U.S. revokes duties on laptop computer screens Move clears way for Japanese imports

June 23, 1993|By New York Times News Service

WASHINGTON -- Caught in the awkward position of fostering one high-technology industry at the expense of another, the Commerce Department has revoked import duties on advanced screens that are used in laptop computers and other equipment.

In its decision, announced late Monday, the department brushed aside the protests of a handful of fledgling U.S. companies, which argued that import duties were crucial to developing a domestic advanced-screen industry.

Flat-panel displays that are capable of producing vivid colors and detailed images are central components in notebook computers and are expected to be used heavily in high-definition television systems.

The import duties are 63 percent and have been assessed on screens manufactured outside the United States, mostly by the Japanese.

Industry experts and government officials have long feared that the United States' weakness in advanced displays will harm the nation's overall ability to compete.

But U.S. computer companies like Apple, Compaq and IBM have opposed the import tariffs, arguing that the duties inflate the cost of their products, harm their own ability to compete abroad and force them to shift production to other countries.

The issue of so-called active matrix liquid-crystal displays highlighted the dilemmas that often arise in government attempts to foster commercial technologies. The Pentagon has spent several hundred million dollars over the last decade on advanced display technologies, and it is now preparing to award several big contracts in a bid to energize the U.S. players.

But the import duties on active matrix displays, first imposed in February 1991, have sparked widespread criticism even from experts who support government efforts to foster key commercial technologies.

The Commerce Department concluded that the penalties had outlived their usefulness and based its decision on a reversal in position by the only U.S. company that now makes such displays, OIS Optical Imaging Systems Inc. of Troy, Mich.

OIS had demanded relief under the nation's anti-dumping laws but changed its position last fall and asked that the penalties be lifted.

"OIS was not realistically an alternative for manufacturers of laptop computers," Charles C. Wilson, executive vice president and chief financial officer of OIS, said. "We could not meet their needs, even if we wanted to. So the question was, should these penalties be imposed on the American computer industry."

But the Commerce Department refused to consider the views of several companies that are now conducting research on active matrix displays and hope to enter the market.

These companies, which lacked legal standing because they were not actually producers of active-matrix displays, included Standish Industries of Lake Mills, Wis., and Planar Systems of Beaverton, Ore.

These companies said their ability to attract capital could be jeopardized if the tariffs were lifted, and that the growth of the United States flat-panel industry would be stifled.

"We're disappointed that the decision was made in the absence of clear, cohesive policy from the Clinton administration," said Charles Hoke, chief executive of Standish.

But several of the biggest aspiring players in flat-panel displays have quietly sided with the government. Xerox Corp. and American Telephone & Telegraph Co. are partners with Standish in the U.S. Display Consortium, and neither of those companies favored a continuation of the import duties.

Outside experts have also supported the decision to change policy. A report this month by the Council of Competitiveness, a nonprofit group supported by high-technology companies, concluded that the trade penalties on active matrix displays had done at least as much harm as good.

"The anti-dumping law may be too blunt an instrument to deal adequately with the complexities of technology-intensive industries," it noted.

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