TWN Info Service on WTO and Trade Issues (Apr18/16)
24 April  2018
Third World Network
   
Russia joins in seeking consultations on US S.232 actions
Published in SUNS #8667 dated 23 April 2018

Geneva, 20 Apr (Kanaga Raja) - The Russian Federation has now joined what appears to be a growing list of countries seeking consultations with the United States under Article 12.3 of the WTO's Agreement on Safeguards over the additional tariffs imposed by the United States on imports of certain steel and aluminium products.

The request for consultations was submitted by the Russian Federation to the Committee on Safeguards on 19 April 2018.

It thus now joins China, the European Union and India in requesting consultations with the United States over its measures following the Presidential Proclamations on Steel and Aluminium issued by President Donald Trump under Section 232 of the Trade Expansion Act of 1962 imposing additional tariffs on these products.

In imposing the additional duties on steel and aluminum imports (25% for steel and 10% for aluminium) under Section 232, but granting exemptions from the additional tariffs to some of its strategic allies, the US has claimed that it was doing so on grounds of "national security".

However, China, the European Union, India, and now the Russian Federation, have categorically refuted the US claims of instituting these S.232 measures on grounds of "national security", arguing instead that these measures are in essence "safeguard" actions under the WTO's Agreement on Safeguards.

(See SUNS #8656 dated 6 April 2018, SUNS #8660 dated 12 April 2018, SUNS #8664 dated 18 April 2018, and SUNS #8665 dated 19 April 2018).

Meanwhile, the United States has advised the European Union and India that while it was ready to consult with them, the steel and aluminum tariff measures were not "safeguard measures" and thus are not covered by the consultation provisions of the Safeguards Agreement.

In its request for consultations with the United States (G/SG/181), the Russian Federation said that on 8 March 2018, the United States adopted "safeguard" measures on imports of certain steel and aluminium products.

The form of measures is a tariff increase by 25% for steel products and 10% for aluminium products. Measures are effective from 23 March 2018 with unlimited duration.

The Russian Federation underlined that although the United States presented the measures at issue as being adopted to address the threat that imports of steel and aluminium pose to the US national security, "they are in essence safeguard measures," and the Agreement on Safeguards and Article XIX of the General Agreement on Tariffs and Trade 1994 (GATT 1994) are applicable to them.

The Russian Federation also pointed out that the United States did not provide notification to the WTO Committee on Safeguards, under paragraph 1(c) of Article 12 of the Agreement on Safeguards, on taking a decision to apply the safeguard measures.

The Russian Federation said it is a WTO Member that has "a substantial interest" as exporter of the products subject to the safeguard measures.

Therefore, the Russian Federation requests consultations with the United States under paragraph 3 of Article 12 of the Agreement on Safeguards and paragraph 2 of Article XIX of the GATT 1994.

"The aim of the consultations is, inter alia, to exchange views on the measures and to reach an understanding on ways to achieve the objective set out in paragraph 1 of Article 8 of the Agreement on Safeguards," said the Russian Federation.

[Article 12.3 of the WTO Agreement on Safeguards states: "A Member proposing to apply or extend a safeguard measure shall provide adequate opportunity f or prior consultations with those Members having a substantial interest as exporters of the product concerned, with a view to, inter alia, reviewing the information provided under paragraph 2, exchanging views on the measure and reaching an understanding on ways to achieve the objective set out in paragraph 1 of Article 8."

[Article 8.1 states: "A Member proposing to apply a safeguard measure or se eking an extension of a safeguard measure shall endeavour to maintain a substantially equivalent level of concessions and other obligations to that existing under GATT 1994 between it and the exporting Members which would be affected by such a measure, in accordance with the provisions of paragraph 3 of Article 12. To achieve this objective, the Members concerned may agree on any adequate mea ns of trade compensation for the adverse effects of the measure on their trade ."]

In its communication, the Russian Federation suggested holding consultation s as soon as possible and it looked forward to an early reply from the United States in order to agree on the date and venue of the consultations.

"The Russian Federation reserves all its rights under the Agreement Establishing the World Trade Organization and its Annexes, including the Agreement on Safeguards and the GATT 1994," the communication concluded.

