COUNCIL FOR TRADE IN GOODS

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China expressed concerns over the final conclusions of the US Trade Representative (USTR) Section 301 investigation of China's IP regime, which was released on 22 March. The USTR had announced that it initiated the investigation to determine if China's acts, policies and practices were a burden or restriction on US commerce as provided by the US Trade Act of 1974 and that it has been instructed, among others, to publish a proposed list of tariff increases on Chinese imports within 15 days.  China said unilateral action stemming from the investigation will not only impair China's rights and interests but will also undermine the multilateral trading system.

China noted that the WTO's Dispute Settlement Understanding (DSU) prohibits WTO members from unilaterally determining that there has been a violation of WTO rules and that the United States was setting a negative precedent.

China further said the United States' action contradicted the panel report on the dispute "United States – Sections 301-310 of the Trade Act 1974" (DS 152) where it was stated that the USTR would base Section 301 investigations only on the basis of decisions by the DSU. China said it was fully prepared to react and would take actions consistent with the WTO's rules in order to safeguard its interests. It then called on WTO members to defend the multilateral trading system.

Japan and the European Union said they shared the views of the United States over the need for stronger IP protection and that they too were concerned about China's technology licensing requirements. However, any trade measure should be consistent with WTO agreements, the European Union and Japan said.

The United States said it would not comment as China had only requested the issue to be included at the start of the meeting on 23 March under "Other Business". The United States instead referred members to the USTR website for more information about the Section 301 actions. It said that, according to the USTR report, China's technology transfer policies and practices are causing "billions of dollars in losses annually" to US businesses and individuals.

The United States further noted that it had requested consultations with China under the WTO's DSU. The request was circulated to WTO members on 26 March.

US measures on solar cells and washers

Six WTO members expressed their concern over the United States' imposition of safeguard measures against imported solar cells and residential washers in the form of higher tariffs. China, which initiated the discussion, said the measures were inconsistent with the General Agreement on Tariffs and Trade and the WTO Agreement on Safeguards.

China asked the United States to explain how it conducted its investigation as China was of the view there was a "flawed" determination behind the decision to impose safeguard measures. China believed that these investigations and measures represented a dangerous tendency towards trade protectionism inside the US administration, which undermined the multilateral trading system.

The European Union, Switzerland, Korea, Malaysia and Singapore also expressed their concern. Delegations also referred to the consultations that had taken place under Article 8 of the Safeguards Agreement that unfortunately had not been conclusive. Delegations called upon the United States to refrain from taking trade‑restrictive actions and instead to adopt more proportionate trade defence measures.

The United States replied that the steps it had taken were consistent with WTO rules. It had found imports to be in such increased quantities as to be a substantial cause of serious injury or threat of serious injury to its domestic industry. The United States added that it has offered and conducted consultations with members.

US aviation security measures

China expressed concern that applications for the United States to certify Chinese x-ray machines for air cargo were not being addressed. China said it was being denied access to US conformity assessments for these x-ray machines. According to WTO rules, the treatment of foreign suppliers should be the same as that accorded to domestic suppliers without the effect of an unnecessary trade obstacle, China said.

The United States said that it will not comment in detail because the matter was not included in the meeting agenda well in advance. China had requested the discussion to be added belatedly under "Other Business."

African Union import levy

Five WTO members (the United States, Japan, the European Union, Canada and Norway) reiterated their concerns over the African Union's levy on imports as a means to fund the group's peace support operations. They said that while they support the African Union's initiative to self-finance, trade measures must be transparent and comply with WTO rules. The United States listed the African Union members that have started collecting the 0.2% levy as well as those that have initiated processes to start implementing the levy. 

South Africa, on behalf of the African Group, said it has taken note of the statements and will convey them to members of the African Union.

E-commerce work programme

Chinese Taipei introduced two papers about e-commerce it circulated last month about the reported benefits from the free flow of online data and the need for WTO rules to keep up with changes in trade patterns posed by online innovations. Chinese Taipei said it hoped these papers would help facilitate further discussions on e-commerce at the WTO.

Japan meanwhile indicated that the Trade Facilitation Agreement could address some of the challenges relating to the increasing volume of parcels in relation to e-commerce and that the issue should be addressed at the Committee on Trade Facilitation. Norway and Panama reiterated their readiness to engage in discussions, including the elements concerning commodities, and the advantages for micro, small and medium enterprises, particularly those in developing countries.
Cuba and South Africa reiterated that discussions on e-commerce should remain under the framework of the existing mandate under the Work Programme and that the issue should be discussed multilaterally.

China likewise said it continues to value a multilateral discussion and said that information sharing on cross-border e-commerce should be enhanced. It suggested holding a joint seminar in Geneva with the participation of the World Customs Organization, other international organizations, experts and enterprises. The seminar could be held in July and include discussions on the latest developments and policy suggestions on cross‑border e‑commerce, China said. Several WTO members expressed support for such a seminar.

Election of officers

The Council elected Ambassador Stephen de Boer (Canada) as the new chair. He had been appointed as Canada's Ambassador and Permanent Representative to the WTO last 21 August 2017. The Council also elected new chairs for its subsidiary bodies.

Other agenda items

Other issues discussed at the meeting can be found in the 23 March summary. The full agenda of the meeting is available here.

Next meeting

The next Council meeting will be held on 3 July 2018.

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