. Such modifications became effective on 2 July 1997. Accordingly, the EC and its Member
States must apply duty-free treatment on a number of products, including, inter alia , flat panel
displays ("FPDs"), set-top boxes ("STBs") with a communication function, and certain "input or
output units" of "automatic data processing machines" and facsimile machines ("MFMs").
4. However, as a result of certain EC measures, the EC and its member States apply customs
duties on the aforementioned products, specifically, a 14% duty on Flat Panel Displays (FPDs) ,
13.9% and 14% duties on Set Top Boxes (STBs) , and a 6% duty on Multifunctional Machines
(MFMs).
II. PHILIPPINE VIEWS ON THE EC TARIFF TREATMENT OF FLAT PANEL
DISPLAYS, SET TOP BOXES, AND MULTIFUNCTIONAL MACHINES
5. The Philippines agrees that pursuant to Article 31(1) of the Vienna Convention on the Law of
Treaties, a treaty must be interpreted in the light of its object and purpose. Furthermore, as underlined
by the panel in EC – Chicken Cuts (Brazil) , the relevant aspects of the WTO Agreement and the
GATT 1994 provide that concessions made by WTO Me mbers should be interpreted so as to further
the general objective of the expansion of trade in goods and the substantial reduction of tariffs.
6. In this respect, it is clear from the Preamble and text of the ITA that the manifest object and
purpose of the ITA is to expand world trade in IT pr oducts to the maximum extent possible by way of
eliminating customs duties as well as any other duties and charges. Interpretations such as the one
advocated by the EC do not conform to the ITA's obj ect and purpose. In particular, an interpretation
that would result in excluding from the EC concessi ons certain IT products will be contrary to the
objective of substantial reduction of tariffs th rough reciprocal and mutually advantageous
arrangements.
7. Article II:1(a) of the GATT 1994 contains a general prohibition of according treatment less
favourable to imports of products from the other contracting parties than that provided for in a WTO
Member's schedule. Article II:1(b) prohibits a sp ecific kind of practice that is inconsistent with
paragraph (a), that is, the app lication of ordinary customs duti es in excess of those set forth and
provided in the schedule.

8. The Philippines submitted that the EC and its Me mber States accord, through the measures at
issue, treatment to the products at issue that is less favourable than that provided for in the EC
Schedule. Specifically, the EC currently imposes a 14% duty on Flat Panel Displays (FPDs) , 13.9%
and 14% duties on Set Top Boxes (STBs) , and a 6% duty on Multifunctional Machines (MFMs)
instead of applying duty-free treatment on the sai d Information Technology products as provided for
in the EC Schedule. For certain FPDs, the EC also makes the granting of a zero tariff upon
importation subject to terms, cond itions and qualifications not set fo rth in the EC Schedule. The
Philippines submits that there was no justification for the new EC classification and the EC thus
violates its obligations under Articles II:1(a) and (b) of the GATT 1994.
9. In addition, with respect to STBs, the Philippines submitted that the EC and its member States
acted inconsistently with their obligations under Articles X:1 and X:2 of the GATT 1994 by failing to
promptly publish EC classification-related regula tions and by applying duties prior to their
publication.
III. CONCLUSION
10. The Philippines agrees with the claims of the United States, Japan and Chinese Taipei that the
measures of the European Communities and its Member States concerning flat panel displays, set top
boxes with a communication function, and multif unctional machines are inconsistent with
Articles II:1(a) and II:1(b) of GATT 1994. Furthermor e, we agree that the EC measures concerning
set top boxes with a communication function are also inconsistent with Articles X:1 and X:2 of
GATT 1994.

