Abstract
After the increase of the customs duty on CD players, the European Community electronics industry went for protection of some essential products. French state-owned Thomson demanded support for such actions in exchange for its alleged cooperation in CD duty increase. The reasons for protective action diverged among company strategies. Major European producers tried to hide their interests. Legally, the basis for safeguard measures sought for video recorders and audio equipment was insufficient. Therefore, other methods were devised. The customs tariff on VCR – and DVD –increased in accordance with the General Agreement on Tariffs and Trade (GATT) rules, which are explained. Through a new interpretation of a customs rule on VCR mechanisms, these mecadecks were temporarily protected with a higher duty. In accordance with formal GATT rules for trade negotiations and with tariff reduction formulae, the European industry succeeded in excluding some vital products from general tariff reductions. A re-classification and a higher tariff on camera recorders failed due to betrayal of agreed policies. An effort to use the enlargement of the European Community under a new interpretation of the GATT rules for higher audio duties failed. This implied the end of mass audio production and closure of factories in Europe by major producers, and it marked a start of decline of the industry in general.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
This 21-pin SCART plug or Euroconnector – a means of connection of the television with peripheral equipment – was mandatory and imposed in France in 1980. According to information from French electronics industry, initial intention was that its compulsorily introduction would take place in 1978. No television set without this connector could be sold in France. Max Grundig heavily protested – both in France and at Philips’ headquarters, which latter did not have a hand in this tactic – against this French ploy to stop unwelcome competition, but nevertheless hastily introduced televisions with SCART facility into trade, taking back sets without SCART connection. When it appeared that Thomson and Philips France had substantial stocks of sets without SCART plug, the introduction was delayed by more than one year. Consequently, Grundig and others ran into serious costs because of this scheme.
- 2.
This was rather a stupid strategy. Customs duties on monochrome televisions and picture tubes were exempted, while the products with a big market potential in the future were decreased. It would have been better to decrease the tariff on monochrome television and radio to “save” the duty on several other items, like amplifiers, loudspeakers and other important audio and video equipment as separate components and some video equipment.
- 3.
In 1987, the company DUAL in the Black Forest was reduced to a small factory and in 1987 Thomson sold it again.
- 4.
The Permanent Mission of Japan pre-empted such new initiatives at GATT by an intervention on 7 July 1983. See below.
- 5.
Mark 1993: “Tariff concessions granted in negotiations with one member are automatically extended to all GATT members. Once a tariff concession is made on a particular item, that item is “bound” against any increase above the agreed level. A contracting party is committed not to impose duties or other charges that would tend to undercut such concessions.”
- 6.
CEO of Thomson’s consumer electronics division, Jacques Fayard, was uninterested, and Thomson’s vice-president for external relations, who came from France’s diplomatic service, was not acquainted with trade rules concerned.
- 7.
General Agreement on Tariffs and Trade Application of Article XXVIII to new products, L/5522 11 July 1983, communication from the Permanent Mission of Japan, dated 7 July 1983.
- 8.
Measures must be reported to GATT.
- 9.
COM REGULATION (EEC) No 2684/88 of 26 August 1988 imposing a provisional anti-dumping duty on certain imports of video cassette recorders originating in Japan and the Republic of Korea; OJ L 240, 31.8.1988, pp. 5–17.
- 10.
Com (85) 349 final, Brussels, 27 June 1985.
- 11.
6 August 1985, Secret/312 + addendum.
- 12.
The document, Secret/317 + Add.1, submitted on 12 August 1985, indicated imports of ECU 3,044,106.
- 13.
He moved to another directorate-general and was suspected to have leaked information on the anti-dumping file on CD players.
- 14.
The 1984 GATT “Panel on Japanese Measures on Imports of Leather”, (L/5623 – 31S/94) adopted on 15/16 May 1984.
- 15.
The leather trade row between Japan and the European Union surfaced again in 1996, when the European Commission began to exert pressure on Japan to increase imports from Europe by modifying the tariff quota system. The European Union apparently made the move at the prodding of such major leather-exporting union members as France, Italy and Spain. This was especially pressing because Japan attacked continuously the European Community as Fortress Europe because of the intention of the European Community to create one single market by 1992 lifted the residual quotas maintained by member states toward Japan, whereas Japan rigorously maintained its residual restrictions.
- 16.
Belassa and Noland 1988, p. 54.
- 17.
Industriemagazin, Munich, September 1987, 59–67.
- 18.
Judgment of the Court (First Chamber) of 13 December 1994. GoldStar Europe GmbH v Hauptzollamt Ludwigshafen, Case C-401/93.
- 19.
In the period in which the discussion took place, the Combined Nomenclature of the European Community was not based yet on the Harmonised System of the Customs Cooperation Council, which entered into force on 1 January 1988. When the issue of mechanical decks was discussed, the heading for VCRs was 92.11 B. Discussions in the Customs Directorate of the European Commission usually took place in French, discussion about a product with the heading “quatre-vingt-douze onze” is not easy for non-French speakers (is it 4-20-12-11 or 80-12-11 or 92-11?).
- 20.
Commission Regulation (EEC) No 2275/88 of 25 July 1988 concerning the classification of certain goods in the combined nomenclature, Official Journal L 200, 26/07/1988 pp. 10–12: “Mechanical assembly for a video recording or reproducing apparatus of CN code 8521, equipped with recording and reproducing heads (Mecadeck). // 8521 10 39 // Classification is determined by the provisions of general rules 1, 2 (a) and 6 and the texts of CN codes 8521, 8521 10 and 8521 10 39. This mechanical assembly presents the essential characteristics of a video recording or reproducing apparatus.”
- 21.
By Commission Regulation (EEC) No 3085/91 of 21 October 1991 amending Commission Regulation (EEC) No 2275/88 of 25 July 1988.
- 22.
By Council Regulation (EEC) No 3330/85 of 5 December 1985 amending Regulation (EEC) No 950/68 on the Common Customs Tariff, Official Journal L330/1 of 9 December 1985.
- 23.
OJ C83/47 of 30.3.2010.
References
Belassa BA, Noland MI (1988) Japan in the world economy. Institute for International Economics, Washington, DC
Mark C (1993) CD dictionary & CD glossary, the language of international trade: a handbook of concepts & terms. Institute for Trade and Commercial Diplomacy, www.commercialdiplomacy.org/dictionaries
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2014 Springer International Publishing Switzerland
About this chapter
Cite this chapter
van Marion, M. (2014). Meeting the Challenge: Blind Alley of New Protection. In: International Trade Policy and European Industry. Contributions to Economics. Springer, Heidelberg. https://doi.org/10.1007/978-3-319-00392-4_5
Download citation
DOI: https://doi.org/10.1007/978-3-319-00392-4_5
Published:
Publisher Name: Springer, Heidelberg
Print ISBN: 978-3-319-00391-7
Online ISBN: 978-3-319-00392-4
eBook Packages: Business and EconomicsEconomics and Finance (R0)