GHY Tradelines

(The Canadian Press)

The federal government is threatening “retaliatory measures” against the United States in a dispute over meat-labelling rules that Ottawa and the World Trade Organization consider discriminatory.

The U.S. government has announced new regulations on so-called country of origin labelling that would track beef and hogs through the meat processing and distribution systems.

Canada objects to the labelling system on the grounds that it is costly, burdensome and will lead to the “disintegration” of the North American supply chain.

“Canada is extremely disappointed with the regulatory changes put forward by the United States today,” Agriculture Minister Gerry Ritz and Trade Minister Ed Fast said in a joint release Thursday. Read more here.

Related:

• U.S. Revises Meat-Labelling Rules to Satisfy WTO (Globe & Mail)

• FAITC News Release
 

(World Bulletin)

The WTO ruled in late June last year that a U.S. program for labeling imported meat unfairly discriminated against Mexico and Canada.

The United States is not respecting a World Trade Organization (WTO) ruling on meat labeling, Mexico’s Agriculture Minister Enrique Martinez said on Tuesday, saying it was hurting local industry.

The WTO ruled in late June last year that a U.S. program for labeling imported meat unfairly discriminated against Mexico and Canada, putting pressure on the United States to bring the scheme in line with global country-of-origin meat-labeling rules.

“We can’t understand why once the very WTO … issues a ruling, the government of the United States does not respect it,” Martinez said.

“We have talked with beef producers in the United States and Canada, and totally agree this is an arbitrary decision and means discrimination against Mexican beef, which we will never agree with and as a government will defend against.” Read more here.
 

(BBC News)

Barack Obama and Xi Jinping will meet from 7-8 June at an estate in Rancho Mirage, a U.S. statement said. Topics on the agenda are likely to include North Korea, cyber espionage, tensions in the South China Sea and Syria.

The meeting will be the first between the two since Mr Xi was named president of China in March. Mr Xi, 61, made his first visit as president to Russia, followed by three African nations. He has visited the U.S. in the past, and spent time there as a young man.

The two men would hold “in-depth discussions on a wide range of bilateral, regional and global issues”, the White House said. “They will review progress and challenges in U.S.-China relations over the past four years and discuss ways to enhance co-operation, while constructively managing our differences, in the years ahead.” Read more here.
 

(Deutsche Welle)

China has urged the EU to stop raising new trade barriers or face consequences. This comes in response to EU punitive tariffs on Chinese solar exports and EU efforts to launch a probe into the country’s telecom products.

Attempts by the European Union to raise hurdles for Chinese exports to the EU would meet “assertive” measures to defend China’s lawful interests and rights, Shen Danyang, a spokesman for the Ministry of Commerce, told a regular news conference Thursday.

“Any consequences caused must be borne by the party which provoked the friction,” he added, referring to recently announced plans by the European Executive Commission to shield the 27-nation bloc from Chinese price dumping on certain goods. Read more here.
 

(Ethan Billy – Reuters)

The European Commission said on Wednesday it was ready to launch an investigation into anti-competitive behaviour by Chinese producers of mobile telecommunications equipment, opening a new front in a trade offensive against China. […]

The EU currently has 31 ongoing trade-related investigations, 18 of them involving China. The largest to date is that into 21 billion euros ($27.25 billion) of imports from China of solar panels, cells and wafers, for which it is proposing punitive duties.

The proposed telecoms investigation would mark a new twist in the EU’s trade defence against China because it would be launched by the European Commission itself and not in response to a complaint by industry. Read more here.
 

(Steven Chase – Globe & Mail)

Canada’s Natural Resources Minister is raising the prospect of a trade fight with the European Union over its proposal to label oil-sands crude as dirty even as both sides try to seal a major deal to liberalize two-way.

In Brussels on Wednesday, Natural Resources Minister Joe Oliver said Ottawa would consider launching a complaint with the World Trade Organization, the global referee for commercial disputes, if the EU proceeds with a fuel-quality directive that singles out crude from Canada’s oil sands as the most harmful to the planet’s climate. The directive would effectively slap an import tax on oil-sands crude because refiners who use it would face extra costs. EU refiners are required to cut carbon content in fuels by 6 per cent or pay a penalty.

Ottawa fears the directive would hurt Canada’s ability to open new markets for its oil and depress prices for North American crude. “This fuel-quality directive is discriminatory towards Canadian oil and not supported by scientific facts,” Mr. Oliver said. Read more here.
 

(The Star)

Canada has lost an appeal at the World Trade Organization in a landmark case over incentives for electricity producers, the European Union said on Monday, ahead of the official publication of the appeal decision.

Japan and the European Union brought the case over a scheme intended to promote green energy in the province of Ontario.

They said the incentives were illegal because they discriminated against foreign firms, a complaint that was upheld by a WTO adjudication panel in December 2012.
 