ANNEX E-10

EXECUTIVE SUMMARY OF THE ORAL STATEMENT
BY THE PHILIPPINES AT THE FIRST SUBSTANTIVE MEETING

I. INTRODUCTION
1. The Philippines noted that in view of the en abling nature of information technology, it has
rightfully become an important priority for many members of the global trading system. It
underscored its strong interest in the correct in terpretation and application of the EC's ITA
commitments, as it is currently ranked as the 10
th largest ITA supplier to the European Union with
Total EU imports of ITA produc ts at $223 billion in 2005, and the Philippines accounting for
$5.4 billion of that amount. The Philippines fully endorsed the presentations made by the three
complaining Members.
II. GENERAL CONSIDERATIONS
2. Noting Article II:1(a) and II:1(b) of the GATT 1994, the Philippines submitted that the
central element in this dispute is whether the EC has in fact collected duties in excess of those set
forth in the EC Schedule, and that the key issue revolves around the misapplication or non-application
by the EC of their tariff commitments and concessions as scheduled.
3. As the concessions contained in the EC Schedule are integral parts of the WTO Agreement
pursuant to GATT 1994 Article II (7), the Philippines posited that th ese concessions are part and
parcel of the language of the c overed agreements whose meaning mu st abide by the customary rules
of treaty interpretation. As established in WTO jurisprudence, Articles 31 and 32 of the Vienna
Convention on the Law of Treaties ("Vienna Convention") codify "customary rules of interpretation
of public international law" within the meaning of Article 3.2 of the DSU. These provisions thus
comprise the legal framework within which any inte rpretative exercise of language contained in the
WTO covered agreements must take place.
4. The Philippines stated that a key question in th is dispute is whether or not the EC measures
have resulted in an undue limitation of the scope of their concessions and a derogation of rights of the
members affected by such measures. The Panel is , as such, not concerned with the question whether
the classification adopted by the EC is correct or not , but rather, what is important is that the tariff
which results and is in the end applied because of such classification decision, was in fact the correct
and legally binding tariff under the Agreement and the EC Schedule, which was and is an integral part
of the Agreement. In this regard, customs classification rules and practice in the domestic setting may
certainly be helpful but can never be decisive for the above analysis.
5. The Philippines believed that interpretations such as the one advocated by the EC do not
conform to the ordinary meaning of, nor the object and purpose, of their concessions and are not
faithful to the Agreement entered into and committed to by the EC.
III. ON FPDS
6. The Philippines posited that the Panel will have to determine the scope of the EC concessions
on FPDs, which were in accordance with Attachments A and B of the ITA. The question at issue is
whether FPDs with certain other technological features or connectors, such as a DVI that enables the
FPD to receive signals both from an ADP machine and from other sources, would preclude them from
duty-free treatment as granted by the EC Schedule.

7. The Philippines argued that the EC cannot limit the scope of the FPDs covered by the
concession to those that can only be used with an ADP machine. As the European Court of Justice
held in the Kamino case, the EC position on this matter "cannot be accepted" and would be
tantamount to altering the EC's own rules on what could qualify as a flat panel display.
8. This view is further confirmed by the language of other concessions made by the EC pursuant
to the ITA, and can be demonstrated by the EC's until 2004.
9. The Philippines argued that the principal unanswered question is how and why the EC opted
to impose the particularly higher tariff of 14% fro m the category heading of reception apparatus for
television; video monitors from heading 8528.2190 despite no showing of any easily intelligible basis
or common reasoning that would lead an ordinary person to consider what is in essence a flat panel
display to become now not a flat panel display and rather a video monitor.
IV. ON STBS
10. In regard to set-top boxes (STBs) with a communication function, the Philippines argued that
in conducting its assessment, the Panel should take into consid eration and draw appropriate
conclusions from the head-note in the EC's Schedule . This head-note is self-explanatory: customs
duties on STBs which have a communication function – a product contained in Attachment B to the
ITA – must be granted duty-free treatment, wherever such STBs are classified.
11. The Philippines drew attention to the clear and ordinary meaning of the text of the
concession. It covers STBs with any
 type of communication function. And the Philippines could not
agree with the EC that technology, with its new functionality, has created a fundamentally and
objectively changed product.
12. Again an examination of the EC schedule fails to justify in any ordinary meaning or layman
approach why a STB with some improved feature suddenly is not a set top box, but is now classifiable
as a video tuner or video recorder related item.
13. In addition, and still with respect to STBs, th e Philippines also believes that the EC and its
Member States acted in a manner that was patently contrary to Articles X:1 and X:2 of GATT 1994,
by failing to promptly publish their measures and by implementing the measures before publication.
The Philippines urged the Panel not to exercise judicial economy on the claims relating to Article X of
GATT 1994 because of the grave systemic and legal implications of the matter.
V. ON MFMS
14. The Philippines submitted that the MFMs at i ssue fall within the scope of the concessions
made by the EC with respect to subheadings HS 8471.60, 9009.1100 and 8517.21.00 for which the
EC committed to grant duty-free treatment. There is no reasonable basis to glean from the schedule
how an MFM originally with zero duty became dutiable under CN 9009.1200 or 8443.3191, as a
result of its having improved in efficiency and productivity.
15. On the second category of MFMs under HS subheading 8517.21.00 "facsimile machines," the
Philippines submitted that there is a broad meanin g to "facsimile machine" as confirmed by the
factual context. The term "photocopy" thus does not cover the reproduction of originals by printing or
transmitting a previously scanned data file as it is done by MFMs. And the number of pages these 2
separate functions, i.e. facsimile and photocopy, are able to pe rform are not determinative or
definitive, as the main objective in either ca se is to do as efficiently as possible the task.

