Proposed List of EU Products – Retaliatory Duties
As you may know, the U.S. has issued a list of proposed EU products that may be subject to retaliatory duties as a result of a World Trade Organization decision in which it was determined that the U.S. was harmed by subsidies granted by the EU and certain member States to the EU large civil aircraft domestic industry, on the basis that the subsidies appeared to be inconsistent with their obligations under the General Agreement on Tariffs and Trade 1994 (GATT 1994) and the Agreement on Subsidies and Countervailing Measures
In order to enforce U.S. WTO rights in connection with the Large Civil Aircraft dispute, the Trade Representative is initiating a section 301 investigation of the subsidies provided by the EU and certain member States on the manufacture of large civil aircraft.
According to the Federal Register Notice, “upon determining that U.S. rights under a trade agreement are being denied, section 301(a) provides that the Trade Representative shall take all appropriate and feasible action authorized under section 301(c), subject to the specific direction, if any, of the President regarding such action, and all other appropriate and feasible action within the power of the President that the President may direct the Trade Representative to take to enforce such rights. Pursuant to sections 301(a), 301(c), 304(a)(1)(B), and 306(b)(2), the Trade Representative proposes that appropriate action would include the imposition of additional ad valorem duties of up to 100 percent on products of the EU or certain member States, to be drawn from the preliminary list of HTS numbers in the attached Annex.”
As you may know, the China tariffs currently in affect, were also initiated as a result of a Section 301 investigation by the U.S. Trade Representative’s office.
Please note that the U.S. government may impose additional duties of up to 100% on the final list of products.
This is the not the first time the U.S. government has initiated retaliatory duties against EU products. The U.S. and EU were involved in a long-standing dispute over the EU’s ban of U.S. beef from cattle treated with hormones. In 1999, retaliatory duties of 100% were assessed on a substantial number of EU products. These duties were in place until May 2009 when the U.S. and EU signed a Memorandum of Agreement.
However, it appears that the U.S. and EU may be entering into negotiations for a potential trade agreement. It remains to be seen how this may affect the current proposal for retaliatory duties.
There will be a public hearing in Washington D.C. on May 15 to discuss the proposal and comments may be submitted to the USTR’s office through May 28.
I will keep you posted of any developments.