(AFP)

China must fall into line by July 31 with a World Trade Organisation order to change its restrictive policy on certain steel imports from the United States, an arbitrator said Friday.

A WTO dispute settlement hearing decided that Beijing had failed to prove why it needed more time to adapt its rules in order to respect a decision handed down by global commerce’s rule-setting body in November. [...]

The dispute dates back to September 2010, when Washington accused China of breaching trade rules by not providing sufficient evidence that anti-dumping duties were needed on US imports of electrical steel used in the power sector. Read more here.
 

(STR Trade Report)

Effective May 1, the European Union will significantly increase the additional tariffs it levies on certain imports from the United States in response to the continuing distribution of antidumping and countervailing duty revenues to U.S. producers. Women’s denim trousers, which had been dropped from the EU retaliation list several years ago, will be hit with a 26% additional tariff, bringing the total import duty for the period May 1, 2013, through April 30, 2014, to 38%. Additional tariffs on frozen sweet corn, crane trucks, and metal eyewear frames and mountings, which had been set at 6% for the past year, will also be increased to 26%.

In an effort to further discourage unfair trade practices, the Continued Dumping and Subsidy Offset Act, or Byrd Amendment, allowed the distribution of AD/CV duty revenues to affected domestic producers for qualified expenses. Congress repealed the law in 2006 in response to an adverse World Trade Organization decision but specified that AD/CV duties collected on entries made until Oct. 1, 2007, could still be distributed, a process that remains ongoing due to the retrospective nature of the United States’ AD/CV duty system.

The additional tariffs the EU imposes are revised annually in correlation with the amount of AD/CV duty revenues distributed the previous year. U.S. Customs and Border Protection officials say that while the total amount of money available for distribution will decline over time, the specific amounts available from year to year may rise or fall depending on the total amount of AD/CV duties collected, which itself can be affected by a number of factors. For example, the conclusion of litigation affecting a large volume of entries of goods subject to AD or CV duties could result in the liquidation of those entries and therefore the release of a significant sum of duty revenues for distribution. Or, CBP may have been successful in its efforts to recover AD/CV duties that had previously gone uncollected for some reason, which sometimes total in the millions or even tens of millions of dollars.

Distributions of AD/CV duties collected on imports from the 27 EU member states apparently increased from $4.44 million in FY 2011 to $84.4 million in FY 2012, thus prompting the rise in retaliatory tariffs. It is not clear what accounted for this increase or whether it may be repeated in the future, considering that the retaliation amount had previously declined for several years.

ST&R’s U.S. and EU offices are working to help affected companies formulate both short-term tactical and longer-term strategic options. For more information, contact ST&R managing partner Tom Travis at 305-894-1001 or or via email.
 

(Global Post)

Indonesia has eased restrictions on some agricultural imports after the United States complained to the World Trade Organization over Jakarta’s “opaque and complex” rules, the trade ministry said.

The U.S. first raised the issue with the trade body in January, citing Indonesia’s “broad use of import licensing measures that restrict imports” on a range of agricultural products. It criticized the licensing system, which came into force last year, as “opaque and complex”, saying it was inconsistent with Indonesia’s WTO obligations and was having an impact on U.S. exports to the country. Read more here.
 

(UPI)

India has filed a complaint to the World Trade Organization’s dispute settlement body, saying that the United States is offering subsidy programs in the solar industry for local content requirements.

The action, reported by India’s Business Standard newspaper, follows a complaint launched by the United States in February with the WTO regarding India’s National Solar Mission, specifically India’s photovoltaic domestic content requirements policy, which the United States says is discriminatory against U.S. solar manufacturers.

PV Tech reports that the India’s domestic content requirement applies only to crystalline silicon-based modules and thin film is exempt. However, this has resulted in companies importing thin-film technologies to the detriment of its domestic module manufacturers. Read more here.
 

(Bridges Trade)

The WTO appeals process for the high-profile dispute over the Canadian province of Ontario’s feed-in-tariff (FIT) programme for renewable energy officially kicked off in Geneva last week, as the EU, Japan, and Canada all participated in the first round of hearings on the subject.

The Ontario scheme at issue aims to support renewable energy in the province by guaranteeing domestic electricity generators above-market rates on certain renewable sources of energy, such as wind and solar. The WTO challenge had been tabled by the EU and Japan, who had argued that the scheme violates global trade rules because it requires participating electricity generators to source up to 60 percent of their equipment in Ontario. Read more here.
 

(Lisa Guenther – GrainNews)

Talks aimed at easing or lifting trade barriers for southbound Canadian livestock were more productive Thursday in Mexico City than earlier this week in Washington, according to Canada’s Agriculture Minister Gerry Ritz.