ANNEX E-11

EXECUTIVE SUMMARY OF THE THIRD PARTY
SUBMISSION BY SINGAPORE

I. INTRODUCTION
1. The European Communities (EC) is a participan t to the Ministerial Declaration on Trade in
Information Technology Products (ITA) and has co mmitted to eliminate customs duties on products
covered by the ITA.
2. The EC has however adopted measures with resp ect to flat panel displays (FPDs), set top
boxes which have a communication function (STBCs ) and multi-functional machines (MFMs) that
deny at least some of these products tariff-free treatment, ev en though the products fall under the
coverage of the ITA. These measures are clearly in violation of the EC's commitments under the ITA
and the General Agreement on Tariffs and Trade 1994 (GATT 1994).
II. AN ASSESSMENT OF THE EC'S CONTESTED MEASURES
A. H
ORIZONTAL REMARKS
1. The nature of the dispute
3. This is not a case about the classification or tariff treatment of new products as such, but how
to treat ITA products that have technologically de veloped. The EC's approach is essentially that
whenever a new functionality is added to a produ ct covered by the ITA, the product risks being
excluded from the ITA. This approach is overly r estrictive and runs counter to the ITA's object and
purpose.
2. The nature of the EC's commitments
4. The meaning to be given to the product defi nitions included in Attachment B cannot be
circumscribed by the tariff headings which the EC has added in its Schedule of Concessions. The
language of the ITA is clear: Attachment B represents a positive list of specific products to be covered
by this agreement wherever they are classified in the Harmonized System (HS).
3. The requirements of an "as such" claim
5. In order to substantiate an "as such" claim, it is not necessary to show that the contested
measures always lead to a violation of the EC's commitments under the ITA. Rather, it is sufficient to
show that at least in some respects the contested measures necessarily lead to such a violation.
4. The impact of the EC's duty suspension
6. As regards the suspension of import duties by the EC over some FPDs, this does not
regularise a WTO-inconsistent measure. A WTO member is by definition free to lift the suspension
of a WTO-inconsistent measure.

B. FPD
S
7. The exclusion of any FPD (whi ch would otherwise satisfy the ITA) merely because it has a
DVI connection is a violation of the EC's ITA commitments.
1. Attachment A
8. Singapore agrees that FPDs constitute "output units" and notes that some FPDs may also
constitute "input units" e.g. touch screen monitors.
9. The ECJ's judgment in Kamino, and the Opinion of Advocate General Mengozzi that
preceded it, both confirm that EC customs officials apply the "solely or principally threshold"
incorrectly towards FPDs fitted with DVI.
2. Attachment B
10. To the extent that an FPD is "for" a product covered by the ITA, such as a computer or an
STBC, it is properly covered by Attachment B.
11. In fact, DVI functionality best enables FPDs to display the digital output of computers. FPDs
with DVI functionality are thus properly covered by Attachment B.
3. The EC concedes as such violation of FPD-related measures
12. The EC's first written submission effectively concedes that, in the light of the Kamino
judgment, its Explanatory Notes to the Combined Nomenclature (CNEN) necessarily leads to a
violation of the EC's ITA commitments in respect of at least some FPDs. The EC's indication that it
may amend the contested CNEN is no defence to an "as such" violation.
C. STB
S
13. There is nothing in the ITA that precludes an STBC fro m ITA coverage simply because it has
a recording function. The EC's measures do so and are therefore in violation of its ITA commitments.
14. The EC's tariff treatment of STBCs with a record ing function is also inconsistent with its own
laws. The definition of a "simple set-top box" in EC Regulation 107/2009 (on ecodesign
requirements for certain STBs) contemplates that a simple STB can be equipped with recording
functions.
15. Further, the European Commission estimates that the most basic forms of STBs will be
equipped with hard disks by 2012. By treating STBCs with recording function as falling outside the
ITA, the EC would, in effect, render the ITA concessions on STBCs meaningless in a few years.
D. MFMS
16. The EC's measures to exclude from tariff-free treatm ent, MFMs that are classifiable as either
"input or output" units (within sub heading 8471 60) or "facsimile machines" (within sub heading
8517 21) under Attachment A of the ITA, are in violation of its ITA commitments.

