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Higher Import Duties Could Result from USTR Change

Wednesday, February 12, 2020
Sandler, Travis & Rosenberg Trade Report

A recent regulatory change will make it easier for the U.S. to impose countervailing duties on imports from Brazil, India, South Africa, and a number of other countries.

Under the World Trade Organization Agreement on Subsidies and Countervailing Measures and U.S. law implementing that agreement, WTO member countries that have not yet reached the status of a developed country are entitled to special treatment for purposes of CV measures. Specifically, the U.S. must terminate a CV duty investigation involving such a country if (a) the amount of the subsidy is two percent or less, compared to the normal de minimis threshold of one percent, or (b) the volume of subsidized imports from that country is less than four percent of total imports, compared to the normal threshold of three percent, unless the aggregate volume of imports from countries whose individual volumes are less than four percent exceeds nine percent (normally seven percent).

Updated List

In 1998 the Office of the U.S. Trade Representative published a rule designating the WTO member countries eligible for such de minimis treatment. Effective Feb. 10 USTR has removed that rule and revised its list of eligible countries to read as follows. Countries that appear to have been added to the list are in bold.

Afghanistan

Angola

Bangladesh

Benin

Bolivia

Botswana

Burkina Faso

Burundi

Cabo Verde

Cambodia

Cameroon

Central African Republic

Chad

Côte d'Ivoire

Cuba

Democratic Republic of the Congo

Dominica

Dominican Republic

Djibouti

Ecuador

Egypt

El Salvador

Eswatini (Swaziland)

Fiji

Gabon

Gambia

Ghana

Grenada

Guatemala

Guinea

Guinea-Bissau

Guyana

Haiti

Honduras

Jamaica

Jordan

Kenya

Laos

Lesotho

Liberia

Madagascar

Malawi

Maldives

Mali

Mauritania

Mauritius

Mongolia

Morocco

Mozambique

Myanmar

Namibia

Nepal

Nicaragua

Niger

Nigeria

Pakistan

Papua New Guinea

Paraguay

Peru

Philippines

Rwanda

Senegal

Sierra Leone

Solomon Islands

St. Lucia

St. Vincent & Grenadines

Samoa

Sri Lanka

Suriname

Tajikistan

Tanzania

Togo

Tonga

Tunisia

Uganda

Vanuatu

Venezuela

Yemen

Zambia

Zimbabwe

Countries Removed from List

While the following countries met the designation criterion of having a per capita gross national income of $12,375 or below, they were excluded from the updated list for the following reasons.

Share of world trade more than 0.5 percent – Brazil, India, Indonesia, Malaysia, Thailand, and Vietnam  

European Union member – Bulgaria and Romania

Organization for Economic Cooperation and Development member – Colombia and Costa Rica

Group of 20 member – Argentina, Brazil, India, Indonesia, and South Africa

Failure to declare itself a developing country for purposes of the SCM Agreement – Albania, Armenia, Georgia, Kazakhstan, Kyrgyz Republic, Moldova, Montenegro, North Macedonia, and Ukraine

Other countries that appear to have been removed from the list include Antigua & Barbuda, Argentina, Bahrain, Barbados, Belize, Chile, Colombia, Costa Rica, Malta, Panama, St. Kitts & Nevis, Slovenia, Thailand, Trinidad & Tobago, and Uruguay.

For more information on CV duty issues, please contact trade attorney Kristen Smith at (202) 730-4965.

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