1. & Draft presentation to JSTC
MCP & MCO work group
Regional report
& Draft presentation to JSTC
Merten Koolen
23 February 2011,
Shanghai, China
MCO experts meeting

2. JSTC MCO&MCP Work group Meeting Agenda February 23, 2011
Status update from each region
Reports could include:
Comments received from governments
Actions taken by associations since September 2010
Status of local discussions
Any other issues
Discussion of process/timeline towards 2011 GAMS
Issues
actions
Preparation of MCO Report to JSTC and confirmation of actions points
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3. Reports on regional status of MCO discussion - action items from Kobe-
Each association will assist GAMS to work out the practical details of the cooperation process among the GAMS and Customs authorities toward developing and finalizing a definition of MCO products by
providing more information to their Customs authorities on MCO issues and
informing other associations on the developments, both actions to be taken within the next month
Each association will facilitate cooperation between GAMS and Customs authorities. The associations will work together to develop common materials.
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4. Reports on regional status of MCO discussion: Europe (1)
September January 2011: clarification meetings with Authorities
24-25 January 2011: Informal GAMS Working Group on MCOs organised by USITC in Washington DC
Attended by Customs officials and GAMS representatives from five regions
Representatives from Semiconductor Industry Associations in Europe, the US and Japan participated in the meeting
Semiconductor Industry Associations in Europe and in the US presented on behalf of JSTC the MCO issue based on semiconductor industry technology trends and MCO applications
Outcome of the inter-government meeting: MCO non-paper
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5. Reports on regional status of MCO discussion: Europe (2)
the MCO non-paper by Informal GAMS Working Group on MCOs represents and advancement on the issue and the current status of reflections among Governments which attended the meeting
The process agreed by Customs at Informal GAMS WG meeting:
several points for clarification remain, a.o. indicated by bracketed text: Authorities seek industry guidance  MCO non-paper distributed to industry with eye to industry meeting in Shanghai
Future government calendar agreed by Customs authorities:  
By Feb 15: clean up the language as much as possible by mid February
By Feb 22: get more input from China both in the short term and after the industry workshop in Shanghai on February 22
By April 1: Customs incorporate the inputs received and give final document to the trade negotiators to take the next step.
Each association will need to review the non-paper.
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6. Reports on regional status of MCO discussion: Europe (3)
Words in brackets indicate specific areas for possible refinement or alternatives
Opportunity for constructive comments to facilitate progress
Each association to review the non-paper.
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7. Actions for 2011 GAMS meeting
2010 GAMS Summary:
[…] Based on the social contribution of semiconductors, GAMS underlined the
importance of facilitating the growth of the market for such semiconductor
products through zero duties on MCO with an appropriate definition that
captures these new trends. GAMS therefore invites its members to consult their
customs experts without delay to start to develop and finalize preferably before April
2011 a definition of what constitutes MCO products as was done for the MCP
definition, starting from the above proposal from the US and using appropriate
expertise from industry. GAMS agreed to work out the practical details within the
next month. Given the urgency to provide a growth oriented and predictable
framework for industry and based on the above intermediate timelines, GAMS
envisages to reach consensus on duty free treatment in its GAMS 2011 meeting.
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8. 3. Preparation of Report to JSTC and confirmation of actions points
(see separate draft)
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9. Back up
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10. Non Paper – 24 January 2011- informal GAMS MCO working group (1)
"This agreement covers [so-called] “multi-component integrated circuits"[, other than those of HS heading 8542 by virtue of Note 8 to Chapter 85 of the HS nomenclature,] falling under HS headings [8473, , , , [ ,] , [ ,] , , , , , , , , , 9026, , , , , [9032] and [HS 2012]].
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11. Non Paper – 24 January 2011- informal GAMS MCO working group (2)
In this context a "multi-component integrated circuit" is defined as a combination of one or more monolithic, hybrid and/or multichip integrated circuits with one or more of the following discrete components, but no other components:
-inductors, transformers, static convertors(?) of heading 8504;
-permanent (?) magnets of heading 8505;
-antennas of [sub]headings 8517[.70], 8529[.10] and 8543[.70];
-[8518];
-capacitors of heading 8532;
-resistors of heading 8533;
-[8534]; …
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12. Non Paper – 24 January 2011- informal GAMS MCO working group (3)
- diodes, transistors, and similar semiconductor devices; photosensitive semiconductor devices; light-emitting diodes; mounted piezo-electric crystals, all the foregoing of heading 8541;
-[lenses or other optical elements of heading 9001 or 9002;] [or]
-microelectromechanical systems (MEMS) of headings 8532, 8533, 8543, 8548, 9026 and 9031; [or] [MEMS are understood to be mechanical devices built on semiconductor chips using semiconductor fabrication technologies.] [are there any MEMS that are not built on semiconductor chips and that are traded separately?]
-[other semiconductor-based devices] interconnected and combined to all intents and purposes indivisibly into a single package [how big?] for assembly onto a printed circuit board [or other carrier]."
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13. MCP
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14. Issue summary MCP
In 2006 the Agreement on Duty-Free treatment of Multi-chip Integrated Circuits (MCPs) was concluded among the EC, the US, Japan, Korea and Chinese Taipei
This Agreement reduces to zero the rates of all customs duties and all other duties and charges applied by the signatories to the MCPs
Open item: expansion of geographic coverage to all GAMS and non-GAMS regions to increase benefits for for the industry
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15. 2010 GAMS Chair summary - MCP
“With respect to the MCP Agreement, GAMS noted that the WSC considers the accession of all current GAMS members to the MCP Agreement to be a matter of critical importance, also in view of attracting new membership countries. It also noted the substantial efforts made by industry to find an acceptable resolution. GAMS carefully considered the WSC’s request that GAMS urgently implement a solution to fulfill this objective. GAMS members recognized the importance of applying zero duties on MCPs and agreed to work together diligently to resolve any relevant issues.
GAMS members reported on their efforts to add to the number of signatories to the MCP agreement. GAMS noted that the IT industry will be a driver of economic development and that it is important to create a favorable environment for investors and producers by joining the Agreement. GAMS members agreed to continue their efforts to have other countries joining the Agreement.
MCO experts meeting