1. Computer MFMs
17. MFMs with a digital connection to a computer mu st be classified within heading 8471 if they
satisfy the conditions under Note 5(B) to Chapter 84 of the HS, namely that they: (i) are of a kind
"solely or principally" used with a computer; (ii) are connectable to a computer CPU; and (iii) are able
to send or receive data in a recognised computer language.
18. The ECJ's judgment in Kip, and the opinion by Advocate General Mengozzi that preceded it,
indicate that most computer MFMs will be principally used with a computer and should be classified
within heading 8471.
19. Even if there has to be recourse to HS General Rule 3, the application of General Rule 3(b)
would lead to the majority of computer MFMs being classified as printers as the printing functionality
represents that component of computer MFMs that gives them their "essential character".
2. Non-computer MFMs
20. The ordinary meaning, whether as defined by the complainants or the EC, of "facsimile
machine" and "photocopying apparatus" do not co ntemplate output limitations. The 12 page per
minute output limitation placed by the EC on non-computer MFMs is arbitrary and does not accord
with the ordinary meaning to be given to these terms.
21. Singapore submits that most non-computer MFMs can come under heading 8517, which
broadly covers "electrical apparatus for line tele phony", and specifically under subheading 8517 21,
which covers "facsimile machines", based on the ordinary meaning of the terms of those headings.
22. Even if there has to be recourse to HS General Rule 3, the application of General Rule 3(b)
would result in most non-computer MFMs being classified as facsimile machines as the facsimile
functionality represents that component of non-co mputer MFMs which gives them their "essential
character".
3. The EC concedes as such violation of MFM-related measures
23. The EC's first written submission concedes that in the light of the criteria enounced by the
ECJ in the Kip case, there may be computer MFMs in which the copying function must be deemed
secondary and which should, therefore, be accorded duty-free treatment. By the EC's own admission,
its measures necessarily lead to a violation of the EC 's ITA commitments in respect of at least some
MFMs. The EC's indication that it is "currently examining this matter with the assistance of the
Customs Code Committee" is no defence to an "as such" violation.
III. CONCLUSION ON THE ITA AND ITS OBJECTIVES
24. Singapore submits that the EC's contested measures necessarily lead to duty treatment of
FPDs, STBCs and MFMs that is inconsistent with the EC's tariff commitments undertaken pursuant to
the ITA and violate WTO law, notably Article II GATT 1994, as such.
25. Singapore notes that this dispute can have far-re aching implications for trade in information
technology (IT) products and the IT industry. The ITA aims to encourage innovation and trade in IT
products. The interpretation of the ITA that Singa pore calls upon the panel to uphold is consistent
with its legal text and aspirations.

