Digital Magazine: December 16, 2018

Nine WTO dispute panels now reviewing 232 duties

The WTO Dispute Settlement Body on Tuesday agreed to form panels requested by India and Switzerland.

   The World Trade Organization Dispute Settlement Body (DSB) on Tuesday agreed to establish two panels, at the request of Switzerland and India, to rule whether Section 232 duties on steel and aluminum comply with WTO rules, a Geneva trade official wrote in an email.
   The U.S. blocked Switzerland’s and India’s first requests for panels during the last DSB meeting on Nov. 21.

Nine WTO dispute panels now reviewing 232 duties

The WTO Dispute Settlement Body on Tuesday agreed to form panels requested by India and Switzerland.

Nine WTO dispute panels now reviewing 232 duties

The WTO Dispute Settlement Body on Tuesday agreed to form panels requested by India and Switzerland.

 
Continued from previous page
   The World Trade Organization Dispute Settlement Body (DSB) on Tuesday agreed to establish two panels, at the request of Switzerland and India, to rule whether Section 232 duties on steel and aluminum comply with WTO rules, a Geneva trade official wrote in an email.
   The U.S. blocked Switzerland’s and India’s first requests for panels during the last DSB meeting on Nov. 21.
   Both countries said the U.S. actions are safeguard measures and challenged repeated U.S. assertions that the duties fall under the General Agreement on Tariffs and Trade (GATT) Article XXI national security exception.
   Switzerland challenged the U.S. argument that invoking Article XXI prevents dispute panels from reviewing claims against U.S. tariffs, noting that WTO members could abuse that article to exempt commercial measures from the scope of WTO dispute settlement if there were no possibility of a panel reviewing such a claim.
   Responding to Switzerland’s and India’s requests, the U.S. said there is no basis for a panel to review Indian and Swiss claims because the U.S. had invoked Article XXI, and there is no finding a panel could make other than to note the U.S. invoked Article XXI.
   The U.S. also claimed that reviewing an invocation of Article XXI would undermine the legitimacy of the WTO’s dispute settlement system and the viability of the WTO itself, according to the Geneva source.
   The U.S. position is that “the text of Article XXI is clear; each WTO member has the right to determine for itself what it considers to be in its own essential security interests,” the Geneva source said. “This has been the understanding of the U.S. for over 70 years since the negotiation of the GATT, and this understanding has been shared by every WTO member whose national security action was subject of complaint, including WTO members such as the European Union, Canada, Russia and others.”
   Panels were established in November pursuant to requests by the EU, China, Mexico, Norway, Canada, Russia and Turkey.
   The formation of panels at the requests of Switzerland and India bring the total number of WTO dispute panels reviewing U.S. Section 232 duties to nine.
   In addition to requests for panels to review the legality of U.S. Section 232 duties, Russia blocked a first request by the U.S. for formation of a dispute panel to determine whether Russian duties in retaliation to the Section 232 duties comply with WTO rules.
   The U.S. noted that Russia and other WTO members that have imposed retaliatory tariffs on the U.S. are “pretending” that U.S. actions are so-called “safeguards” and “further pretend” that the duties constitute a suspension of equivalent concessions that is allowable under the WTO’s Safeguards Agreement, according to the Geneva source.
   The U.S. contended that Russia’s duties are “nothing more” than tariffs in excess of Russia’s WTO commitments and are applied only to the U.S., contrary to the WTO most-favored nation principle.
   Russia said U.S. Section 232 duties are, in essence, safeguards, irrespective of how the U.S. characterizes them, according to the Geneva source.
   The DSB has established four panels at the request of the U.S. to review the legality of duties imposed by Canada, China, the EU and Mexico on U.S. imports in response to U.S. Section 232 tariffs.
   The U.S. can resubmit its request for a panel during the next DSB meeting on Dec. 18, at which point the request would be approved.
We see a significant slowdown in import growth in 2019 as the market adjusts to higher prices due to the Trump tariffs and the impact on consumer and industry confidence going forward.
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