Jacob Kopnick

The Office of the U.S. Trade Representative's proposal to tariff up to $11 billion worth of goods from the EU as part of a long-running dispute over aircraft subsidies (see 1904090031) adds some new tension to an already fraught trade relationship. Although the trade dispute resolution that the U.S. is asking for pertains to large commercial airplanes, it goes far beyond aerospace, hitting cheeses and other food, wine, clothing and building materials. “This case has been in litigation for 14 years, and the time has come for action. The Administration is preparing to respond immediately when the WTO issues its finding on the value of U.S. countermeasures,” USTR Robert Lighthizer said in a news release.

The World Trade Organization ruled that the U.S. did not comply with a previous order to end a Washington state subsidy for Boeing manufacturing, which, the Appellate Body said, cost Airbus sales in 2008, 2011, 2013 and 2014, to Fly Dubai, Delta, Icelandair and Air Canada.

The general counsel to the U.S. trade representative said that after five trilateral meetings with the European Union and Japan, the countries have reached "general agreement" on how the World Trade Organization should address subsidies and state-owned enterprises. He said it's not just U.S. blue-collar workers who have grown dissatisfied with globalization, and pointed to the new populist government in Italy, Brexit and the Yellow Vest movement in France.

U.S. Trade Representative Robert Lighthizer, who is leading the China trade talks, downplayed the possibility that President Donald Trump and Chinese President Xi Jinping will sign a trade agreement a month from now. Lighthizer, who testified before the House Ways and Means Committee Feb. 27, was asked by Chairman Richard Neal, D-Mass., if he sees a package coming in the next few weeks. "I’m not foolish enough to think there’s going to be one negotiation that’s going to change all the practices in China," Lighthizer replied. "At the end of this negotiation, if we’re successful, there'll be a signing." But that's the beginning of a long process to monitor China's compliance with what it promises to do.

The U.S. and the United Kingdom signed two agreements that ensure both countries’ trade of wine and liquor will continue after the UK leaves the European Union, the Office of the U.S. Trade Representative announced Feb. 4. The move extends trading agreements in place between the U.S. and the EU, "to ensure there is no disruption in trade of these products" between the partners once Brexit is final. The UK was the fourth-largest export market for U.S. wine and the largest export market for U.S. spirits in 2017, USTR said. The U.S. and UK under the bilateral distilled spirits agreement will continue to recognize the names Scotch whisky, Irish whisky, Tennessee whisky, Bourbon whisky, and Bourbon, according to a press release.

The U.S. trade representative complained about the European Union's intention to bring a case at the World Trade Organization challenging antidumping and countervailing duties on Spanish olives. Antidumping duties are between 16.88 percent and 25.5 percent, and countervailing duties are between 7.52 percent and 27.02 percent (see 1807310076). The USTR said the U.S. International Trade Commission said the actions of Spanish producers resulted in significant job losses and declines in profitability for the U.S. industry. "We believe that the EU’s case is without merit, and we intend to fight it very aggressively,” USTR Robert Lighthizer said Jan. 29, after the EU asked for consultations in Geneva.

The Office of the U.S. Trade Representative will hear from 24 witnesses at a Jan. 29 public hearing on what its priorities should be in negotiating a free trade agreement with Great Britain, once it is free to leave the European Union customs union. The witnesses include representatives from trade groups for agricultural, apparel, express shipping and other services, pharmaceutical, chemical and semiconductor interests, as well as people from the U.S. Chamber of Commerce, the United States Council for International Business and the AFL-CIO.

EBay praised a bipartisan group of Congress members who want the U.S. trade representative to stop talking about "reciprocal" de minimis levels. There is a footnote to that effect in the new NAFTA (see 1810190043) that has drawn opposition from trade groups in the past (see 1811060010). But despite that, the USTR included the same language in negotiating priorities for both Japan and the European Union. The EU is on a path to have no de minimis level at all for tax purposes. EBay is critical of the de minimis increases USTR convinced Mexico and Canada to agree to, because there are lower tax de minimis levels than the duty de minimis of $117. The company called it "unnecessarily complicated."

The first set of products excluded from the initial tranche of Section 301 tariffs (see 1812240010) is hoped to be the beginning of good news from the Office of the U.S. Trade Representative, said David Cohen, a customs lawyer with Sandler Travis. "We hope that this is the first notification of many exclusions to be granted," Cohen said in an email. "Many of the articles subject to the tariff are those which are not related to the stated intent of the Section 301 action which is safeguarding technology and apply, in some cases, to products that utilize decades old commonly available technology. Moreover, the breadth of the coverage unfortunately sweeps in many products that in no way help China achieve her 2025 goals; for example a hand wrench is included. We hope the Administration continues to review the pending petitions and permit many other products to enter the US commerce free from the Section 301 duties."

“Successful negotiation” of a U.S.-EU trade agreement would need to build on World Trade Organization “principles” for removing technical trade barriers, safety consulting and certification company UL told the Office of the U.S. Trade Representative in comments in docket USTR-2018-0035 submitted to help frame U.S. negotiating positions in future trade talks. UL especially wants USTR to be sure a U.S.-EU trade agreement preserves “regulators’ decision making authority,” it said. UL also urges USTR to “consider regulatory cooperation solutions beyond mutual recognition agreements as these are often problematic in implementation.” A successful trade agreement should “enhance the business and investment climate” for services in UL's wheelhouse, including “testing, inspection and certification, that help companies deliver on innovation, compliance, and market access needs as a means to reduce regulatory barriers,” it said. Many other companies and groups offered input in the same docket (see 1812110013).