ANNEX E-12

EXECUTIVE SUMMARY OF THE ORAL STATEMENT
BY SINGAPORE AT THE FIRST SUBSTANTIVE MEETING

I. INTRODUCTION
1. Singapore will start with some general points. First
, Singapore does not seek an overly broad
or inclusive construction of ITA commitments; what it opposes are the EC's overly restrictive
interpretations of them. Second , Singapore agrees that any extension of product coverage should be
through negotiation but here, we are dealing with pr oducts that are and remain covered by the ITA.
This case is not about new products, but about the treatment of products that are already included in
the ITA but which have developed new functionalities. Third , the products covered pursuant to
Attachment B of the ITA cannot be circumscribed or "exhausted" by the tariff headings in the EC's
Schedule of Tariff Concessions giving effect to the ITA ("EC Schedule") – the headnote in the
Schedule makes it clear that the list and the tariff h eadings which follow are not exhaustive. Finally ,
to show that the EC's measures are inconsistent w ith its commitments, it suffices that the measures
necessarily result in the EC imposing duties on at least some products which must be given tariff-free
treatment; and this is the case for all three products in issue.
II. FLAT PANEL DISPLAYS ("FPDS")
2. Singapore's primary objection is to the EC excluding FPDs from tariff-free treatment so long
as they have a DVI feature. FPDs are covered by both Attachment A and Attachment B of the ITA
and the EC Schedule.
3. With respect to FPDs covered by HS 8471 60 by virtue of Attachment A, nowhere do the HS
notes to that heading state that FPDs with DVIs must be excluded. It would not make sense to so
exclude when it is precisely DVI that enables computer data to be better displayed. The inconsistency
of the EC's measures is underscored by the ECJ judgment in the Kamino case. In light of this case,
the EC has effectively conceded in its first written submission that its measures violate its
commitments in respect of at least some FPDs. Its attempt to salvage the situation by stating that the
presence of a DVI feature is but one of the criteri a to be considered ignores the wordings in its
measures.
4. The EC's measures on FPDs are also inconsistent with its tariff concessions giving effect to
Attachment B, specifically under "flat panel displays … for products falling within this agreement".
The EC's attempt to argue that "for" ITA products means "only for" ITA products is to read the
limiting word "only" into the ITA wh en that word is not there. Ev en if it is assumed that CRT and
non-CRT TVs are not covered by the ITA, the EC is not allowed to arbitrarily exclude an FPD simply
because it has a DVI feature without looking at the produc t as a whole to see if it is indeed a TV or an
FPD for a computer system.
5. The EC's suspension of its measures does not cu re the inconsistency. Tariff-free treatment
means no imposition of duties, not the temporary halting of duties. The suspension is also limited to
certain FPDs, and tariffs continue to be levied for other FPDs that are entitled to tariff-free treatment.
III. SET TOP BOXES ("STBS")
6. Singapore objects to the EC's measures which tr eat STBs as "video recording or reproducing
apparatus", just because they can pe rform a recording or reproducing fu nction. This is inconsistent

with the EC's concession giving effect to Attachme nt B of the ITA to accord tariff-free treatment to:
"set top boxes which have a communication function…".
7. First
, there is nothing in the text of Attachment B or the EC's Schedule that makes the absence
of a recording or reproducing function a condition for tariff-free treatment. Second, the simplistic and
sweeping approach taken by the EC to treat an ST B as a video recorder by virtue of the added
functionality is similar to its approach for FPDs, and is erroneous for the same reasons. Third , the
EC's treatment of STBs is inconsistent with its own recent regulation concerning so-called ecodesign
requirements for STBs, which recognises that STBs ca n have recording functions without losing their
character as STBs.
IV. MULTI-FUNCTIONAL MACHINES ("MFMS")
8. Singapore's position is that many MFMs would fall under Attachment A of the ITA – under
subheadings 8471 60 (for computer MFMs) or 8517 21 (for non-computer MFMs).
9. As regards computer MFMs, Singapore concurs w ith the approach taken by the ECJ and by
the Advocate General of that court in the Kip case. First, many MFMs capable of being connected to
a computer would be used "solely or principally" with computers and are therefore input or output
units. Second
, if an MFM is used solely or principally with computers, it must ipso facto be classified
as an input or output unit under subheading 8471 60. Third, Kip does not give rise to any presumption
against classification of an MFM such that a com puter MFM cannot be classified under subheading
8471 60 unless it is shown that the copying function is " secondary". It is necessary to make an
objective assessment of the characteristics of the pr oduct in issue, instead of relying only on the
existence of a copying function or co pying speed as the criterion. Fourth , even if the copying and
computing functions were found to be of equal impor tance, one cannot jump to GIR 3(c) without first
applying GIR 3(b) to determine what the "essen tial characteristic" of the product is. Fifth , the EC
appears to concede in its written submission that in light of Kip, its current regime is not fully
consistent with its WTO obligations.
10. The same approach should be taken for non-com puter MFMs which have a fax function. A
proper assessment according to the objective characteristics of the products must be made to
determine if they should be regarded as fax ma chines falling within subheading 8517 21. The
machines' copying speed may be one of the relevant factors in making this assessment but it cannot be
the only or decisive factor. The EC's approach, which is to regard the copying function as primary or
equivalent to the fax function, simply on account of their having an electrostatic print engine and a
copying speed of more than 12 pages per minute, is wholly arbitrary.

