On February 24, 2022, the Biden Administration announced the release of six executive-branch reports and a White House “capstone” report pursuant to Executive Order (EO) 14017 on America’s Supply Chains (February 24, 2021), which established a policy of pursuing more resilient, diverse, and secure American supply chains. These reports culminated year-long sectoral assessments of the
United States Reaches Deal with Austria, France, Italy, Spain, and the United Kingdom to Avoid Section 301 Duties
Today, the Office of the U.S. Trade Representative (USTR) announced an agreement reached with five countries – Austria, France, Italy, Spain, and the United Kingdom – on digital services tax (DST) measures that had been subject to recent investigations by USTR under Section 301 of the Trade Act of 1974. These countries will avoid 25
USTR Proposes Section 301 Tariff Exclusion Renewal (Spreadsheet Attached)
On Monday, October 4, U.S. Trade Representative Katherine Tai delivered a long anticipated speech framing the Biden Administration’s trade policy toward China.
Among the announcements made were that (1) a Section 301 product exclusion process would be “restarted” with respect to the tariffs currently in effect, and (2) additional enforcement actions against China could be
DST Section 301 Investigations: Additional Findings and Updates for Austria, Spain, the United Kingdom, Brazil, the Czech Republic, the European Union, and Indonesia
Following our reporting earlier this week on the Section 301 determinations regarding digital services tax (DST) measures in India, Italy, and Turkey, the Office of the U.S. Trade Representative (USTR) has today issued additional findings regarding DSTs in Austria, Spain, and the United Kingdom. USTR issued reports regarding each country and notices of affirmative conclusions
USTR Issues Determinations in Digital Services Tax Investigations
The Office of the U.S. Trade Representative (UST) has issued determinations in the investigations of digital services taxes (DSTs) adopted or considered by India, Italy, and Turkey, finding that “each of the DSTs discriminates against U.S. companies, is inconsistent with prevailing principles of international taxation, and burden {sic} or restricts U.S. commerce.” Notably,
New Legal Action Provides Opportunity for Refunds on Products Impacted by China 301 Tariffs
Importers of vinyl flooring filed a case at the U.S. Court of International Trade (CIT) on September 10, challenging the Administration’s application of tariffs on products from China on Lists 3 and 4 pursuant to USTR’s intellectual property Section 301 investigation.
The complaint alleges that the President’s imposition of tariffs to products on these lists,
Hearing Date Announced for GSP Reviews
The Office of the U.S. Trade Representative (USTR) has announced a hearing date and related deadlines for review of certain countries’ ongoing eligibility under the United States’ Generalized System of Preferences (GSP) program. We previously wrote about these GSP reviews here, which may result in the United States’ decision to suspend duty-free GSP benefits
President Trump Suspends Preferential Trade Treatment for Thailand
On Friday, October 25th, the Office of the U.S. Trade Representative (USTR) announced that the United States will be suspending certain benefits for imports from Thailand under the United States’ Generalized System of Preferences (GSP) program for failure to “adequately provide internationally-recognized worker rights.” As a result, 573 U.S. Harmonized Tariff Schedule line
China Requests $2.4 Billion in Relief After WTO Ruling Against United States
Late last week, China filed a request with the World Trade Organization (WTO) Dispute Settlement Body (DSB) for authorization to “suspend concessions and related obligations” in the amount of $2.4 billion as recourse for the United States’ alleged failure to comply with a 2015 dispute settlement report. The disagreement stems from a dispute filed by China in May 2012 challenging certain aspects of 17 countervailing duty investigations by the United States, on a wide range of products, as conducted by the Department of Commerce (DS437). The decision reached by a WTO panel, as modified by the WTO Appellate Body and adopted by the DSB in January 2015, included a number of findings in favor of and against the United States. In particular, the WTO Appellate Body found that Commerce’s “rebuttable presumption” that Chinese state-owned enterprises are public bodies, and that Commerce’s rejection of Chinese private transaction prices as distorting the benchmark for the “provisions of goods or services for less than adequate remuneration” benefit analysis, were inconsistent with WTO rules.
In May 2016, China returned to the WTO to request consultations with the United States under Article 21.5 of the Dispute Settlement Understanding (DSU), which establishes procedures for when parties disagree about whether the losing party has implemented the DSB’s recommendations and rulings. Failed consultations led to the establishment of a compliance panel, which issued a decision in March 2018. Both China and the United States appealed to the WTO Appellate Body. In July 2019, the Appellate Body upheld the compliance panel’s
Continue Reading China Requests $2.4 Billion in Relief After WTO Ruling Against United States
Developing Country Status Up for Debate at WTO
At the WTO General Council’s meeting this week in Geneva, the debate over developing country rights at the WTO came to a head. The United States has recently been especially outspoken in its criticism of developing country status for WTO members, which entitles the declared developing country to certain exemptions, longer timetables for implementation of commitments, and other flexibilities under WTO agreements to assist with integration into the world trading system – generally known as “special and differential treatment.” Special and differential treatment provisions are found in virtually all WTO agreements, ranging from commitments to increase trade opportunities for developing country members, to requirements to protect developing country interests, to rules allowing for flexible implementation, transitional time periods, and technical assistance. For example, developing countries may extend for two additional years their own safeguard actions to restrict imports causing injury to their domestic industries, and are generally exempt from the application of other members’ safeguard actions. Since the WTO’s creation in 1995, however, the WTO has not specified any criteria or process for determining developing country status, allowing members to self-declare their status without meeting any analytical requirements.
According to the United States, this lack of discipline has led to unpredictable and illogical results, with some of the world’s wealthiest and fastest developing (in terms of economic, social, and other indicators) – and often most trade-distorting – countries putting themselves as the same category as the WTO’s least-developed members in order to strategically or uniformly avoid additional commitments. Some of the examples cited by the United States of those WTO members seen to be unreasonably declaring themselves as developing include China, India, Singapore, Israel, Mexico, Turkey, Chile, Indonesia, South Africa, South Korea, the United Arab Emirates, and Qatar. As the United States explained in a WTO communication issued in February 2019:
Simply put, self-declaration has severely damaged the negotiating arm of the WTO by making differentiation among Members near impossible. By demanding the same flexibilities as much smaller, poorer Members, export powerhouses and other relatively advanced Members . . . create asymmetries that ensure that ambition levels in WTO negotiations remain far too weak to sustain viable outcomes. Members cannot find mutually agreeable trade-offs or build coalitions when significant players use self-declared development status to avoid making meaningful offers. Self-declaration also dilutes the benefit that the {least-developed countries} and other Members with specific needs tailored to the relevant discipline could enjoy if they were the only ones with the flexibility.
The United States’ February communication also proposed that the General Council adopt a new approach that would preclude special and differential treatment “in current and future WTO negotiations” for countries that fall into at least one of four categories: members of the Organization for Economic Cooperation and Development (OECD); one of the G20 countries; classified as “high income” by the World Bank; or account for “no less than 0.5 per cent of global merchandise trade (imports and exports).”
Continue Reading Developing Country Status Up for Debate at WTO