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U.S. Pledges to Fight WTO Challenge to AD/CV Duties

Thursday, January 31, 2019
Sandler, Travis & Rosenberg Trade Report

U.S. Trade Representative Robert Lighthizer says the U.S. intends to fight “very aggressively” a new European Union case at the World Trade Organization challenging U.S. antidumping and countervailing duties on olives from Spain.

Effective Aug. 1, 2018, the U.S. imposed AD duties of 16.83 percent to 25.39 percent and CV duties of 7.52 percent to 27.02 percent on all colors, shapes, and sizes of ripe olives grown, processed in whole or in part, or packaged in Spain, regardless of the method of packaging, preparation, or preservation. The orders excluded only (1) specialty olives that have been processed by fermentation only or by being cured in an alkaline solution for not longer than 12 hours and subsequently fermented, and (2) provisionally prepared olives unsuitable for immediate consumption.

On Jan. 29 the EU filed a request for consultations at the WTO challenging these orders. EU Trade Commissioner Cecilia Malmström called the U.S. duties “unjustified, unwarranted and … against the rules of the World Trade Organisation.” A Forbes article adds that the tariffs “represent a threat to the European Common Agricultural Policy” and that a final resolution “may affect other judicial procedures regarding US tariffs in the future.”

However, Lighthizer said the EU’s case is “without merit,” pointing out that the U.S. found “evidence that Spanish producers engaged in significant price underselling during the period examined, particularly when import values were increasing” and that “the actions of Spanish producers resulted in significant job losses and declines in profitability for the U.S. industry.” Given that the purpose of the global trading system is “to promote market-efficient outcomes that reward hard work and innovation,” he added, “it would be unfortunate if the WTO were to encourage the type of unfair and market-distorting trade that was at issue in this case.”

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