The holiday season is nearly upon us, yet things in the trade world are not so jolly. The United Kingdom (UK) eked out a slight gain in the third quarter to avoid a recession. In the fourth quarter, the usual High Street hustle and bustle is expected to be dampened somewhat as Brexit uncertainty continues
Transatlantic Trade Sensitivities Come to the Fore with Regulatory Divergence on Pesticides
More than a quarter of pesticides used by U.S. farmers are banned in the European Union. Atrazine which the U.S. Environmental Protection Agency estimates to be the most widely used herbicide in the U.S., for instance, was banned in the EU in 2003 due to concerns that it is a groundwater contaminant. In April 2018,
WTO Determines Indian Export Subsidies Are Prohibited, Must Be Withdrawn Within Six Months
On October 31, 2019, the World Trade Organization (WTO) ruled in favor of the United States in determining that Government of India provides prohibited export subsidies to Indian producers and exporters. The WTO dispute panel determined that the: Merchandise Exports from India Scheme (MEIS); Export Oriented Units Scheme (EOU) and related sector-specific schemes; Special Economic
A Tale of Two Aircraft: U.S. Wins Historic Award in Airbus Case While EU Awaits Ruling on Boeing
On October 2, 2019, the World Trade Organization (“WTO”) awarded the U.S. the largest arbitration award in the WTO’s history, $7.5 billion annually, in retaliation for the unlawful EU subsidization of Airbus. The award comes after nearly 15 years of litigation at the WTO where the U.S. successfully argued that the EU and four of its member states conferred more than $18 billion to Airbus in subsidized financing.
As retaliation, the U.S. will impose an additional 10 percent duty on airplanes from France, Germany, Spain, and the United Kingdom, as well as an additional 25 percent duty on certain goods including single malt Irish and Scotch whiskies, coffee from Germany, cheeses from several countries, and certain garments from the United Kingdom. The retaliatory tariffs will likely take effect on October 18, 2019 and will be “continually re-evaluate{d}. . . based on {U.S.} discussions with the EU.” In selecting the goods that will be affected by the retaliatory tariffs, the Office of the U.S. Trade Representative explained that the tariffs are intended to most heavily impact imports from France, Germany, Spain, and the United Kingdom, the Member States that provided Airbus with the disputed subsidies.
Meanwhile, tariff threats also loom over the U.S. in a parallel WTO case regarding the illegal subsidization of Boeing in the U.S. The global trade regulator is expected within six-to-eight months to authorize the EU to impose its own retaliatory tariffs on U.S. goods. In April, the EU published a preliminary list of U.S. products to be considered for countermeasures. Ahead of the WTO’s ruling on its case regarding the subsidization of Boeing, the EU might choose to revoke prior settlements with the U.S. in other WTO cases, which would effectively create tariffs on approximately $4 billion worth of U.S. imports into the EU.
Continue Reading A Tale of Two Aircraft: U.S. Wins Historic Award in Airbus Case While EU Awaits Ruling on Boeing
The EU and Canada Blueprint for Interim WTO Dispute Settlement
The World Trade Organization’s (WTO) dispute settlement process risks collapse by the end of this year as the United States continues to block appointments to the WTO Appellate Body. Once the terms of two of the three remaining WTO Appellate Body Members expire on 10 December 2019, the WTO’s appeals court no longer will possess
Senate Finance Committee Asks USTR Lighthizer: What is the Future of the WTO?
On Tuesday, U.S. Trade Representative Robert Lighthizer testified before the Senate Finance Committee to discuss a question that is central to the Trump Administration’s trade policy agenda: What is the future of the World Trade Organization (WTO)? As the 25th anniversary of the 1994 creation of the WTO (in its current form) approaches, the Trump Administration has been vocal in its criticism of the WTO’s shortcomings and failure to abide by the text of the agreements as written in 1994. The Administration has pledged, as part of its overall trade policy, to seek critical reforms that will improve and reform the WTO’s functions going forward. And, as Senator Wyden put it, trade issues including WTO challenges are one of the least known and biggest problems facing the United States’ ability to create good paying jobs and to expand our markets.
Ambassador Lighthizer answered questions on a number of topics relating to the WTO and, more generally, current U.S. trade policies:
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Trump Issues 2019 Trade Agenda: China, USMCA, WTO Reform, and More
The Trump Administration has issued its 2019 trade policy agenda in a several hundred page report to the Congress. The report covers a broad range of trade topics, many of which have been at the forefront of the Administration’s agenda for the past couple of years. These include renegotiating the NAFTA into the USMCA, WTO
Global Trade Flows Are Expanding, But Is There a Reason for Optimism?
Last Friday, the CPB Netherlands Bureau for Economic Policy Analysis, as part of its World Trade Monitor, reported that global trade flows – the volume of export and imports of goods – was 4.5% higher in 2017 than in 2016. This is an important finding because it marks the biggest rate of year-in-year expansion since the world began recovering from the global financial crisis, exceeding expectations for the year. According to the CPB World Trade Monitor, global trade flows grew 24% between January 2010 and December 2017.
Experts, however, are cautiously optimistic about the news and what it could mean for 2018. Last year, significant uncertainties about critical aspects of the global economy made it difficult to predict the track of trade growth. The WTO cited unpredictability with respect to government action on monetary, fiscal, and trade policy, and whether trade would be restricted in favor of attempts to address domestic wage stagnation and unemployment.
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Canada Challenges Certain United States Antidumping and Countervailing Duty Measures
On January 10, 2018, Canada circulated to WTO members a request for consultations challenging several aspects of the United States antidumping and countervailing proceedings. The request for consultation is available on the WTO’s website and can be found here.
In particular, Canada challenges:
- the way in which the U.S. Department of Commerce refunds cash deposits after adverse WTO determinations;
- the United States’ suspension of liquidation of cash deposit requirements when the U.S. Department of Commerce preliminarily determines critical circumstances exist;
- the U.S. Department of Commerce’s treatment of certain export measures by foreign governments in the agency’s countervailing duty proceedings;
- the U.S. Department of Commerce’s calculation of benefits involving the provision of goods for less than adequate remuneration in the agency’s countervailing duty proceedings; and
- the U.S. Department of Commerce’s procedures for collecting evidence in antidumping and countervailing duty investigations.
China to Encourage Even More Steel Exports
Late last week, the Government of China announced that it would be removing export taxes on many steel products, including wire, rods, bars, billets, and stainless steel plate, as of January 1, 2018. The move is part of a number of tax changes. The steel export tax has not prohibited massive volumes of Chinese steel from being shipped to other markets in the face of overwhelming overcapacity at home. But the absence of the export tax will make it even easier for Chinese steel producers to export steel products around the world. Notably, China typically adjusts export tax levels on an annual basis as a policy measure to encourage or discourage certain exports. Thus, this latest decision signals not only the Government of China’s continued active intervention in the market, but its support for even greater exports of Chinese steel, which the world can hardly absorb.
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