Bipartisan Group of Senators Urges USTR to Adopt Exclusion Process for Third List of Imports Covered By Section 301 Tariffs

Saud Aldawsari

On October 18, 2018, a bipartisan group of Senators sent a letter to the United States Trade Representative (“USTR”) urging the USTR to establish a process for excluding specific Chinese imports from the tariffs imposed on them under section 301 of the Trade Act of 1974.

As we have previously reported, on September 24, 2018, USTR imposed duties under Section 301 on a third list of imports from China, which amounted to an estimated $200 billion worth of imports. Unlike the first and second list of products covered by the tariffs announced by the Trump Administration under Section 301, the USTR has not announced an exclusion request process for the third list of imports from China, which represents the largest volume of imports covered by the tariffs.

In the letter, the bipartisan group of Senators acknowledged that China engages in unfair trade practices that harm American workers and expressed their support for efforts designed “to stop China’s theft of American intellectual property…” However, they expressed their concern that the Section 301 tariffs will have a significant negative effect on the U.S. businesses, consumers, and workers who rely on these imports. Accordingly, they urged the Administration to provide an exclusion process for the third list of imports covered by the tariffs, especially for situations where there is no alternative supplier of the products imported from China. 

The European Union Issues a Formal Proposal to Reform the WTO’s Appellate Body Process

Manuel Sánchez Miranda

As we have previously reported, since 2017, the United States has been blocking the appointment of new members to the World Trade Organization’s Appellate Body (“AB”) because it believes that the AB has not been performing its duties effectively. As a result, there are currently only three sitting members on the AB, which is the minimum number needed to hear an appeal. If no new appointments are made before December 10, 2019 (i.e., when the term of two of the remaining judges concludes), the Appellate Body will be unable to hear new appeals.

To resolve this impasse, on November 23, 2018, the European Union and 11 other WTO Member States issued a formal proposal to amend the rules governing the appellate process at the AB. The proposal, which is designed to address the concerns previously raised by the United States, would amend the AB process to:

• Permit outgoing AB members to complete any appeals they are working on;

•  Ensure that appeal proceedings before the AB are finished within the 90-day timeframe set forth in the WTO rules, unless the parties in the dispute agree otherwise;

•  Clarify that legal issues subject to appeal by the AB do not include the meaning of domestic legislation;

•  Make clear that the AB should only address issues necessary to resolve the dispute; and

• Establish annual meetings between the AB and WTO members to discuss in an open way systemic issues or trends in jurisprudence.

The EU will formally present the proposal at the meeting of the WTO General Council on December 12.

On the same day, the EU, China, and India released a second proposal that would limit Appellate Body members to a single term of 6 to 8 years and would expand the number of members on the AB from 7 to 9. The proposal would also require that the Chairman of the Dispute Settlement Body be authorized to initiate the selection process for a new member of the Appellate Body before the expiration of the prior member’s term of office.