The World Trade Organization announced that the European Union is entitled to hike tariffs on nearly $4 billion in U.S. goods due to the trade distorting effects of tax breaks for Boeing. The tariffs -- the levels of which have not been announced -- are not to go into effect immediately, but could affect civil aircraft, helicopters, tractors, chemicals, hazelnuts, wines, liquor, cotton and other products, according to a preliminary list of targets released last year.
Fifty senators, including 42 of 53 Republicans, wrote to U.S. Trade Representative Robert Lighthizer this week, asking that the administration “begin the formal process of negotiating a comprehensive trade agreement with Taiwan.” The first step of the formal process would be notifying Congress, then soliciting input into negotiating priorities.
The U.S.-Japan mini-deal is not consistent with World Trade Organization rules, a former White House trade negotiator said, so the two sides mentioned a future phase two deal to cover substantially all trade to convince Japan's parliament to pass the accord. Because of the way the deal was structured, with small tariff reductions for Japanese exporters, it did not require a vote in Congress, Clete Willems, speaking recently on a webinar for University of Nebraska students, said. In calling the mini-deal phase one, “I think both sides were playing it cute, to be honest,” Willems, now at Akin Gump, said. He said Japan was not interested in a comprehensive bilateral trade deal, because it still wants the U.S. to rejoin the Trans-Pacific Partnership.
Mexico's cabinet members in charge of implementing labor law changes and managing the USMCA more broadly said they are helping the private sector evaluate whether businesses could be a target of the rapid response mechanism, and they are working on the four-year process of democratizing labor unions in the country. Labor Secretary Luisa Maria Alcalde de Lujan said new laws include eliminating the former arbitration system, which was part of the executive branch, and creating a system of labor judges.
The U.S. needs to increase engagement with China to convince it to limit restrictions on foreign companies and to end unfair government subsidies, former U.S. Trade Representative Michael Froman said. Although Froman said he is “hopeful” the U.S. can secure these concessions through more trade negotiations, he also said the U.S. may need to focus more on its own industrial policy to remain technologically competitive with China.
The U.S. and the United Kingdom completed a fourth round of free trade agreement negotiations last week and have moved into the “advanced stages” in most areas, the U.K.’s Department for International Trade said Sept. 22. The two sides “exchanged their first tariff offers” before the fourth round began, leading to “detailed market access discussions” during the round of negotiations. “Significant progress has been achieved since launching negotiations,” the agency said, calling the exchange of tariff offers a “notable milestone.” The U.K. said “the speed at which this stage has been reached demonstrates the momentum behind these negotiations.” The two sides plan to hold the fifth round of talks in mid- to late October, the U.K. said, again with discussions taking place before it begins. The Office of the U.S. Trade Representative did not comment.
Senate Minority Leader Chuck Schumer and his fellow New York colleague, Sen. Kirsten Gillibrand, sent a letter to U.S. Trade Representative Robert Lighthizer and the Agriculture Secretary Sonny Perdue, urging them to monitor the elimination of Class 6 and Class 7 pricing programs in Canadian dairy, the avoidance of geographical indications for cheese names in Mexico, and the implementation of more generous tariff rate quotas for dairy imports in Canada. “While the new tariff-rate quota commitments were intended to provide U.S. dairy producers with greater access to Canada’s dairy market, it is our understanding that Canada’s announced TRQs place U.S. producers at a disadvantage and are inconsistent with the market access provisions secured in agreement,” they wrote Sept. 15.
European Union Director General for Trade Sabine Weyand said the EU has made another offer to settle the Boeing-Airbus dispute. “There's a lot we need to do to calm down the tensions in our relationship,” she said during a Sept. 15 webinar hosted by the American Institute for Contemporary German Studies at Johns Hopkins University. She pointed to the deal on lobster tariffs as good but small. “It's the first tariff liberalization we have done in 20 years” between the U.S. and EU, she noted.
A new World Trade Organization dispute settlement panel report said that the U.S. improperly applied Section 301 tariffs on goods from China. “It remains to be seen whether the US decides to appeal the ruling,” former WTO official Peter Ungphakorn said in a tweet. “Since the Appellate Body cannot function, this would be an 'appeal into the void.'” The WTO appeals court is mostly inoperable due to a U.S. hold on adding new members.
The 10% tariffs on Canadian non-alloyed unwrought aluminum will be refunded back to Sept. 1, and the tariffs won't return unless Canadian exporters exceed either 70,000 tons or 83,000 tons in that category (see 2009150040), the Office of the U.S. Trade Representative said on Sept. 15. The office said the limits start at 83,000 for the current month, then go to 70,000, then back to 83,000, then back to 70,000 for December. USTR did not say the tariffs would definitely return if Canadian exporters exceed these numbers by at least 5%, and suggested that if Canadian exporters reduced the next month's shipments by the same amount of the overage, that would satisfy USTR.