COUNCIL FOR TRADE IN GOODS

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The Russian Federation initiated the discussion regarding the US investigations under Section 232 of the US Trade Expansion Act of 1962. The Russian Federation said the United States should refrain from applying trade-restrictive measures as a result of its investigations on steel and aluminium imports for the sake of the stability of world markets. It added that concerted action in the international community against excess production capacity was needed instead.

The European Union said no exception in the General Agreement on Tariffs and Trade (GATT) is capable of justifying an import restriction taken outside of the framework of trade remedies for the purpose of protecting a domestic industry against foreign competition. The EU added it will be firm in taking all necessary actions if import restrictions were applied to EU exports. It said that a proliferation of actions from the US Section 232 investigations would pose “systemic risks”.

China said the US Section 232 investigations were inconsistent with the GATT and that imports of steel and aluminium were not a threat to national security.

Article XXI of the GATT describes specific circumstances for when WTO members can use security interests to justify deviations from WTO commitments.

Brazil, Australia and Chinese Taipei expressed their concerns over implications this issue would have on the global trading system. Japan said it was closely following the US government’s actions.

The United States, in response, said its Secretary of Commerce had initiated these investigations in light of the critical role steel and aluminium serve in the US national security industrial base and the continued increase in steel and aluminium imports. The United States added that if the Commerce Secretary finds that steel or aluminium is being imported into the United States “in such quantities or in such circumstances as to threaten to impair national security”, the Secretary shall recommend actions to be taken to adjust the imports of steel and aluminium.

Trade restrictions on Qatar

Qatar, meanwhile, expressed its concern over measures implemented in June by Saudi Arabia, the United Arab Emirates (UAE) and Bahrain. Qatar said the measures were in violation of WTO commitments. Qatar had earlier raised a similar matter at the Council for Trade in Services meeting held on 13-16 June.

Bahrain, responding also for Saudi Arabia, the UAE and Egypt, said these measures were in accordance with Article XXI of the GATT. Bahrain said that this provision allows, in cases of an emergency in international relations, for a WTO member to limit actions that would affect national security interests. The UAE took the floor to speak further, saying that the situation in the Gulf was very serious and it involved at the core the issue of national security. The UAE said the matter did not fall under the competence of the Goods Council nor of the WTO. Egypt said the trade restrictions fall under the “exceptional circumstances” and thus were consistent with WTO rules. 

The United States urged all parties to remain open to negotiations, saying this was the best way to resolve the matter. The US said it will continue to stay in close contact with all parties and will continue to support the mediation efforts of the Emir of Kuwait. The US believed its allies and partners were stronger when they work together towards countering security threats. The US said each country involved had something to contribute to that effort.

Turkey expressed its hope that this matter would come to a quick resolution given the “hundreds years of fraternal and strong ties” among the parties involved.

Work programme on e-commerce

Several members took the floor to express their views on the continuing e-commerce discussions.

The Goods Council Chair, Ambassador Choi Kyonglim (Korea), afterwards cited strong interest in e-commerce among members and lauded the “very strong” exchange of experiences, practices and views.

The Chair noted, however, that differences in views remained. He encouraged members to continue to reflect on the issue. He also said he would be available for further consultations.

Measures restricting banana imports

Ecuador expressed concern against Brazilian measures on banana imports from Ecuador. Ecuador said a container of its bananas was not allowed to enter Brazil this year despite previous bilateral work to iron out certifications intended to rule out the presence of certain plant diseases. Ecuador said its economy and millions of jobs depended on these exports.

Brazil said there had already been positive developments in the form of bilateral progress in agreeing on a work plan for risk assessments.

Anti-dumping measures on fertilizers

Russia said Ukraine was applying artificially inflated anti-dumping duties on nitrogen fertilizers imported from Russia.

Ukraine said its measures, which came into effect on 22 May, were in line with WTO rules.

Proposal for temporary admission of packing materials

Australia invited members to an information session on an initiative to establish binding international rules ensuring the duty-free temporary admission of containers, pallets and packing materials. Australia said this initiative would reduce trade costs and assist micro-, small-, and medium-sized enterprises. Several members welcomed the initiative; however, some indicated that efforts should be concentrated in the implementation of the Trade Facilitation Agreement. Other delegations said that it was necessary to identify the tariff lines which corresponded to the goods to which Australia was referring.

Other trade concerns

Several trade concerns previously brought to the Goods Council’s attention were raised again at the meeting.

  • Many WTO members again raised their concerns over Nigeria’s currency restrictions, local content requirements and import bans. Nigeria’s representative was not present at the meeting to respond.
  • Ecuador reiterated its complaint against Brazil’s measures restricting shrimp imports. Brazil said the federal government was taking appropriate measures to try to reverse a preliminary measure adopted by its judicial body.
  • Several members spoke against Indonesia’s import and export restricting policies and practices. Members cited measures affecting agricultural products, food products, steel, mining, gas and oil, renewable energy, among others. Indonesia said it will relay these concerns to its capital for consideration in discussions on whether to undertake changes.
  • Eleven WTO members reiterated complaints against India’s restrictions on various imports, with many also raising concerns over India’s plans to increase customs duties on more information technology products. On these new plans, India said it was forwarding members’ concerns to authorities for their consideration.
  • Several members again complained about Egypt’s requirement of registration for manufactured goods and what they said was a slow and burdensome process for it. Egypt said it was doing so to address counterfeit and substandard goods that could hurt consumers and legitimate manufacturers. Egypt noted that since the decree had been implemented in 2015, “hundreds” of manufacturers had been registered.
  • African Union (AU) members who are also members of the WTO were again urged to ensure the WTO-consistency of their application of import levies in line with the Kigali Decision of July 2016. Reports indicated that at least two AU members intended to apply a 0.2% levy on non-AU goods to finance the functioning of their organization. Rwanda said it will convey these statements to its relevant authorities.
  • The United States reiterated its concern over the Chinese government’s intervention and support in industrial sectors such as steel and aluminium. The US also expressed concern about the timeliness and completeness of China’s notifications on its subsidies. The European Union, Japan and Canada expressed their concerns over global overcapacity in steel and aluminium. China said it had already phased out some of its production capacities and eliminated 65 million tons of steel capacity and was wondering what fellow members have done to contribute to addressing the global problem. The G20 forum formed on addressing global overcapacity, China added, was the appropriate forum for this discussion.
  • China again complained about the US use of trade defence measures and seafood import monitoring programme. China also reiterated its call to members to “honour” their commitments as provided under China’s 2001 Protocol of Accession, as it relates to the use of third-party prices or costs in calculating anti-dumping margins as of 11 December 2016. This was a legal issue that should not be politicized and it is an international issue that should not be circumvented by domestic laws, China said.
  • The European Union reiterated its concerns over Russia’s import restrictions for cement, certification requirements for pharmaceuticals and ban on exports of skins and hides. The EU also asked for clarification about Russia’s plans to adopt export restrictions on more products. Russia said that it had already responded to questions about pharmaceutical and cement import restrictions at previous meetings. Russia said it was still preparing answers to the question on the export ban on skins and hides. As for additional export bans, Russia said goods qualified as “important” are not intended to be subject to export limitation.

Members received updates on tariff adjustment re-negotiations following the Kyrgyz Republic’s and Armenia’s accession to the Eurasian Economic Union (EAEU) and the European Union’s enlargement after Croatia’s accession. Members were also apprised on Jordan’s efforts to reform its export subsidy programme. The Council also took note of six regional and free trade agreements.

Next meeting

The next regular meeting of the Goods Council is scheduled for 9 November 2017.

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