USTR Proposes Products for Tariff Countermeasures in Response to Harm Caused by EU Aircraft Subsidies

On April 8, 2019, the World Trade Organization (WTO) found that the European Union subsidies to Airbus had caused adverse effects to the United States. The Office of the United States Trade Representative (USTR) began its process under Section 301 of the Trade Act of 1974 to identify products of the EU to which additional duties may be applied until the EU removes these subsidies. The USTR released a preliminary list of EU products to be covered by these additional duties.

United States Prevails on “Zeroing” Again: WTO Panel Rejects Flawed Appellate Body Findings

On April 9, 2019, U.S. Trade Representative Robert Lighthizer announced that a World Trade Organization (WTO) panel had found in favor of the United States in a dispute involving the use of “zeroing” in calculating antidumping duties. This dispute concerned a challenge by Canada to an antidumping investigation of softwood lumber products.

In this report, the WTO panel considered and rejected Appellate Body findings concerning the use of “zeroing” to calculate antidumping duties. The panel interpreted the WTO Antidumping Agreement and found that the text does not prohibit zeroing under the alternative methodology designed to address targeted dumping. The panel found that, reading a prohibition on zeroing into the text would render that alternative approach useless, contrary to the intention of WTO Members. The panel explained that it “carefully considered” prior panel and Appellate Body reports but disagreed with those reports and therefore found convincing reasons to arrive at different conclusions.

U.S. Beef, Poultry and Egg Products Gain New Market Access in Tunisia

On April 17, 2019, the U.S. Trade Representative Robert Lighthizer and U.S. Secretary of Agriculture Sonny Perdue announced today that the government of Tunisia and the United States have finalized U.S. export certificates to allow imports of U.S. beef, poultry, and egg products into Tunisia. In 2018, U.S. exports of agricultural products to Tunisia exceeded $264 million. Over 90 percent of exports were corn, soybeans, or corn and soy products. Initial estimates are that Tunisia would import annually $5-10 million of beef, poultry, and egg products from the United States, with additional growth over time.

Statement from U.S. Trade Representative Robert Lighthizer on the ITC Report

On April 18, 2019, United States Trade Representative Robert Lighthizer released the following statement about the U.S. International Trade Commission’s (ITC) report on the United States-Mexico-Canada Agreement (USMCA):

“We welcome the International Trade Commission’s independent analysis of the USMCA.  This report is an important step forward in gaining congressional approval of the USMCA.  The ITC analysis shows that USMCA will increase U.S. employment by 176,000 jobs and is projected to increase GDP by 0.35%.  This is more than double the 0.15% growth rate the ITC projected for the multilateral Trans-Pacific Partnership.  These findings validate President Trump’s action to withdraw from TPP and renegotiate the disastrous NAFTA.  With USMCA, we will have stronger growth, more trade and more jobs – particularly in manufacturing.  There can be no doubt that the USMCA is a big win for America’s economy.”

The Office of the United States Trade Representative (USTR) released an analysis of the estimated impact the USMCA will have on U.S. investment, purchases of U.S. auto parts, and jobs in the U.S. automotive sector. The analysis, based in large part on information provided by North American automakers, estimates that over a five-year period the USMCA will result in:

  • $34 billion in new automotive manufacturing investments in the U.S.
  • $23 billion in new annual purchases of U.S.-made automotive parts; and
  • 76,000 jobs in the U.S. automotive sector alone.

To see USTR’s full analysis, click here.

United States Wins Dispute Finding China’s Administration of Grain Tariff-Rate Quotas Breaches WTO Commitments

On April 18, 2019, U.S. Trade Representative Robert Lighthizer and Secretary of Agriculture Sonny Perdue announced that a World Trade Organization (WTO) dispute settlement panel found that China has administered its tariff-rate quotas (TRQs) for wheat, corn, and rice inconsistently with its WTO commitments. China’s grain TRQs have annually been underfilled. USDA estimated that if China’s TRQs had been fully used, it would have imported as much as $3.5 billion worth of corn, wheat and rice in 2015 alone.

USTR Releases Annual Special 301 Report on Intellectual Property Protection and review of Notorious Markets for Piracy and Counterfeiting

On April 25, 2019, the Office of the United States Trade Representative (USTR) released its annual Special 301 Report on the adequacy and effectiveness of trading partners’ protection of intellectual property rights and the findings of its Notorious Markets List.

The Special 301 Report identifies trading partners that do not adequately or effectively protect and enforce intellectual property (IP) rights or otherwise deny market access to U.S. innovators and creators that rely on protection of their IP rights. Trading partners that currently present the most significant concerns regarding IP rights are placed on the Priority Watch List or Watch List. USTR identified 36 countries for these lists in the Special 301 Report.

Specifically, over the coming weeks, USTR will review the developments against the benchmarks established in the Special 301 action plans for countries that have been on the Priority Watch List for multiple years. For such countries that fail to address U.S. concerns, USTR will take appropriate actions, such as enforcement actions under Section 301 of the Trade Act or pursuant to World Trade Organization or other trade agreement dispute settlement procedures, necessary to combat unfair trade practices and to ensure that trading partners follow through with their international commitments. To see the full 301 Report, click here.

The Notorious Markets List highlights 33 online markets and 25 physical markets that are reported to engage in and facilitate substantial copyright piracy and trademark counterfeiting. To see the full Notorious Markets List, click here.

This article was published by Husch Blackwell in the monthly Trade Law Newsletter. To read the full April Trade Law Update click here.