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Tariffs Not the Only Trade Restrictions Worrying WTO Members

Tuesday, July 17, 2018
Sandler, Travis & Rosenberg Trade Report

A recent meeting of the World Trade Organization’s Council for Trade in Goods saw a number of WTO members raise concerns about the Trump administration’s use of tariff increases to address trade concerns. A number of other trade restrictive measures were discussed as well.

(Click here for ST&R’s web page providing comprehensive information on all U.S. tariffs imposed under Section 301 and Section 232 as well as the retaliatory tariffs trading partners are levying on U.S. goods.)

According to a WTO press release, more than 40 members warned of the “serious disruption” to world markets and the multilateral trading system that could arise if the U.S. restricts imports of autos and/or auto parts following its ongoing Section 232 national security investigation, particularly in light of the large proportion of global trade accounted for by these products. Several argued that such measures cannot be justified on national security grounds; e.g., the EU said there is no apparent economic threat to a U.S. industry that has steadily expanded domestic production over the last decade. Other members, including Canada, Turkey, Hong Kong, Singapore, Brazil, Korea, Mexico, and India, raised concerns that the U.S. investigation could trigger a cycle of measures and counter-measures that will harm all members. China said it is willing to “work with all WTO members to tackle this challenge and to take concrete action in order to safeguard the authority of the WTO and fight against unilateralism and protectionism.”

WTO members also pointed out that the U.S. additional tariffs on steel and aluminum imports, which have been in place since March 23 on most countries, are “already having negative effects on the supply chains, on producers and exporters, on the U.S. downstream industry, and finally on U.S. consumers,” the press release stated. Members said global overcapacity in the steel and aluminum sectors is a serious problem but is not one that will be solved by border taxes; instead, it should be addressed through dialogue and negotiations in international fora such as the Organization for Economic Cooperation and Development.

Other issues raised at the CTG meeting included the following.

-  the European Union's decision to register the term "Danbo" as a protected geographical indication and a request to protect the term "Havarti” (both types of cheese)

- implementation by Gulf Cooperation Council countries of a 100 percent excise duty on energy drinks and a 50 percent duty on other carbonated drinks

- Haiti’s decision to apply tariffs higher than its WTO bound levels following its accession to the Caribbean Community and its failure to notify the WTO of its decision to ban the importation of 23 products, mainly food and construction products

- Pakistan’s 1.5 million metric ton sugar freight import subsidy

- India’s measures on sugar exports and quantitative restrictions on imports of pulses and peas

- Russia’s cement certification requirements, good manufacturing practice certificates for pharmaceutical products, export bans on skins and hides, import duties on a series of tariff lines, embargo on fishery products from Estonia and Latvia, wine taxation regime, and new regime applied to the automotive sector as of July 1

- a proposed rule by the U.S. Federal Communications Commission intended to prohibit the use of federal funds to purchase equipment or services from any communications providers identified as posing a national security risk to domestic networks or the communications supply chain

- previously discussed issues such as the African Union's levy on imports to fund peace support operations, Indonesia's restrictions on imports and exports, India's customs duties on information and communications technology products, Egypt's manufacturer registration system, Vietnam’s rules on automobile manufacturing, China's measures on the import of scrap materials and customs duties on integrated circuits, U.S. measures on aviation security equipment, and the EU's treatment of biofuels and bio-liquids derived from palm oil.

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