Both nations are currently up against the United States on Washington’s planned changes to its mandatory country-of-origin labelling (COOL) law – and if Canada has to resort to retaliatory tariffs, Ritz now warns they may affect other products apart from northbound U.S. beef and pork. […]

Earlier this week Ritz said annual trade retaliation against the U.S. over COOL could add up to $1 billion. Today he said he saw retaliatory measures going beyond U.S. beef and pork. “It’s hard to put retaliatory measures on your allies in this situation, and the American industry is very much on side with us, as I said. They’re facing as much or more hurt at the end of the day,” said Ritz. Read more here.
 

(China Briefing)

With a view to boost domestic demand and promote industrial upgradation across the country, China’s Ministry of Finance, together with three other central departments, released the “Circular on Adjusting the Catalogs Relating to Import Duties for Major Technical Equipment (Caiguanshui [2013] No.14, hereinafter referred to as ‘Circular’)” on March 25, 2013, which scraps import duties and import-related value-added taxes on a range of technical equipment from April 1, 2013. [...]

Among all the listed items, the tax exemptions for solar cell equipment has attracted special attention, as it has been deemed as a positive signal to the China-Europe solar dispute negotiations. Read more here.
 

(PV Magazine)

With the continued growth of trade disputes being reviewed today, the impact on PV industry players (both in the upstream and downstream channels) is expanding to more regions. This comes at a time when potential markets for solar materials/components continue to fluctuate quarter-by-quarter from a PV demand perspective.

Currently, most trade cases involve charges related to (alleged) unfair subsidies either through direct support of domestic manufacturers or through local content restrictions/bonuses. While China features in many of the ongoing trade investigations (both as respondent and petitioner) support of domestic solar PV manufacturing is a far more global issue than it may appear. Read more here.
 

(Specialty Fabrics Review)

Mexico took the first step in an official dispute resolution process through the World Trade Organization (WTO), claiming that China illegally supports its textile and clothing industry under world trade law. The Mexican government claims that China’s textile and clothing policy breaks the WTO’s subsidies and countervailing measures agreement, the general agreement on tariffs and trade, the agriculture agreement and China’s own WTO accession commitments. The U.S. and European Union will join consultations between Mexico and China and are supporting Mexico’s case as third parties. The National Council of Textile Organizations describes the case as a landmark in textile trade.
 

(Reuters)

China expressed “resolute opposition” and “strong dissatisfaction” with a new U.S. cyber-espionage rule limiting imports of Chinese-made IT products, state media reported on Saturday.

The remarks underscore growing tension between the world’s top two economies after the United States accused China of backing a string of hacking attacks on U.S. companies and government agencies. China says the accusation lacks proof and that it is also a victim of hacking attacks, more than half of which originate from the U.S.

The new provision, tucked into a funding bill signed into law on Thursday, requires NASA, as well as the Justice and Commerce Departments, to seek approval from federal law enforcement officials before buying information technology systems from China. Read more here.
 

(Beef Central)

The United States is progressing its World Trade Organisation challenge against trade restrictions imposed by Indonesia on beef and a range of other agricultural imports.

The U.S. has asked the WTO to establish a dispute settlement panel to examine the restrictions applied by Indonesia to a range of horticultural products, animals, and animal products.
The development follows the failure of consultations between the U.S. and Indonesia in late February to reach a resolution.

U.S. Trade Representative Ron Kirk said Indonesia had created “a complex web” of import licensing requirements that, along with quotas, had the effect of unfairly restricting U.S. exports. “These measures appear to be designed to protect Indonesia’s domestic agriculture industry,” Mr Kirk said. Read more here.
 

(RT)

The European Commission has accused Russia of protectionism and threatened to forward the complaint to the World Trade Organization.

The European Commission wants Russia to drop restrictions on exports or face a legal dispute at the WTO ahead of a meeting in Moscow aimed at dealing with a number of troubling matters ranging from Syria to energy, Reuters reports.

EU claims that despite having joined the WTO in August 2012, Russia has kept some protectionist measures, and is even creating new ones, “the majority of which are not in compliance with Russia’s WTO commitments.” These measures place extra barriers to European companies wanting to operate in the Russian market. Read more here.
 

(Reuters)

The United States on Wednesday urged Ukraine not to renegotiate its World Trade Organisation commitments, warning the move could trigger a chain reaction and bring down the whole global trade system.

The former Soviet republic, which joined the WTO in 2008, shocked the trade club last September by announcing plans to raise tariff ceilings on 371 goods using a legal loophole, a move met with virtually unanimous opposition.

Denouncing the criticism as “bullying”, Ukraine’s chief trade negotiator Valery Pyatnytsky said in a newspaper interview this month that Kiev would press ahead with the move.

“We are being told: you have certain rights but you should not exercise them because we do not like that,” Pyatnytsky told the Dzerkalo Tyzhnya newspaper. Read more here.