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WTO Members Raise Concerns Over US Tariffs on Steel and Aluminium at Goods Council

Chennai:

Port Wings News Network:

WTO members expressed concern over the United States’ imposition of higher tariffs on steel and aluminium imports and the impact they may have on the global trading system at a meeting of the Council on Trade in Goods on 23 March, the same day the new US measure came into effect. The US responded by saying that the tariffs are necessary to address the threat these imports pose to national security.

WARNING US AGAINST MEASURES

Over 40 members – including the 28 members of the European Union – took the floor to warn against measures that have repercussions not only on traders’ commercial interests but also on the predictability and stability of the rules-based multilateral trading system following the entry into force of the “Presidential Proclamation on Adjusting Imports of Steel into the United States”. The proclamation imposes a 25% ad valorem tariff on imported steel and a 10% tariff on aluminium articles as of 23 March.

The US measure is inconsistent with the General Agreement on Tariffs and Trade (GATT) and the WTO Agreement on Safeguards, said China, which, along with Russia, had requested for this issue to be taken up at the meeting. China was of the view that the US measure did not take into account information demonstrating how steel and aluminium imports would not affect national security. China called on the United States to refrain from taking unilateral measures, follow WTO rules and uphold the multilateral trading system.

NEW TARIFFS EXCEED THE BOUND RATES

The Russian Federation said the new tariffs exceed the bound rates the United States had committed to under WTO rules. It further noted that several WTO members would be exempted from the new US measure and sought further clarification on this exemption and how the measure can be justified under WTO rules. The Russian Federation said it was looking forward to constructive dialogue with the US.

The other members who took the floor to raise issue with the new US measure and call for the upholding of the multilateral trading system were Japan; Venezuela; Brazil; New Zealand; Turkey; Korea; Hong Kong, China; Singapore; Thailand; Pakistan; Norway; Australia; India; El Salvador; Switzerland; Paraguay; Guatemala; and Kazakhstan.

“THREATEN TO IMPAIR THE NATIONAL SECURITY”

In response, the United States said that its Secretary of Commerce, in its investigations pursuant to Section 232 of the Trade Expansion Act of 1962, had found that quantities of imports and circumstances of global excess capacity for producing steel and aluminium “threaten to impair the national security”. Tariffs, as noted in the US President’s proclamations, are necessary to address the threat.

The US further noted that the President’s proclamations authorized the provision of relief from the new duties on steel or aluminium articles determined not to be produced in the United States in sufficient amounts or of satisfactory quality. The Department of Commerce published requirements and procedures on 19 March for requesting such exclusions and submitting objections to exclusion requests. Moreover, on 22 March, the President issued proclamations removing, for a period of time, the application of additional tariffs with respect to certain countries with which the US has a “security relationship”, the US said.

US TRANSPARENCY PROPOSAL

The Goods Council also considered the United States’ revised proposal to enhance transparency and strengthen notification requirements. Members had earlier discussed the first version of the proposal at the 10 November meeting of the Goods Council ahead of the 11th Ministerial Conference (MC11) in Buenos Aires; however, no decision was taken at MC11.

“US FOR GENERAL COUNCIL DECISION”

The United States, introducing its revised proposal, said it had made changes to reflect that it is no longer seeking a Ministerial outcome but rather a General Council decision. It said it removed explicit provisions pertaining to notifications concerning technical barriers to trade and specific enhancements proposed for fisheries subsidy notifications. The US said, however, that is has maintained the administrative measures it had previously proposed for WTO members that fail to provide a required notification after a certain time.

US PROPOSAL FOR REVIVING A WORKING GROUP

All members who took the floor reiterated their agreement that enhancing transparency and improving members’ compliance with notification requirements were important objectives. Several welcomed the US proposal for reviving a working group dedicated to improving notification compliance and updating the handbook on notification obligations. However, many were of the view that the proposed administrative measures would not necessarily encourage compliance with the notification obligations, particularly when technical capacity to draft these notifications was lacking.

Image courtesy: Longroom

STATEMENT BY DIRECTOR-GENERAL AZEVÊDO IN RELATION TO THE COUNCIL ON TRADE IN GOODS

Director-General Roberto Azevêdo today (23 March) issued the following statement in regards to the meeting of the WTO’s Council on Trade in Goods.

“At today’s meeting of the Council on Trade in Goods, WTO members reviewed and discussed many of the most pressing trade issues of the moment, including a number of the specific tensions that have arisen between different members in recent weeks. It is positive to see members continuing to use the WTO as a place to discuss these issues.

“ENCOURAGE MEMBERS TO CONTINUE WORKING THROUGH THE WTO’S MANY FORUMS”

“I encourage members to continue working through the WTO’s many forums and mechanisms to deal with their concerns and explore potential solutions. Actions taken outside these collective processes greatly increase the risk of escalation in a confrontation that will have no winners, and which could quickly lead to a less stable trading system. Disrupting trade flows will jeopardise the global economy at a time when economic recovery, though fragile, has been increasingly evident around the world. I again call for restraint and urgent dialogue as the best path forward to resolve these problems.”

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