RETALIATION STARTS FRIDAY

"We did not want to be in this position.  However, the unilateral and unjustified decision of the US to impose steel and aluminum tariffs on the EU means that we are left with no other choice." 

 

Cecilia Malmström

June 20, 2018

Commissioner for Trade Cecilia Malmström said: "We did not want to be in this position. However, the unilateral and unjustified decision of the US to impose steel and aluminium tariffs on the EU means that we are left with no other choice. The rules of international trade, which we have developed over the years hand in hand with our American partners, cannot be violated without a reaction from our side. Our response is measured, proportionate and fully in line with WTO rules. Needless to say, if the US removes its tariffs, our measures will also be removed."

The EU will rebalance bilateral trade with the US taking as a basis the value of its steel and aluminium exports affected by the US measures. Those are worth €6.4 billion. Of this amount, the EU will rebalance on €2.8 billion worth of exports immediately. The remaining rebalancing on trade valued at €3.6 billion will take place at a later stage - in three years' time or after a positive finding in WTO dispute settlement if that should come sooner.

Whether the United States should have asserted a national security interest in limiting imports of steel and aluminum is an open question, and there are many who feel strongly that this was a grievous mistake.  Still, that is what the U.S. has done, and presumably, U.S. representatives will refer to the relevant provision of the General Agreement on Tariffs and Trade when this issue is taken up in the WTO.  We believe this is GATT Article XXI.

  
The EU will be arguing a different case.  Its WTO submissions and its actions to date are based on an alternative premise, namely that what the U.S. has done has the character of an escape clause action, GATT Article XIX, and should be treated as such.  The nice thing about escape clause actions is that those who are adversely affected by them clearly do have the right to retaliate or "rebalance" things.  To say that these issues will be a challenge for the WTO is an understatement.

June 29, 2018 at the National Press Club.  A week from this coming Friday, the Global Business Dialogue will host a public discussion on the topic:

The title link will take you to the announcement for this event, including the line-up of speakers and registration options.  If you care about these issues, you should be there.

 The GBD quote factory has been closed for almost two weeks.  Down for repairs.  We're still not sure what the problem was.  System overload we suspect.  But we're back in business now.  The challenge in restarting was the obvious question, where to begin?  TTALK Quotes can come from any time, past or present, but we thought we'd start with something from today.  With thanks for your patience and in the hope of hearing from you in the weeks ahead,
                       

With Regret is a link to the EU press release that was the source for today's featured quote.  

 
The EU List is a list of U.S. exports to the EU which could be - and as of Friday some clearly will be - the subject of additional tariffs in the EU.    

 

GATT Article XXI is a link to Article XXI of the General Agreement on Tariffs and Trade, which deals with national security.