[Update to April 8 article below] On April 12, 2019, the Office of the US Trade Representative published in the Federal Register a notice of initiation of investigation, hearing, and request for comments [Docket No. USTR–2019–0003] regarding enforcement of US rights in the World Trade Organization (WTO) dispute against the European Union (EU) and certain EU member States addressed to EU subsidies on large civil aircraft. USTR proposes determinations that the EU and certain member States have denied US rights under the WTO Agreement and have failed to implement WTO Dispute Settlement Body recommendations. USTR proposes to take action pursuant to section 301 of the Trade Act of 1974, as amended, in the form of additional duties on products of the EU or certain member States, to be drawn from the preliminary list annexed to the Federal Register notice. The interagency Section 301 Committee is seeking public comments and will hold a public hearing in connection with the proposed determinations.
The preliminary list Annex has two sections. The products that are enumerated and described in Section 1 are being considered for additional import duties if they are the product of any of the following four member States of the European Union: France, Germany, Spain or the United Kingdom. The Section 1 list covers certain civilian helicopters, aircraft, aircraft assemblies and parts in headings 8802 and 8803.
The products that are enumerated and described in Section 2 of the Annex to the notice are being considered for additional import duties if they are the product of any of the twenty-eight member States of the European Union. The list is very broad and covers products ranging from items in heading 0303 through items in heading 9603 [see examples in the article below].
To be assured of consideration, the following schedule applies:
May 6, 2019: Due date for submission of requests to appear at the public hearing and summary of testimony.
May 15, 2019: The Section 301 Committee will convene a public hearing in the Main Hearing Room of the U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436 beginning at 9:30 a.m.
May 28, 2019: Due date for submission of written comments, including post-hearing rebuttal comments.
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On April 8, 2019, the US Trade Representative (USTR) stoked the fires of simmering trade dispute between the United States and the European Union. Specifically, the USTR posted a preliminary list of EU products that will be subject to additional duties upon importation into the United States as a result of a dispute over aircraft subsidies (the underlying dispute has been the subject of WTO litigation for many years).
The United States has requested permission to impose countermeasures (i.e., additional duties) against EU products worth $11.2 billion a year. The list includes aircraft and aircraft parts imported from France, Germany, Spain and/or the United Kingdom, as well as many other unrelated articles imported from any EU country (e.g., certain fish, cheeses, olive oils, wines, textiles, apparel, ceramics, metals, tools, motorcycles, lenses, oscilloscopes, etc.). The WTO is considering the appropriate amount of the retaliation and a final list will be published once that is done. In the meantime, interested parties may file comments with the USTR on what articles should be on the list.
The EU has also brought a case at the WTO regarding US-subsidies for domestic aircraft production. In response to the April 8 announcement that the United States was moving forward, the EU has said that it will also seek permission from the WTO to impose retaliatory duties on US-origin products under its case.
All companies that trade with the EU should review the preliminary list and consider their options. These duties are in addition to the duties the United States currently imposes on steel and aluminum, and is threatening to impose on automobiles and auto parts, from the EU under Section 232. The EU has imposed its own additional duties on US products and is threatening to add to that here.
We hope this is helpful. If you have any questions about these issues (including how to cope), please let us know. Author: Ted Murphy.