ANNEX E-13

ORAL STATEMENT BY THAILAND
AT THE FIRST SUBSTANTIVE MEETING

1. Mr. Chair and Members of the Panel. Thailand appreciates the opportunity to present its
views to the Panel today. As a signatory of th e Information Technology Agreement ("ITA") and an
exporter of the products at issue, Thailand has both a systemic and substantive interest in ensuring that
other signatories abide by their ITA tariff commitments. Trade benefits accruing under the ITA play a
significant role in Thailand's development: ITA products account for approximately 15 per cent of
Thailand's global exports per year, with an annual value of approximately US$28 billion. The EC's
interpretation of its ITA commitments, if a dopted, would harm producers by limiting trade in
information technology products, a nd we support the arguments made by the United States, Japan,
and Chinese Taipei in their respective written s ubmissions. In light of the complainants'
comprehensive arguments, we will present just a few points this evening.
2. At the outset, Thailand would like to recall that the ITA is at its core a "tariff-cutting
mechanism."
1 This is set out in the ITA preamble, which recognizes as one of its goals " expanding
the production of and trade in goods." 2 The ITA also specifically provides that any changes in a
signatory's treatment of covered prod ucts "should evolve in a manner that enhances market access
opportunities."3 To this end, Thailand endorses the United States' view that ITA participants
"contemplated a positive evolution in market access, not the steady narrowing of duty-free treatment"
such as that imposed by the Eur opean Communities as a result of the measures at issue in this
dispute.4 We also share the expansive views of the ITA as expressed by Chinese Taipei and Japan.5
3. The expansive and trade-liberalizing object and purpose of the ITA should inform the Panel's
interpretation of the EC's tariff commitments in this dispute. These commitments are set out in
paragraph 2 of the ITA, which requires parties to "bind and eliminate customs duties and other duties
and charges of any kind, within the meaning of Article II:1(b) of the GATT 1994" with respect to
covered products. In this regard, Thailand supports the complainants' position that the EC is obligated
to provide duty-free treatment to STBs, FPDs, and MFMs. The EC's commitments for these products
are thus straightforward: the aforementioned produc ts form part of the EC's ITA commitments to
provide duty-free treatment under Attachment A, B, or both; the EC modified its Schedule of
Concessions by incorporating these ITA commitments; and consequently, these commitments are part
of the EC's obligations under Article II:1(a) and (b) of the GATT 1994.
6
4. That the EC's measures at issue 7 impose import duties on STBs, FPDs, and MFMs, when the
EC is bound to provide these products with duty -free treatment, is in Thailand's view clearly
inconsistent with the EC's oblig ations under GATT Article II:1(a), which obligates the EC to provide
treatment that is "no less favourable than that provi ded for in the appropriate part of the appropriate

1 WTO ITA: Introduction, http://www.wto.org/english/tratop_e/inftec_e/itaintro_e.htm ("The ITA is
solely a tariff cutting mechanism").
3 ITA, Article 1 (emphasis added).
4United States' first written submission, 5 March 2009, para. 28.
5 Chinese Taipei's first written submission, 5 March 2009, para. 27 (stating that the object and purpose
of the ITA is to "expand and enhance trade in IT products"), and Japan's first written submission, para. 46
(describing how the ITA seeks to "create and preserve market access for the covered technology products, not to
create temporary duty reductions that would disappear over time").
6 See United States' first written submission, paras. 31-32.
7 As set out in Chinese Taipei's first written submission,, paras. 66-121.

Schedule." The EC's measures are also inconsiste nt with its obligation under GATT Article II:1(b),
which requires that scheduled products "be exempt from ordinary customs duties in excess of those
set forth and provided therein." We note that, like several other Members, Thailand is particularly
concerned about the EC's tariff treatment of the products at issue, in the circumstances of this case. In
other words, the EC must abide by its tariff co mmitments and provide duty-free treatment for the
products at issue. We hope, like the complainants, that the Panel also reaches this conclusion.
5. On that note, Mr. Chair, we would like to end our statement. Once again, Thailand thanks the
Panel for this opportunity to present our views.

