Panels will review U.S. Section 301 tariffs on China and retaliatory tariffs by Turkey against U.S. Section 232 measures.
The World Trade Organization Dispute Settlement Body (DSB) on Monday agreed to form dispute panels to review U.S. Section 301 tariffs on goods from China and additional duties imposed by Turkey on certain imports from the U.S. in response to U.S. Section 232 tariffs, a Geneva source said in an email.
There have now been six panels established to examine duties imposed by WTO members on imports from the U.S. in response to the steel and aluminum tariffs.
The U.S. on Dec. 18 blocked China’s first request for a dispute panel.
During Monday’s DSB meeting, China said it was making its second request because of “the urgency of this dispute,” which China said infringes its rights, flagrantly violates WTO rules and fundamental principles and could put WTO viability in “dire peril,” if the U.S. continues these measures, the Geneva source said.
The U.S. countered by saying that China is threatening the viability of the WTO system by using the dispute settlement system as a shield for several trade-distorting practices and policies not covered by WTO rules.
The U.S. added that China’s imposition of retaliatory tariffs covering $100 billion of U.S. exports renders China’s request for a dispute panel hypocritical, and said China’s second panel request shows it isn’t serious about addressing legitimate concerns of its trading partners.
China responded that the findings of the Section 301 investigation are a “willful distortion of facts and full of selective assertions and allegations,” according to the Geneva source.
As for Turkey’s retaliatory tariffs against U.S. steel and aluminum tariffs, the U.S. said its Section 232 measures are national security actions and therefore are fully justified under WTO rules adding that Turkey and other WTO members that have retaliated against the U.S. are “pretending” that U.S. actions are “safeguards” and therefore prohibited under WTO rules, according to the Geneva source.
Turkey responded that WTO members are retaliating because of “unwarranted and unjustified unilateral U.S. action” and said the U.S. is pretending its action is based on national security concerns when the tariffs’ nature and purpose show they are safeguards.
The EU said the number of dispute panels established regarding U.S. steel and aluminum tariffs showed the “depth of opposition that the U.S. actions have generated around the world” and that these disputes will demonstrate the rules-based system is good and strong enough not to allow abuse of WTO rules and affirm the right of WTO members to retaliate against the U.S. tariffs, according to the Geneva source.
Apart from tariff matters, the U.S. continued its blockage of new Appellate Body appointments, which started in August 2017.
Mexico reintroduced a proposal supported by 71 total WTO members calling for establishment of a selection committee to appoint new members to the Appellate Body, which currently has four vacancies on its seven-member panel, with two current members slated to depart in about a year.
The Appellate Body must maintain at least three members to issue rulings.
Commenting on issues with the Appellate Body, the U.S. pointed to its 2018 U.S. Trade Policy Agenda, which outlined several concerns, including rulings that overstep established WTO rules in areas including trade remedies, standards and technical barriers to trade, restricting the United States’ ability to regulate in the public interest or protect U.S. workers or businesses from unfair trade practices.
The U.S. also reiterated that the WTO should correct the “situation where the Appellate Body acts as if it has the power to permit ex-Appellate Body members to continue to decide appeals even after their terms of office have expired,” the Geneva source said.
Speaking on behalf of 71 members supporting the Appellate Body proposal, Mexico said the “considerable” number of WTO members supporting the proposal reflects a common concern with the body’s current situation that is “seriously affecting its workings” and the overall dispute settlement system against the best interest of WTO members.
Several members during the DSB meeting welcomed the informal process launched by WTO General Council Chair Ambassador Junichi Ihara to overcome the impasse on the selection of Appellate Body members, as well as the appointment of New Zealand Ambassador David Walker to act as facilitator for the discussions, according to the Geneva source.
But the members indicated that a selection process should start in the meantime.
DSB Chair Sunanta Kangvalkulkij noted that Walker would report back to membership on his consultations with members at the WTO General Council meeting Feb. 28.
WTO dispute panels will look at tariffs involving U.S.
