Global Knowledge®

On Monday the United States filed a complaint with the World Trade Organization against China for its alleged use of unfair subsidies to boost exports from its auto industry.

China gave over $1 billion to its auto part and motor vehicle sectors from 2009 to 2011, which US authorities say has given those exporters an unfair advantage in foreign markets. The program provides considerable subsidies to auto and auto parts producers located in specific regions, called “export bases.” The US argues that these subsidies violate WTO trade regulations because they severely distort trade, especially for producers in the US that compete directly with Chinese auto companies.

“The Obama administration is committed to protecting the rights of nearly 800,000 American workers in our $350 billion auto and auto parts manufacturing sector,” said Ambassador Ron Kirk. “We insist upon having a level playing field on which our world-class manufacturers can compete.”

The US has recently spearheaded a series of WTO enforcement actions against China, including disputes regarding automobiles, poultry products, steel and “rare earths,” a key component in many high-tech industries. The upcoming elections look to place more pressure on the Obama administration to seem tough on China, against Mitt Romney’s pledges to forge free trade pacts and label China a currency manipulator.
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The U.S.-China Economic and Security Review Commission will hold an open public hearing on June 9, 2010.  Taking place in Washington, DC, the hearing (entitled “Evaluating China’s Role in the World Trade Organization over the Past Decade”) will examine the economic, political and security implications of China’s entry into the WTO and its compliance with WTO rules.

According to the World Trade Organization, global trade is set to rebound in 2010 with growth expected at 9.5%.  Exports from developed economies are expected to increase by 7.5%, while shipments from the rest of the world should rise by around 11%.  This strong expansion will help recover some, but not all, of the ground lost in 2009, when global trade contracted by 12.2%.  For more information, click here.

On February 26, 2010, the World Trade Organization circulated a request from the U.S. that the WTO Secretariat compute the export competitiveness of textile and apparel exports from India, in accordance with the Subsidies and Countervailing Measures Agreement, as the U.S. believes India has met the definition of “export competitiveness” for certain products.

Japan submitted a proposal for consideration by World Trade Organization (WTO) members that identifies specific tariff lines coded by the six-digit Harmonized System (HS) 2002.  Included in the proposal were product descriptions of energy efficient goods as well as draft technological and functional standards and implementation methods to identify energy efficient goods at custom authorities.  The proposal will serve as a basis for future discussions to establish harmonized “Energy Efficient Standards” among Member countries.

Brazil has updated duty and IPI rates for 2010.  The following HTS chapters are affected: 27, 44, 85, 87, and 94.  Brazil has also made changes in preferential duty rates with WTO member countries, affecting various products across the tariff.

ARGENTINA

New import certificate requirements have been established for certain products.  The following HTS chapters are affected: 28, 48, 51, 52, 54, 55, 60, 61, 62, 65, 84, and 87. 

BRAZIL

The Tariff Rate Quota has been updated.  The following chapters are affected: 15, 29, 53, and 72.

COSTA RICA

The Tariff Rate Quota available for the second half of 2009 has been updated.  This quota applies to the Dominican Republic, United States, Canada, Panama, Chile, and WTO member countries.  Several products are affected, as well as the following HTS chapters: 02, 04, 07, 10, 11, 12, 15, 16, 17, 20, 21, 22, and 23.

US

The Export Administration Regulations (EAR) have been amended to reflect changes to the Missile Technology Control Regime (MTCR) Annex.  These changes were accepted by MTCR member countries at the November 2008 Plenary in Canberra, Australia.  This rule also clarifies certain EAR controls to properly reflect the intent of changes to items that were accepted by MTCR members at past Plenary meetings.  The following ECN categories are affected: 1, 2, 6, and 7.