ANNEX E-14

EXECUTIVE SUMMARY OF THE
THIRD PARTY SUBMISSION BY TURKEY

I. INTRODUCTION
1. Turkey believes that the issues subject to complaint by Japan, the United States and the
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu have to be analyzed with a view
to ensure that the rights of the Members of th e Ministerial Declaration on Trade in Information
Technology Products (hereinafter referred to as "ITA") are not adversely affected.
2. While not taking a final position on the facts of th is case, Turkey considers that this dispute is
related to the scope of the ITA.
II. INFORMATION TECHNOLOGY AGREEMENT
3. Ministerial Declaration on Trade in Info rmation Technology Products was signed in
13 December 1996 by 14 Members of the World Tr ade Organization (WTO), including Turkey as a
signatory party.
4. In order to expand the product coverage of the ITA, parties have to follow the procedures set
forth in the Paragraph 3 of the Annex to the IT A. Paragraph 3 reflects the common understanding of
the parties regarding the modification of product coverage of the Agreement.
5. However, Turkey considers that ITA Members ha ve not been able to put into practice the
provisions of the Paragraph 3 so far. Hence, th ere has been no formal modification on any of the
Attachments. Turkey is of the opinion that Paragr aph 3 (and also Paragraph 5) of the Annex of the
ITA can hardly yield satisfactory results unless some amendments are put into effect.
6. On 15 September 2008, the European Co mmunities submitted a document (Document
Symbol is G/IT/W/28 and TN/MA/W/107) to the attention of the Committee of Participants on the
Expansion of Trade in Information Technolog y Products and the Negotiating Group on Market
Access proposing to negotiate the ITA with the purpose of an update.
7. Turkey considers that re-negotiation of the ITA may well be an avenue to pursue when taking
into account the current Doha Round conditions. Th e need for the revision of the Attached Lists
arises, inter alia , from the fast evolving nature of in formation technology products, doubts on the
classification of a group of products, and the failure to reflect changes made to HS classification in
2002 and 2007.
III. ASSESSMENTS CONCERNING THE COMPLAINANTS CLAIMS
8. Turkey notes that flat panel display devices wh ich incorporate digital visual interface (DVI)
are not only able to produce output from informati on technology products falling within the ITA, but
also from consumer electronics products havi ng DVI or HDMI (High-Definition Multimedia
Interface) interfaces.
9. Turkey shares the view that "Televisions and other monitors or display units able to receive
and process television signals or other analogue or digitally processed audio or video signals
with the
assistance of or directly from another product other than the central processing unit of a computer are

explicitly excluded from the scope of the commitments to eliminate customs duties on certain
products."
1 Turkey considers that flat panel di splay devices which are dual use products do not fall
under the existing Information Technology Agreement.
10. Since the receiving, watching and recording of television broadcasts are the primary purposes
of use for these set top boxes, access to internet and interactive information exchange features must be
regarded as secondary and to be of limited use. Turkey is of the view that set top boxes of this kind
do not fall under the scope of the existing ITA.
IV. CONCLUSIONS
11. Turkey considers that contrary to the claims of the complainants, the products at issue do not
fall under the current Information Technology Agre ement. Any technologically newly developed
product which has multi-usage that may partially inco rporated by the Attachments of the ITA (mainly
Attachment B cannot automatically be considered as covered by the ITA.
12. Turkey requests this Panel to review the claims taking into account observations and
comments stated in this submission. On the ot her hand, the litigation process should not diminish
Members' rights beyond obligations undertaken at the time of the signing of the ITA. Turkey reserves
its right to make further comments at the third pa rty session of the first substantive meeting with the
Panel.

