Report on trade problems for European IT companies entering US

The report provides an update on all major obstacles that EU companies face when exporting and investing in the US. It also draws attention to persisting US unilateral and extraterritorial legislation, abusive use of US trade policy instruments and export subsidies. There are also many differences in the legal and regulatory systems, leading to non-tariff barriers.

The European Commission said yesterday that it has been very active and is determined to defend the rights of EU companies with its market access strategy, also using the Trade Barrier Regulation and dispute settlement in the World Trade Organisation (WTO) when warranted. The EU has currently 11 cases against the US in the WTO.

In a statement issued yesterday, the Commission said it is attaching the utmost importance to the emerging sectors and in particular information technologies.

“European and foreign-owned firms seeking access to the US market for communication services still face considerable barriers, particularly in the satellite services and the mobile services sectors. This situation is not in line with the market access policy advocated by the US, and provides a competitive advantage to the significant number of US companies that have already access to the European market in these fields. Furthermore, the Commission has identified a number of US laws and policies on internet and electronic commerce which could impact negatively on the business of European companies, particularly in the fields of Internet domain names and cybersquatting, encryption and patentability of software and business methods.

“The Commission is firmly committed to address the barriers listed in the report, and further brought to its attention, these through the appropriate instruments."

In the report the Commission expressed its reserves about the impact of last November's US Anticybersquatting Consumer Protection Act on the uniform dispute resolution system being implemented by the Internet Corporation for Assigned Names and Numbers (ICANN) and the World Intellectual Property Organisation (WIPO). The Commission re-affirmed its support to such a worldwide uniform system as it sees this as beneficial to the whole internet community, and argues that it should be allowed to work through to some results and evaluation rather than being pre-empted by national legislation.

The Commission also expressed concerns about the US regime on encryption, considering that "a combination of the continuing constraints on the export of strong encryption products and on the interoperability of systems employing such technology inhibits not only trade in encryption products but, more importantly, the effective growth of electronic commerce. Moreover, many modern encryption techniques are patented and licenses may be required to allow sales of European products in the US. Thus, significant barriers to international trade in encryption products without key recovery continue to exist."