The request is an escalation in an increasingly bitter dispute over the WTO’s Information Technology Agreement (ITA), which abolished duties on a number of high-tech goods from July 1997 to encourage trade.

Starting in 2005, the European Union has reenacted tariffs on new versions of computer screens, multi-function printers and TV set-top boxes that access the Internet. The EU maintains they are now consumer products and not pure high-tech goods.

"We regret that formal consultations have not been successful in resolving our concerns over the duties that the EU is imposing on several high-tech products," U.S. Trade Representative Susan Schwab said in a statement.

"We believe that these duties are inconsistent with the EU’s commitments on these products, and that they discourage technological innovation in the IT sector," she said.

Japan and Taiwan joined the request for a panel in the dispute with the EU. The request will be reviewed by the WTO’s dispute settlement body on August 29. The EU will be able object but it cannot block a panel under WTO rules.

The U.S. estimates that worldwide exports of high-tech goods total more that $70 billion.  The U.S. said the EU was charging duties on products that did not exist at the time the ITA was created.

"In effect the EU is taxing innovation — a move that could impair continued technological development in the information technology industry and raise prices for millions of businesses and consumers," the U.S. said.
 

The decision will allow Antigua to take copyright-protected U.S. goods, like CDs and software and sell them without copyright protection. The value of the goods can total up to $21 million annually to compensate for the financial loss the country has suffered.

"This amount will remain in place until the US comes in compliance with the rulings and recommendations of the WTO’s Dispute Settlement Body, or until it reaches a mutually agreed settlement with Antigua and Barbuda under Article 21 of the GATS agreement," the government said.

The ruling estimated Antigua’s trade loss at $21 million, which is less than the country projected but more than the U.S. estimated. Antigua says it lost $3.4 billion and the U.S. said it would lose $500,000. The panel based the figure on compliance with U.S. law instead of actual loss estimates based on gaming prohibition.

Minister of Finance Dr. Errol Cort said the government had mixed feelings on the decision.

"Although we are pleased that the extraordinary sanction of the suspension of intellectual property rights protection for US interests has been given to us -only the second such authorization in WTO history -we are disappointed with the segment of the decision limiting our annual compensation to such a mere fraction of our industry’s lost revenues," Minister Cort said.

The minister said that the goal of the government was to negotiate a fair resolution of the dispute with the U.S.

"Despite the size of the award, the value of WTO-sanctioned suspension of intellectual property rights should not be underestimated. We think that this decision, as terribly flawed as it may be, should still have the desired result of getting the US to sit down with us and seek an amicable resolution to our disagreement."

"In this regard, we look forward to meeting with the US delegation in the very near future in an effort to have this matter fully resolved," the minister said.