1 Economic Communities' first written submission, para. 132.

ANNEX E-15

ORAL STATEMENT BY TURKEY
AT THE FIRST SUBSTANTIVE MEETING

1. I am glad to present you with the views of Tu rkey at this stage of the panel proceedings
regarding the complaint launched by Chinese Taipei , Japan and the United States of America. I will
summarize Turkish position on the subject, to the extent possible, by refraining from repetition of
details presented in our written submission.
2. To begin with, I would like to state here that Tu rkey is a signatory party of the "Ministerial
Declaration on Trade in Information Technolog y Products (ITA)" from the time it was signed in
13 December 1996 by 14 Members of the World Trad e Organization (WTO). Turkey still shares the
view that information technology makes positive contribution to global economic growth and welfare.
3. Based on the panel establishment requests submitted by the complainants, products subject to
complaint in this panel are called Flat Pane l Displays (FPDs), Set-Top Boxes (STBs) and
Multifunctional Digital Machines (MTMs).
4. Complainants submit that the European Comm unities imposes customs duties of about 14%
on FPDs and STBs, and 6% on MTMs, while the EC is under obligation to grant duty-free tariff rate
for these products as required by its schedule of commitments resulting from the ITA.
5. Turkey finds it necessary to point out shortly the following issues relating to the products at
issue, so as to underline the fact that tariff commitments under ITA are being applied.
6. Monitors pertaining to goods falling under IT A have been accorded duty free access courtesy
of headings 8528.41.00 and 8528.51.00.
7. STBs embedded with the following attributes should be designated as STBs being accorded
with the concessions offered by ITA: being microprocessor-based, incorporating a modem for
accessing the internet, having a function of inter active information exchange. STBs housing all
definitional elements, vividly cited in the agreem ent, are classified under the heading 8528.71.13,
which accords duty free access.
8. MFMs are granted duty free access under the heading 8443.31.10. However, those that are
incorporated with copying function as its pr imary attribute will be dutiable under the
heading 8443.31.91.
9. Turkey believes that this dispute has occu rred thanks to the rapid development and
convergence in "consumer electronics" and "infor mation technology" products. Most consumer
electronics products, like televisions, are not covere d by the ITA. On the other hand, with the
addition of certain features that was not foreseen at the time of signing of the ITA, producers created
products that can operate either e.g. as an information technology product or as a TV. Likewise, some
STBs and MTMs gained such quality and producer s of these devices have sought duty-free access to
markets under the ITA.
10. Complainants and some third parties insist that products that can be used as an information
technology or as an ordinary electronics device must be granted zero tariff rate. However, they fail to
explain how for example an FPD that can also be used as a television fall under ITA. Accepting this
logic simply means granting zero tariff for televisions, which are not covered by the ITA.

11. Moreover, the importation of multi-use products with zero tariff rates granted under ITA
concesssions may also constitute a form of "circumvention" of customs obligations.
12. Article 3.2 of the DSU provides that "Recommendations and rulings of the DSB cannot add to
or diminish the rights and obligations provided in the covered agreements." Our view is that, if
accepted, complainants' claims will serve to add to the obligations of many signatory parties of the
ITA by expanding the product coverage of the Agreement, without resorting to ITA Annex Article 3.
13. In order to find an effective solution to the current disagreement, as stated in our written
submission, complaining parties should consider ne gotiation and update of the ITA product coverage,
and parties should devise a feasible mechanism to replace Article 3 of the ITA Annex.
14. Turkey also considers that views expressed by Ko rea with regard to the legal basis of this
dispute are worth mentioning. In its third party written submission, Korea states that the ITA is not
among the agreements annexed to the WTO Agreemen t and is not one of the "covered agreements"
within the meaning of Appendix 1 of the DSU.
1 Korea also quotes the following expression from the
Panel Report US – Lead and Bismuth II : "the Ministerial Declaration is a mere 'Declaration', rather
than a 'Decision' of the Ministers. In our view , a Declaration lacks the mandatory authority of a
Decision."2 Korea further argues that "the ITA partic ipants revised their tariff commitments for
certain technology products through formal modifica tion of their Schedules of tariff concessions" and
that "It is these revised tariff commitments that govern the WTO market access obligations of each
ITA participant with respect to the products concerned."3
15. With this approach, it occurs that the ITA is not even a Ministerial Decision and thus it is not
binding. If this Ministerial Declaration is not bi nding then the question as to how Signatories are
bound with its Annexes or other obligations arises. As a result, Turkey is of the view that the Panel
should consider clarifying the legal basis of this dispute taking into consideration Korea's approach.
16. Turkey wishes to thank the Panel for the opportunity to submit its views during this hearing.