United States Announces Settlements Of WTO Disputes With Brazil and Indonesia
Jordan Shepherd
In October, the United States settled two long-running disputes at the World Trade Organization (WTO) – one with Brazil over cotton (DS267) and the other with Indonesia over clove cigarettes (DS406).
The dispute with Brazil began with WTO consultations in 2002 and an Appellate Body decision in 2005 finding U.S. subsidies to domestic cotton producers inconsistent with WTO obligations. Thereafter, the parties disputed the U.S. implementation of the rulings until a 2010 framework agreement designed to lead to a settlement. Finally, on October 16, the parties notified to the WTO a mutually agreed settlement, which included a one-time $300 million payment to Brazil to support technical assistance and capacity building. This settlement does not indicate that the U.S. support measures are now WTO-consistent, but it does come after the United States ended $147 million annual payments to Brazil while it reviewed implementation options.
As for Indonesia, the United States tobacco control measure that banned flavors in cigarettes, which prohibited imports of clove cigarettes from Indonesia but exempted domestically-produced menthol cigarettes, was declared a WTO-inconsistent technical barrier to trade by the Appellate Body in 2012. The mutually-agreed settlement with Indonesia, notified to the WTO on October 3, retains the ban on clove cigarettes (which reportedly is not a major concern to the Indonesian industry which has since refashioned clove cigarettes as exempted clove cigars to sell in the United States). This settlement requires that the United States will not unjustifiably discriminate against Indonesian clove cigarettes and will not pursue dispute settlement over an unrelated Indonesian mining rule that restricts exports of unprocessed ores. The settlement also ends the Article 22.6 arbitration over remedies filed by Indonesia (and likely renders moot the related dispute filed by the European Union over its exclusion from Third Party participation in that arbitration).
With these two longstanding disputes finally settled, another 10-plus-year dispute with Antigua and Barbuda over U.S. online gambling restrictions (DS285) remains to be settled, as most recently pointed out by the Prime Minister of the Caribbean island state at the September 2014 United Nations General Assembly meeting in New York.
House Of Representatives Passes Manufacturing Bill
Lauren M. Donoghue
On September 15, 2014, just before Congress went into recess for the midterm elections, the House of Representatives passed H.R. 2996, the Revitalize American Manufacturing and Innovation (RAMI) Act of 2013. RAMI aims to grow U.S. manufacturing by strengthening collaboration between government, educational entities, and industry. The bill would establish within the National Institute of Standards and Technology (NIST) a Network for Manufacturing Innovation (NMI), a series of regionally-based hubs focused on accelerating manufacturing innovation in technologies with commercial applications. Reps. Tom Reed (R-NY) and Joe Kennedy (D-MA) stated that they introduced RAMI as a way to "re-establish the United States as the global leader in manufacturing." The Senate companion bill, introduced by Sens. Sherrod Brown (D-OH) and Roy Blunt (R-MO), passed the Commerce Committee back in April, but it's unclear if it will be taken up by the full Senate before the end of the year.
United States Proceeds With Labor Claim Against Guatemala
Szymon Maziakowski & Clint Long
On September 18, 2014, the Office of the U.S. Trade Representative (USTR) asked an arbitration panel to proceed with litigation against Guatemala under the labor enforcement provisions of the U.S.-Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). The dispute, which is the first labor dispute that the United States has ever brought under a trade agreement, was initiated by six Guatemalan trade unions and the AFL-CIO in 2008 and involves Guatemala's enforcement of labor laws designed to protect workers' rights. USTR initially convened the panel in 2011, then halted its work to pursue a solution with Guatemala, which resulted in an 18-point plan that was signed in April 2013. The United States ultimately found Guatemala's compliance with its commitments under this plan to be unsatisfactory. In the coming months, the United States and Guatemala will submit briefs to the panel, which is expected to hold a hearing in 2015.
Commerce Department Proposes Scope Expansion In Solar Cases
Cole Pfeiffer & P. Lee Smith
The Department of Commerce has provided interested parties the opportunity to comment on a proposed scope clarification that would broaden the range of products subject to the current antidumping investigation on crystalline silicon photovoltaic products from China and Taiwan. The proposed clarifications would favor petitioner SolarWorld Industries America Inc. of Oregon by extending the investigation's coverage to all solar modules exported from China and Taiwan, irrespective of country of origin. The goal of the scope clarification is to prevent China and Taiwan from circumventing current duties by assembling the modules in third countries. The proposed clarification would further expand the scope of this investigation, which was brought to close enforcement loopholes in the scope of the prior case brought on photovoltaic products from China. Final determinations in the antidumping and countervailing duty investigations are expected on December 15, 2014.
