1. MCO Status Report to JSTC
February 24, 2011
Shanghai, China
Semiconductor Industry Association in Europe

2. 2010 GAMS Summary
GAMS welcomes the work achieved so far by industry to define multi-component (MCO) products and notes the WSC’s support for rapidly reaching an agreement on a definition for MCO products. In this context, GAMS noted that the informal meeting on the definition of MCO was held in September 15 in attendance of industry and government/authority of China, Chinese Taipei, the EC, Japan, Korea, and the United States. GAMS noted that the EU proposed a new definition of MCO and welcomed this proposal. GAMS agreed to move forward with this proposal submitted by the United States to the WCO in 2008 as a starting point.
Based on the social contribution of semiconductors mentioned in paragraph 3, 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.

3. MCO status report (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

4. MCO status report (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.

5. MCO status report (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.

6. JSTC Actions - proposal

7. Proposed text on MCO for JSTC Summary