A European high-tech trade group has fired a warning shot at the European Commission after hearing the body planned to offer a proposal to charge tariffs on "sophisticated" mobile phones. Handsets with increased functionality -- like GPS and mobile TV -- would face a tax of up to 14 percent, contrary to requirements of the WTO's Information Technology Agreement. The move, which was reportedly widely overseas but not in the United States, comes as a panel prepares to consider a case brought against the EU by Japan, Taiwan and the United States that grew out of the EU's imposition of what critics believe are unfair fees on a range of products like flat-screen monitors and set-top boxes.

"The net effect of these decisions is that European consumers will face rising prices for IT and telecom products, which not only contradicts the purpose of the ITA, but also is in total opposition with current measures to boost consumer purchasing power that feature in many national economic stimulus plans," according to EICTA, a group that represents Alcatel-Lucent, Apple, IBM, Microsoft, Siemens, Sony and other firms. Companies with components based in Europe companies would face a "costly blow to their operations in the EU, at a time when many are struggling to maintain profitability," the group said.

At the time the initial complaint against the EU was filed by U.S. Trade Representative Susan Schwab in May, House Ways and Means Chairman Charles Rangel and Ways and Means Trade Subcommittee Chairman Sander Levin, D-Mich., issued a statement saying legislation was needed "to ensure a more assertive approach to the enforcement of our international agreements and trade laws."