OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
Executive Office of the President
Washington, D.C. 20508

USTR Press Releases are available on the USTR website at www.ustr.gov

For Immediate Release:
September 21, 2004
Contact:
USTR: Richard Mills / Neena Moorjani
(202) 395-3230


US Files WTO Case Against EU Over European Customs System

WASHINGTON - United States Trade Representative Robert B. Zoellick
announced that the United States today is filing a World Trade
Organization (WTO) case against the European Union regarding EU customs
laws and regulations.

At issue is the fact that many important aspects of customs
administration in the EU are handled differently by different member
State customs authorities, resulting in inconsistencies from State to
State. Although the EU is a customs union, there is no single EU
customs administration. Lack of uniformity, coupled with lack of
procedures for prompt EU-wide review, can hinder U.S. exports,
particularly for small to mid-size businesses.

"We will continue to work with the EU to try to resolve our concerns
over their customs administration," Zoellick said. "Today our exporters
face a common market with non-common customs practices. We hope that
the consultations we have requested today will help address some of the
problems faced by U.S. exporters, and in the process strengthen the
integration of the EU. We look forward to working with the new EU
Commission on these issues, which we recognize cross various
jurisdictional and bureaucratic boundaries. We hope there is an
opportunity to combine uniformity throughout the EU with Europe's effort
to integrate its ten new members."

WTO rules require WTO Members to administer their customs laws in a
uniform, impartial and reasonable manner. They also require Members to
provide tribunals for prompt review and correction of administrative
action relating to customs matters. The United States considers that
the EU fails to meet either of these requirements.

Variations in the way that goods are treated by the different EU member
States can cause problems that burden all traders. These problems are
compounded by an inability to obtain prompt EU-wide review of national
administrative decisions. An importer or other interested party has to
wend its way through national administrative and/or judicial appeals
before obtaining an authoritative determination from an EU-level
tribunal.

The first step in a WTO dispute is to request consultations. If the
consultations do not resolve the dispute, the countries that requested
consultations may seek the formation of a dispute settlement panel.
Dispute settlement procedures, including appeal, typically take about 18
months.

Background:

The lack of uniform customs administration by the EU affects U.S.
producers, farmers, and exporters in a number of important ways. For
example, goods may be classified differently and thus be subject to
different tariffs depending on the EU member State through which they
are imported. Similarly, a U.S. exporter may be able to obtain binding
guidance in one member State on how its goods will be valued for tariff
calculation purposes. But the exporter may not be able to rely on that
guidance in another member State; indeed in some member States the
exporter may not be able to obtain binding valuation guidance at all.

These problems fall particularly hard on small and mid-size businesses,
which often lack the resources to work their way through member State
and EU bureaucracies in order to reconcile inconsistencies in
classification or valuation in different States.

There are three reasons for requesting WTO consultations now. First,
the EU has just recently expanded from 15 member States to 25 member
States. The trade barrier inherent in lack of uniform customs
administration expanded when the new member States joined in May. As an
indicator of the level of trade potentially affected by this barrier, it
should be noted that U.S. goods exports to the EU-25 totaled $155.2
billion in 2003. By pressing this issue now, we hope to address this
problem early in the EU's process of dealing with the challenges of
enlargement.

Second, enhancing trade facilitation is a key part of the Doha
Development Agenda. The United States expects that pressing a major
player in world trade to administer its customs laws and regulations in
a uniform manner will help to advance that part of the agenda.

Third, over the past months we have tried to work with the Commission to
address the concerns of U.S. exporters. Although Commissioner Lamy and
his staff have tried to help with individual problems, it has become
clear that the allocation of authorities within the EU and even the
Commission has precluded achieving the necessary systemic solutions.

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