A variety of export subsidies, which allowed certain industries to avoid paying sales taxes, customs duties, or reduce income tax liability have been ruled illegal by a World Trade Organization panel. The ruling was released Oct. 31. India, unless it appeals the ruling, has 90, 120 or 180 days to stop the programs at issue.
The World Trade Organization will convene a dispute settlement panel to judge whether India had the right to impose tariffs on apples, almonds, motorcycles and other products (see 1906170053). The panel was approved for formation in Geneva Oct. 29. Under the additional tariffs, American apples are taxed at 70 percent, compared with 50 percent for other countries' apple exports; the tariff on almonds and walnuts increased by 20 percentage points; and chickpeas and lentils have an additional 10 percentage points of duties. Most of these products are imported at low volumes, but India projected that it would collect more than $100 million in tariffs on almonds in the shell, and more than $20 million on apples. India says it is justified because the Section 232 tariffs on steel and aluminum are really safeguards to protect American mills and foundries, not national security measures. India is one of many countries involved in litigation at the WTO over the steel and aluminum tariffs -- others include Norway, Russia, the 28 countries of the European Union and China.
South Korea will continue to be classified as a developing country at the World Trade Organization in some respects, but not in negotiations, Reuters reported. "The government decided not to seek special treatment as a developing country from future negotiations at WTO,” Finance Minister Hong Nam-ki said Oct. 25. Developing countries are allowed looser standards on agriculture subsidies in the WTO, and the finance minister emphasized that Korea will continue to protect its agriculture.
Ten trade groups, all typically Republican allies, sent a letter to the White House and U.S. Trade Representative Robert Lighthizer asking that America submit a proposal for reforming the World Trade Organization's Appellate Body, with the offer that if it were adopted, the U.S. would stop blocking appointments to that body. While the administration has been clear about its concerns on how the appeals process is conducted, it has not offered a specific solution. The Oct. 23 letter also defended the dispute settlement system at the WTO, saying, "Since the United States is the world’s largest trading nation and the second-largest exporter, it has been one of the major beneficiaries of the WTO process."
World Trade Organization Deputy Director General Alan Wolff said that while there are tricky issues in the e-commerce talks in Geneva -- privacy and the free flow of data among them -- "the process is moving forward rapidly and in a very good spirit."
China is going to ask the World Trade Organization to authorize retaliatory tariffs on $2.4 billion worth of goods at the WTO's dispute settlement body meeting Oct. 28. If the U.S. disagrees with either the argument that it's not complying with the ruling on countervailing duties, or the amount of retaliation permitted, an arbitrator will decide how much China may retaliate.
Trade experts identified many weaknesses of the World Trade Organization -- the evidentiary standard for countervailing duties: the fact that CVD in one market doesn't help the industry's economics when surplus flows to other countries; the length of time it takes to show adverse effects to domestic firms; the fact that 164 countries can't agree on trade liberalization.
The World Customs Organization issued the following release on commercial trade and related matters:
The U.S. Chamber of Commerce, the Information Technology Industry Council and 25 other trade groups, including groups from Africa, Asia, South America and Europe, have issued a position paper on what they'd like to see in the plurilateral E-Commerce Agreement at the World Trade Organization. The U.S. and China are both in these talks, and some are concerned that China will oppose what business groups describe as high-standard planks, such as prohibiting data localization and no restrictions on cross-border data flows.
The World Customs Organization issued the following release on commercial trade and related matters: