Info Service on WTO and Trade Issues (Jan19/01)
Geneva, 14 Jan (Kanaga Raja) – Turkey blocked on 11 January, at a meeting of the WTO Dispute Settlement Body (DSB), a request for the establishment of a dispute panel by the United States over the additional duties imposed by Turkey on certain US products.
The Turkish additional duties were in response to the additional tariffs imposed by the US on imports of steel and aluminium, purportedly under its own trade law for “national security”, but which Turkey viewed in pith and substance as safeguard measures.
The US panel request against Turkey was a first-time request and panel establishment will be automatic when the request comes up again before the DSB.
The DSB has already established five other panels, also at the request of the US, to examine the additional duties imposed on certain US products by Canada, China, the European Union, Mexico and Russia – with all of them viewing the US additional duties on steel and aluminum, claimed to be on its domestic law enabling such duties on national security grounds, to be in pith and substance “safeguard measures”.
In its complaint against Turkey, the US said that on 16 July 2018, it had requested consultations with Turkey with respect to Turkey’s imposition of additional duties with respect to certain products originating in the United States.
The US held consultations with Turkey on 29 August 2018. Following the request for consultations, Turkey amended the additional duties measure to increase the rates of duty for 21 out of the 22 tariff lines affected by the additional duties measure.
On 18 October 2018, the US requested supplemental consultations with Turkey regarding the amended additional duties measure.
The US held supplemental consultations with Turkey on 14 November 2018. Unfortunately, the US said, the consultations have not resolved the dispute.
According to the US communication, Turkey does not impose the amended additional duties measure on like products originating in the territory of any other WTO Member.
Turkey also appears to be applying rates of duty to US imports greater than the rates of duty set out in Turkey’s schedule of concessions.
According to the US, the amended additional duties measure appears to be inconsistent with:
* Article I:1 of the GATT 1994, because Turkey fails to extend to products of the United States an advantage, favor, privilege, or immunity granted by Turkey with respect to customs duties and charges of any kind imposed on or in connecti on with the importation of products originating in the territory of other Members;
* Article II:1(a) of the GATT 1994, because Turkey accords less favorable treatment to products originating in the United States than that provided for in Turkey’s schedule of concessions; and
* Article II:1(b) of the GATT 1994 because Turkey imposes duties or charges in excess of those set forth in Turkey’s schedule.
The amended additional duties measure appears to nullify or impair the benefits accruing to the United States directly or indirectly under the GATT 1994, the US said.
In its statement at the DSB, the US maintained that several WTO Members are unilaterally retaliating against the US for actions it has taken pursuant to Section 232 that, as national security actions, are fully justified under Article XXI of the GATT 1994.
The US claimed that these Members, including Turkey, are pretending that the US actions under Section 232 are so-called “safeguards” and further pretend that their unilateral, retaliatory duties constitute suspension of substantially equivalent concessions under the WTO Agreement on Safeguards.
Just as these Members appear ready to undermine the dispute settlement system by throwing out the plain meaning of Article XXI and 70 years of practice, so too are they ready to undermine the WTO by pretending they are following WTO rules while taking measures blatantly against those rules, the US argued.
“We know even from their own actions that many of these Members do not seriously believe that the US security measures under Section 232 are safeguards,” the US maintained.
Turkey, for example, has not addressed whether its action is in response to an alleged “safeguard” taken as a result of an absolute increase in imports.
If there was an absolute increase, the right to suspend substantially equivalent concessions under the Safeguards Agreement may not be exercised for the first three years of the safeguard measure.
To be clear, the US said, Article XIX of the GATT 1994 may be invoked by a Member to depart temporarily from its commitments in order to take emergency action with respect to increased imports.
The US, however, is not invoking Article XIX as a basis for its Section 232 actions.
Thus, Article XIX and the Safeguards Agreement are not relevant to the US actions under Section 232, and the US has not utilized its domestic law on safeguards to take the actions under Section 232.
Because the US is not invoking Article XIX, there is no basis for another Member to pretend that Article XIX should have been invoked and to use safeguards rules that are simply inapplicable, the US maintained.
The additional, retaliatory duties are nothing other than duties in excess of Turkey’s WTO commitments and are applied only to the US, contrary to Turkey’s most-favoured-nation obligation.
The US will not permit its businesses, farmers and workers to be targeted in this WTO-inconsistent way, it said.
According to trade officials, Turkey expressed regret over the US panel request.
It said that the real reason Members find themselves in this situation today is not because of Turkey’s action but because of the “unwarranted and unjustified” unilateral US actions taken last year, which were intended to protect US producers from the competitive effects of imports.
Like many other Members, Turkey had no other choice but to react, it said.
It pointed out that in imposing its duties, the US made no effort to consult with Turkey on the matter or to maintain a balance of equivalent concessions as required under the WTO’s Safeguards Agreement.
Last August, the US doubled its duties on imports of steel from Turkey without any explanation and threatened to do the same with aluminum imports.
Turkey is fully entitled to take the action it did, it said, adding that it is ready to engage with the US on the matter.
As a result, the US panel request is premature and Turkey is not in a position to agree to the establishment of a panel, it said.
The EU welcomed Turkey’s decision to resort to its right to suspend equivalent concessions against the US.
It said that it looked forward to joining Turkey and others in defending the rules-based multilateral trading system before the panel, if and when it is established.
Turkey is not undermining the WTO system but is standing up to the US abuse of Article XXI of the GATT, the EU said.
In other actions, the DSB adopted two panel rulings, as modified by the WTO’s Appellate Body, over certain measures imposed by Brazil concerning taxation and charges.
The DSB also adopted two compliance panel rulings, as upheld by the WTO’s Appellate Body, which found that the US has brought its “dolphin safe” tuna labelling measures in line with its WTO obligations, thus rejecting an appeal by Mexico against the findings of the compliance panels.