Members expressed their concerns over possible measures by the United States regarding extra duties on the import of automobiles, including cars, SUVs, vans, light trucks and automotive parts, at the Council for Trade in Goods (CTG) held on 3 and 4 of July. Over 40 members — including the 28 European Union members — took the floor to warn of the “serious disruption” to world markets and the multilateral trading system that may arise as a result of these potential measures, particularly in light of the large proportion of global trade accounted for by these products.
The item was discussed at the request of Japan and the Russian Federation, which were of the view that such measures could trigger a spiral of counter-measures and result in serious disruption to the rules-based multilateral trading system. They recalled that the issue of US investigations under Section 232 provisions has been raised over the past year in several WTO bodies – the CTG and the Committee on Safeguards – only to see things change for the worse. Both Japan and Russia reserved their right to protect their legitimate rights and interests as provided for under WTO rules.
The European Union echoed these concerns and said that there can be no justification for measures to restrict imports of cars, car parts and light trucks on grounds of national security, as there is no apparent economic threat to a US industry which has steadily expanded domestic production over the last 10 years. Any trade restrictive measures in the sector will have a serious negative impact not only on the EU but on the global economy overall, the EU said.
China stressed that the measures at stake mostly involve products for civilian use and that, as such, they do not pose a threat to national security. According to Beijing, these are simply protectionist measures that will significantly distort trade and global value chains and will bring serious challenges to the multilateral trading system. China said it stands ready to work with all WTO members to tackle this challenge and to take concrete action in order to safeguard the authority of the WTO and fight against unilateralism and protectionism.
Other members – Canada, Switzerland, Norway, Turkey, Costa Rica, Hong Kong China, Venezuela, Singapore, Brazil, Korea, Mexico, Qatar, Thailand and India – also raised concerns with the announced US investigation, which in their view will trigger a cycle of measures and counter-measures that will harm all members with negative effects on international trade.
On the impact of the existing US tariffs on steel and aluminium, some members pointed out that the additional tariffs in force since 23 March are already having negative effects on the supply chains, on producers and exporters, on the US downstream industry, and finally on US consumers. It was recognized that there is a serious problem of global overcapacity in the steel and aluminium sectors, but these members noted that import duties at the border will not solve it – it needs to be addressed through dialogue and negotiations in international fora such as the OECD.
In response, the United States said that the US Section 232 investigation on steel and aluminium is an issue that has been referred to the Dispute Settlement Body (DSB) and, therefore, should not belong to the CTG agenda. The US referred other members to the statements made on this issue in the Safeguards Committee, as well as the Dispute Settlement Body, for further information on the US position on this issue.