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EUROPEAN
SEMICONDUCTOR
INDUSTRY
ASSOCIATION

With its complex manufacturing process, global supply chains and markets, the semiconductor industry is a genuinely globalised sector. During the semiconductor manufacturing process, a microchip usually travels across the globe at least twice before being delivered to its final customer. Therefore, fast international movement of products, people and equipment is essential to the semiconductor business.

The semiconductor industry has an interest in facilitating growth by advocating free and open markets and by eliminating tariff and non-tariff barriers for all semiconductor products (including advanced semiconductors such as Multi-Component ICs (MCOs).

The International Trade Committee coordinates the above-mentioned activites.

Export Control

Many semiconductors industry products and technologies - at the front of new markets and innovations - are classified as dual-use. They include commercial applications which are widely available such as smart cards. The classification under dual use implies the necessity of obtaining export licenses, creating additional administrative burdens with the risk that customers buy foreign available products.

Every type of semiconductor product/application can be impacted, in particular semiconductor products with cryptographic capabilities (banking, transport, mobile communications, but also computer, set top boxes using smartcards, etc.)

Customs Classification

Duty rates, scope and application of international agreements, such as the Information Technology Agreement (ITA), trade remedies, statistics, they all need a common understanding on how a good is identified worldwide, ensuring that what are "apples" in one country are not "oranges" in another: this tool is given by international customs classifications.

As international trade becomes more complex, international customs classifications are becoming the main multi-purpose tool to help governments and industry for fiscal and regulatory compliance. Semiconductor products are evolving everyday with technology, and customs classifications are not revised as often to catch the new products in the right category, or to catch them at all. Classification revisions ensure that the classifications are kept up to date in the light of changes in technology or in patterns of international trade.

The International Trade Committee is working pro-actively to ensure that classification revisions capture correctly the new products on the market, or give input where an interpretation of the related heading is required.

Information Security

International trade and modern communications rely more and more on information exchanged in digital form. Consequently the development and the ubiquity of information technology has driven the commercial demand for privacy and security (protection from theft or unauthorized access) with encryption as one of the primary means to achieve this.

The use of encryption has become widespread in many commercial applications, being incorporated in most semiconductor devices intended for end-use in mass market and information infrastructure products. As a result, the great majority of encryption applications involve every day commercial products commonly used and traded in the global marketplace.

ESIA believes that encryption regulations shall not be used for the purpose of limiting market access to foreign products and considers that commercila products with cryptographic capabilities which are, or will be widely available and deployed, should, as a general matter, not be regulated.

To the extent that encryption regulation is necessary, ESIA and the WSC recommend the following best practices:

Modernisation of Union Customs Code

An important factor for the competitiveness of European semiconductor industry is a highly automated supply chain with low administration and handling costs and short transit times. In this context, the reform of the European Customs system is in process and ESIA delivers input as a participant in the Trade Contact Group. This latter is a consultative body composed by industries and the European Commission (DG TAXUD).

Rules of Origin

All goods traded need to have a determined origin: for statistical reasons, trade measures (antidumping, anti-subsidies measures, preferential treatment). “Rules of origin” (RoO) are the criteria used to define where a product was made.

The International Trade Committee works in two areas:

  • Harmonisation working programmes of non preferential RoO within WTO
    Non preferential RoO are used when no tariff preferences are involved and therefore mainly for statistical purposes, as we always want trade figures to tell us who our trading partners are. However, they are also used when other trade measures need to specify a particular non-tariff treatment for goods from a particular country. For example, this is the case of anti-dumping duties or trade embargos. With non-preferential rules of origin there is always a country of origin that can be established. ESIA closely follows developments of the non-preferential Rules of Origin Harmonised work programme (HWP) at WTO.
  • Reform of preferential origin regimes for the EU
    Preferential origin is conferred on goods from particular countries, which have fulfilled certain criteria allowing preferential rates of duty to be claimed. Preferential Rules have very specific conditions that need to be met, as what matters is from which particular country a good originates.

Chair

Peter Proebster - Infineon Technologies

 

September 2014: ESIA joins the ITA Global Statement

April 2014: ESIA position paper on the EU-Japan FTA negotiations

April 2014: How ITA Expansion Benefits the Chinese and Global Economies

November 2013: EU industry joint letter on ITA expansion

November 2013: EU-Japan Summit - Joint statement by 20 business organisatins

July 2013: Global Industry calls for Swift and Ambitious Expansion of the ITA

July 2013: Global Industry calls for Expansion of the ITA - Letter to Vice Premier of RP China

June 2013: Position Paper - EU-US Transantlantic Trade and Investement Partnership (TTIP)

May 2013: WCS calls for Expansion of the ITA - Letter to WTO Permenant Missions of ITA members

February 2013: ESIA position on Non-Preferential Rules of Origin in the framework of the Union Customs Code

November 2012: Statement - EU-Japan Free Trade Agreement

June 2011: Commission Sector fiche - EU Trade in Electronics