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International Trade Policy and European Industry the Case of the Electronics Business Contributions to Economics Contributions to Economics Marcel van Marion International Trade Policy and European Industry The Case of the Electronics Business Contributions to Economics For further volumes: http://www.springer.com/series/1262 . Marcel van Marion International Trade Policy and European Industry The Case of the Electronics Business Marcel van Marion Eindhoven Netherlands ISSN 1431-1933 ISBN 978-3-319-00391-7 ISBN 978-3-319-00392-4 (eBook) DOI 10.1007/978-3-319-00392-4 Springer Cham Heidelberg New York Dordrecht London Library of Congress Control Number: 2013941991 © Springer International Publishing Switzerland 2014 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts in connection with reviews or scholarly analysis or material supplied specifically for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work. Duplication of this publication or parts thereof is permitted only under the provisions of the Copyright Law of the Publisher’s location, in its current version, and permission for use must always be obtained from Springer. Permissions for use may be obtained through RightsLink at the Copyright Clearance Center. Violations are liable to prosecution under the respective Copyright Law. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. While the advice and information in this book are believed to be true and accurate at the date of publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for any errors or omissions that may be made. The publisher makes no warranty, express or implied, with respect to the material contained herein. Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com) Preface The writing of this book was initiated by the understanding that many developments in the electronics business have remained unexplained or will be forgotten. An account of practical experience related to trade policy and trade policy rules may also be lost. Some sectors of European business have disappeared. That would not be a disaster if ignoring some facts would not cause repeated catastrophes. According to the rules of probability, such disasters do not occur twice at the same spot. This may be correct. Almost 25 years of practice in the electronics business, with Philips Electronics, and in the boards of industry associations plus an additional period as a private trade policy counsellor rendered me experience in the use of trade policy instruments. This book is a report on my experiences in this domain. Often it describes adventures that have gone astray in the jungle of rules and politics. It describes victories and defeats in the arena of international economic relations. Defeats have truncated the industry and reduced the need for trade policy representation. I thank many people at Philips for giving me the opportunity to be at the centre of many events of international relations. Members of the board of Philips Electronics entrusted me with some interesting, even fascinating tasks. Extremely important were those amazingly few members of the staff of Philips’ Bureau for International Economic Relations who contributed to some of the episodes sketched on the pages hereafter. I would like to mention Karine Hustinx, Diny Janssen, Casper Garos, Wicko van Haalen, Frank Smits and Andre´ Rhoen, brilliant and dedicated people, who made a formidable contribution to the advance- ment of the international relations of Philips and the industry. Companion in arms, Henri Anus, former de´le´gue´ ge´ne´ral of the French Simavelec, offered his friendship and fine cooperation in the many years that I worked on behalf of the European electronics industry and provided me with some supplementary documents used in this book. I am grateful to Edwin Vermulst, this worthy opponent in various anti-dumping cases, gifted with an exceptional knowledge – causing envy – of international trade law, for his encouraging remarks and particularly for the intellectually stimulating v vi Preface discussions over the years, although we often found ourselves on different sides of the fence. Frits Bolkestein earns my lasting gratitude for his friendship and encouragement during important stages of my career. Showing her intellectual grasp of the matters described in the book and thanks to her quick mind and efficiency, Maegan McCann has made an invaluable contribu- tion by editing and polishing texts that needed improvement. I thank her for it. And last but not least, and in contrast to the Windhundverfahren in export licensing – first come, first served, as described in Sect. 3.3 of this book – I express my gratitude to my dear wife Anja, who gave a solid base to the project and has patiently waited until the completion of this book, encouraging me and requesting to be prudent in the texts, probably knowing that she asked for the impossible. June 2013 Marcel van Marion Abbreviations ADA Anti-Dumping Agreement, Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ALARM Association for Legal Auto Radio Measures, Temporary European Association of Car Audio Producers ANIE Associazone Nazionale Italiano dell’ Industrie Elettrotecniche ed Elettroniche, Italian Electro Technical and Electronics Association BCG Boston Consulting Group Benelux Belgium Netherlands and Luxemburg (Economic Union) BREMA British Radio and Electronic Equipment Manufacturers’ Association BTS Broadcast Television Systems (a Bosch Philips Joint Ventrue) CAP Common Agricultural Policy CCC Community Customs Code CCC Customs Cooperation Council, predecessor of the WCO CFL-i Compact Fluorescence Lamps Integrated (Electronic) CIAJ Communications Industry Association of Japan; now: Communications and Information Network Association of Japan CIF Seller Must Pay the Costs, Insurance and Freight to Bring the Goods to the Port of Destination. CN Combined Nomenclature: Codes and Product Definitions for Common Customs Tariff and of the External Trade Statistics COP Cost of Production EACEM European Association of Consumer Electronics Manufacturerts ECSC European Coals and Steel Community EEC European Economic Community EECA European Electronic Components Manufacturers’ Association EFTA European Free Trade Area EIAJ Electronics Industry Association of Japan EPR Effective Rate of Protection ESL Energy Saving Lamp vii viii Abbreviations Fabrimetal Belgian Federation of Metal and Electrical Industry, Since 2000 Agoria FME Federation of Metal and Electrical Industry (in the Netherlands) FOB Free on Board: The Seller Must Load the Goods on Board the Vessel Nominated by the Buyer and Bear Costs Including Loading GATT General Agreement on Tariffs and Trade GEC General Electric Company Ltd, A UK Electronics Company HDTV High Definition Television Broadcasting System HiFi High Fidelity, Originally Meeting the Standard of Deutsche Industrie Normierung (DIN) 45500 HS Harmonized System: International Code and Tariff Nomenclature IC Integrated Circuit ITT International Telephone & Telegraph Corp., later ITT Corp., Electronics Conglomerate Broken Up in 1995 JMEA Japan Machinery Exporters’ Association (Private Branch of METI) JVC Victor Corporation of Japan, a Subsidiary of Panasonic LGE LG Electronics, Formerly Lucky GoldStar LoT Level of Trade Adjustment (the Addition to the CIF Value of Imported Products for Calculation of Resale Price) MES Market Economy Status MET Market Economy Treatment METI Ministry of Economy, Trade and Industry of Japan, Previously MITI MITI Ministry of International Trade and Industry (of Japan). In 2001: Ministry of Economy, Trade and Industry (METI) NEC Nippon Denki Kabushiki Gaisha, Nippon Electric Company, Limited NEDC National Economic Development Council (Advisory Council for Industry Development) (Neddy) NHK Nippon Hoso Kyokai, Japan Broadcasting Corporation NME Non-Market Economy NTSC National Television System Committee (of the USA) NTT Nippon Telephone and Telegraph Company OCT Ordinary Course of Trade OECD Organisation for Economic Co-operation and Development OEM Original Equipment Manufacturers, Traders with Own Production in the Sector OMA Orderly Market Agreement PAL Phase Alternating Line PCB Printed Circuit Board PCN Product Code Number (Code for a Product with the Specific Characteristics) Abbreviations ix PDO Philips DuPont Optical, a Joint Venture for Optical Media, (CD, DVD, Magneto-Optical Discs) POETIC Producers of European Televisions in Cooperation, Temporary Association of Television Producers PPF Plain Paper Fax QR Quantitative Restriction (Quota) RCA Radio Corporation of America RIC Radio Industry Council, a British Industry Platform RTC la Radiotechnique Compe´lec, Frenchpart of Philips Components Division SCAN Society of Coherent Anti-dumping Norms, Temporary European Association of CTV Producers SCART Syndicat des Constructeurs
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