Higher Import Duties Could Result from USTR Change
© , Sandler, Travis & Rosenberg, P.A. Originally published in the [02/12/2020] issue of the Sandler, Travis & Rosenberg Trade Report. Reprinted by permission.
A recent regulatory change will make it easier for the U.S. to impose countervailing duties on imports from Brazil, India, Korea, South Africa, and a number of other countries.
Under the World Trade Organization Agreement on Subsidies and Countervailing Measures and U.S. law implementing that agreement, WTO member countries that have not yet reached the status of a developed country are entitled to special treatment for purposes of CV measures. Specifically, the U.S. must terminate a CV duty investigation involving such a country if (a) the amount of the subsidy is two percent or less, compared to the normal de minimis threshold of one percent, or (b) the volume of subsidized imports from that country is less than four percent of total imports, compared to the normal threshold of three percent, unless the aggregate volume of imports from countries whose individual volumes are less than four percent exceeds nine percent (normally seven percent).
In 1998 the Office of the U.S. Trade Representative published a rule designating the WTO member countries eligible for such de minimis treatment. Effective Feb. 10 USTR has removed that rule and revised its list of eligible countries to read as follows. Countries that appear to have been added to the list are in bold.
Central African Republic
Democratic Republic of the Congo
Papua New Guinea
St. Vincent & Grenadines
Countries Removed from List
While the following countries met the designation criterion of having a per capita gross national income of $12,375 or below, they were excluded from the updated list for the following reasons.
Share of world trade more than 0.5 percent – Brazil, India, Indonesia, Malaysia, Thailand, and Vietnam
European Union member – Bulgaria and Romania
Organization for Economic Cooperation and Development member – Colombia and Costa Rica
Group of 20 member – Argentina, Brazil, India, Indonesia, and South Africa
Failure to declare itself a developing country for purposes of the SCM Agreement – Albania, Armenia, Georgia, Kazakhstan, Kyrgyz Republic, Moldova, Montenegro, North Macedonia, and Ukraine
Other countries that appear to have been removed from the list include Antigua & Barbuda, Argentina, Bahrain, Barbados, Belize, Chile, Colombia, Costa Rica, Malta, Panama, St. Kitts & Nevis, Slovenia, Thailand, Trinidad & Tobago, and Uruguay.
For more information on CV duty issues, please contact trade attorney Kristen Smith at (202) 730-4965.