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TWN
Info Service on WTO and Trade Issues (May25/16) Yerevan, 9 May (D. Ravi Kanth) — United States President Donald Trump on 8 May touted the bilateral trade deal reached with the United Kingdom, while continuing with the 10% tariff on all British goods entering the American market, an agreement that seemingly creates a new normal in global trade by allegedly violating the global trade rules, said people familiar with the development. The UK is the first country to agree to the Trump administration’s condition of a 10% tariff, even though it allegedly violates the sanctity of the scheduled tariff commitments under Article II of the GATT, which was succeeded by the World Trade Organization in 1995, said people, who asked not to be quoted. It remains to be seen how many other countries will reach an agreement with the Trump administration over the unilateral tariffs in the coming days, in the process stymying the WTO and the multilateral trading system, said people familiar with the development. Many details of the US-UK agreement remain to be worked out, with President Trump describing the deal as a “platform” that will grow and change over time. Apparently providing a proverbial “small carrot” to Britain, the US has agreed to reduce its import duty to 10% on a quota of 100,000 cars a year coming from the UK. The deal appears to be a framework agreement, with several issues concerning farm products, especially US beef and chicken products, yet to be resolved. Although the two countries have agreed to “reciprocal” market access for beef, with UK farmers receiving a tariff-free quota of 13,000 metric tonnes, there are still several concerns arising from sanitary and phytosanitary conditions. President Trump said that the deal will do away with the unilateral tariff of 25% that he had imposed on steel and aluminum products from the UK. While the UK has agreed to remove tariffs on US ethanol, its National Farmers’ Union has warned that a flood of ethanol into the British market under the new trade deal could threaten arable farmers that grow crops to produce bio-ethanol, according to a report in the Financial Times on 8 May. In a fact sheet, the White House claimed that the trade deal will significantly expand US market access in the UK, creating a $5 billion opportunity for new exports for US farmers, ranchers, and producers. According to the White House fact sheet, the deal includes more than $700 million in ethanol exports and $250 million in other agricultural products, like beef. Other details of the trade deal highlighted by the White House in the fact sheet include: * It commits the countries to work together to enhance industrial and agricultural market access. * It closes loopholes and increases US firms’ competitiveness in the UK’s procurement market. * It ensures streamlined customs procedures for US exports. * It establishes high standard commitments in the areas of intellectual property, labor, and environment. * It maximizes the competitiveness and secures the supply chain of US aerospace manufacturers through preferential access to high-quality UK aerospace components. * It creates a secure supply chain for pharmaceutical products. Amidst these seemingly grandiose claims, the UK said that the US has agreed to accord preferential treatment on any further tariffs imposed as part of Washington’s Section 232 investigations.
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