US RESPONSE TO EU AND INDIA REQUESTS

Meanwhile, in two separate communications to the European Union and India with respect to their requests for consultations under Article 12.3 of the Safeguards Agreement, the United States said it was "open to discuss" the issue, but on the condition that these discussions would not be under the Agreement on Safeguards.

In its one-page communication to the European Union dated 18 April 2018 (G/SG/178), the United States said that it has received the European Union's request for consultations under Article 12.3 of the Agreement on Safeguards with respect to the Proclamations issued with respect to steel and aluminum on 8 March 2018.

The United States said that the premise for the European Union's request for consultations under Article 12.3 of the Agreement on Safeguards is that the Steel and Aluminum Proclamations are safeguard measures for purposes of that Agreement.

The United States said that the President issued the Steel and Aluminum Proclamations pursuant to Section 232 of the Trade Expansion Act of 1962, under which the President determined that tariffs are necessary to adjust imports of steel and aluminum articles that threaten to impair the national security of the United States.

"These actions are not safeguard measures, and therefore, there is no basis to conduct consultations under the Agreement on Safeguards with respect to these measures," the United States maintained.

The United States said it did not take action pursuant to Section 201 of the Trade Act of 1974, which is the law under which the United States imposes safeguard measures.

It did not submit notifications with respect to these measures because they are not safeguard measures.

"As evidenced by our recent notifications with respect to solar products and washers, the United States is well aware of its notification obligations f or safeguards measures under the Agreement on Safeguards," said the US communication.

Article 12.3 of the Agreement on Safeguards states that a "Member proposing to apply or extend a safeguard measure shall provide adequate opportunity for prior consultations" with Members having a substantial interest in exports of the product concerned.

However, the United States is not proposing "to apply or extend a safeguard measure" with respect to steel or aluminum, and therefore Article 12.3 does not apply, the United States claimed.

Accordingly, the European Union's request for consultations pursuant to Article 12.3 "has no basis in the Agreement on Safeguards".

"Nonetheless, we are open to discuss this or any other issue with the European Union," said the United States.

"Any discussions regarding the Proclamations would not be under the Agreement on Safeguards and would be without prejudice to our view that the Proclamations are not safeguard measures," it maintained.

In a similarly worded communication to India dated 18 April 2018 (G/SG/179) , the United States said that it has received India's request for consultations under Article 12.3 of the Agreement on Safeguards with respect to the Proclamations issued with respect to steel and aluminum on 8 March 2018.

The United States said that the premise for India's request for consultations under Article 12.3 of the Agreement on Safeguards is that the Steel and Aluminum Proclamations are safeguard measures for purposes of that Agreement.

It said that the President issued the Steel and Aluminum Proclamations pursuant to Section 232 of the Trade Expansion Act of 1962, under which the President determined that tariffs are necessary to adjust imports of steel and aluminum articles that threaten to impair the national security of the United States.

"These actions are not safeguard measures, and therefore, there is no basis to conduct consultations under the Agreement on Safeguards with respect to these measures."

The United States said that it did not take action pursuant to Section 201 of the Trade Act of 1974, which is the law under which the United States imposes safeguard measures.

It did not submit notifications with respect to these measures because they are not safeguard measures.

"As evidenced by our recent notifications with respect to solar products and washers, the United States is well aware of its notification obligations for safeguards measures under the Agreement on Safeguards."

Article 12.3 of the Agreement on Safeguards states that a "Member proposing to apply or extend a safeguard measure shall provide adequate opportunity for prior consultations" with Members having a substantial interest in exports of the product concerned.

However, the United States said it is not proposing "to apply or extend a safeguard measure" with respect to steel or aluminum, and therefore Article 12.3 does not apply.

"Accordingly, India's request for consultations pursuant to Article 12.3 has no basis in the Agreement on Safeguards."

"Nonetheless, we are open to discuss this or any other issue with India," said the United States.

"Any discussions regarding the Proclamations would not be under the Agreement on Safeguards and would be without prejudice to our view that the Proclamations are not safeguard measures," the United States maintained.