On 17 May 2018, the European Journal published Commission Implementing Regulation (EU) 2018/724 of 16 May 2018 on certain commercial policy measures concerning certain products originating in the United States of America (the Regulation). The Regulation states that although the measures (in the form of an additional 25% duty on certain steel products and 10% duty on certain aluminium products) adopted by the United States on 8 March 2018 were characterised as security measures, they are in essence safeguard measures that “disturb the balance of concessions and obligations resulting from the WTO Agreement and restrict imports for the purpose of protecting domestic industry against foreign competition, for the sake of that industry’s commercial prosperity.”
The WTO Agreement on Safeguards provides for the right of any exporting Member affected by a safeguard measure to suspend the application of substantially equivalent concessions or other obligations to the trade of the WTO Member applying the safeguard measure, provided that no satisfactory solution is reached in consultations and the WTO Council for Trade in Goods does not disapprove. Inasmuch as consultations between the United States and the Union as envisaged in Articles 8 and 12.3 of the WTO Agreement on Safeguards did not reach any satisfactory solution, a Regulation suspending the application of substantially equivalent concessions or other obligations is necessary.
The Regulation provides that:
Article 1
The Commission shall immediately, and in any event no later than 18 May 2018, give written notice to the WTO Council for Trade in Goods that, absent disapproval by the Council for Trade in Goods, the Union suspends, from 20 June 2018, the application to the trade of the United States of import duty concessions under the GATT 1994 in respect of the products listed in Annex I and Annex II of the Regulation, so as to allow for an application of additional customs duties on the importation of these products originating in the United States.
Article 2
The application of additional customs duties on these products, through a subsequent Commission implementing act, shall be effected within the following parameters, and take into account any subsequent exclusion of certain products or companies from the safeguard measures by the United States:
(a) At the first stage, additional ad valorem duty of a maximum rate of 25 % may be applied on imports of products listed in Annex I from 20 June 2018.
(b) At the second stage, further additional ad valorem duty of a maximum rate of 10 %, 25 %, 35 % or 50 % may be applied on imports of products listed in Annex II:
— from 23 March 2021, or
— from the fifth day following the date of the adoption by, or notification to, the WTO Dispute Settlement Body of a ruling that the United States’ safeguard measures are inconsistent with the relevant provisions of the WTO Agreement, if that is earlier. In the latter event, the Commission shall publish in the Official Journal of the European Union a notice indicating the date on which such ruling is adopted or notified.
Article 3
The suspension provided for in Article 1 may be exercised as long as, and to the extent that, the United States applies or re-applies its safeguard measures in a manner that would affect products from the Union. The Commission shall publish in the Official Journal of the European Union a notice indicating the date on which the United States has ceased to apply its safeguard measures.
Article 4
1. Products listed in the Annexes for which an import licence with an exemption from or a reduction of duty has been issued prior to the date of entry into force of this regulation shall not be subject to additional duty.
2. Products listed in the Annexes for which the importers can prove that they have been exported from the United States to the Union prior to the date on which an additional duty is applied with respect to that product shall not be subject to the additional duty.
The Regulation notes that On 22 March the effective date of the tariff increase with respect to the European Union was deferred to 1 May 2018. However, the Regulation does not reflect the subsequent 30 day deferral.
