Meeting the Challenge: Blind Alley of New Protection

Marcel Marion

Chapter Chapter 5 in International Trade Policy and European Industry, 2014, pp 85-108 from Springer

Abstract: 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.

Keywords: Tariff Reduction; Custom Duty; European Industry; Article XXIV; Custom Tariff (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-3-319-00392-4_5

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DOI: 10.1007/978-3-319-00392-4_5

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