The U.S. lost its appeal of a 2018 World Trade Organization decision that it had not properly calculated countervailing duties for Chinese pipes, tubular goods, solar panels, aluminum extrusions and other items. China had originally challenged the cases in 2016 -- the cases were brought between 2007 and 2012 (see 1805010071). The earlier ruling held that the U.S. was right to say that Chinese state-owned enterprises count as "public bodies" and therefore their actions can be market distorting. The appeal upheld that element of the case, but also upheld the victories for China. The WTO said that Commerce did not prove specificity in the subsidies for the products, and it also could not show how the SOE inputs distorted market prices. It was not allowed to use other countries' prices as reference points to prove market distortions, the WTO said, unless it had specific evidence that government interference in the market warranted that. The appeal said that countries' ability to use other countries' prices in CVD cases is "very limited."
Export Compliance Daily is providing readers with some of the top stories for July 8-12 in case they were missed.
Bipartisan members of the Senate and House introduced a bill on July 16 that would prevent the Trump administration from removing Huawei from Commerce’s Entity List without congressional approval. The bill would also give Congress oversight of Huawei-related export licenses granted by Commerce, allowing Congress to issue a “joint resolution of disapproval” to render any export license inactive.
Global export controls and international sanctions are not stopping luxury goods from entering North Korea, which is employing a significantly larger smuggling scheme than previously known, according to a July 16 report from the Center for Advanced Defense Studies (CADS), a nonprofit research organization in Washington. The 56-page report details how North Korea works with intermediaries, freight forwarders, private financiers and others to smuggle luxury goods into the country. The report also places North Korea’s smuggling system into context: Between 2015 and 2017, at least 90 countries “served as luxury goods procurement sources” for North Korea, the report said.
India is increasing import duties on certain Chinese tires for the next five years, according to a July 10 report from the Hong Kong Trade Development Council. The additional tariff will range between about 9 percent and 17.5 percent, the report said, and will cover eight tariff categories on all “China-sourced radial” tires. The tariffs will apply to “outsized tyres typically required by buses or trucks” and is aimed at helping to boost India’s domestic tire manufacturers. A 12 percent to 18 percent import levy already applied to China-made truck and bus radial tires has been in place since 2017.
Days before Turkey followed through on purchases of Russian S-400 missile parts, a State Department official said there would be “consequences” if Turkey followed through on the deal and warned the country would be at risk of U.S. sanctions. R. Clarke Cooper, assistant secretary of State for political-military affairs, told the Senate Foreign Relations Committee on July 10 that the Trump administration has “made it very clear” to Turkey that the purchase would likely prompt sanctions. Turkey completed the purchase on July 13, according to a Reuters report. A House resolution passed in June also called for the U.S. to impose sanctions on Turkey if it completed the purchase.
The U.S. has not yet delivered the $8 billion in emergency arms sales to Saudi Arabia and the United Arab Emirates it announced on May 24, a State Department official told a Senate committee, causing both Republican and Democratic senators to question why the sales justified an emergency.
The European Union is hailing the completion of a mutual recognition agreement -- in the works for five years -- that the Food and Drug Administration can rely on European inspections of their drugmakers, and vice versa. The July 11 press release framed it as one of the significant goals sought by EU President Jean-Paul Juncker and President Donald Trump when they declared in July 2018 an intention to work toward trade talks and regulatory harmonization.
Legislation aimed an increasing Canada's ability to use safeguard measures to limit import surges "recently cleared the House of Commons and the Senate, and received Royal Assent," said Daniel Kiselbach, a lawyer at Miller Thomson, in a blog post. "The provisions in the enactment lift a two-year moratorium on the imposition of safeguard measures on imports that have previously been subject to safeguard measures," he said. Part of a recent agreement between the U.S. and Canada that led to to lifting of tariffs on steel and aluminum was that the countries may impose tariffs in response to import surges of the metals (see 1905170031).
The Commerce Department is planning to issue multiple guidance documents on its blacklisting of Huawei Technologies due to the large number of questions from U.S. exporters, Commerce officials said during the Bureau of Industry and Security's annual export controls conference July 9-11 in Washington. Officials said the guidance will address the most common questions BIS has received from U.S. industries.