WTO TO SET UP PANELS TO SETTLE TRADE DISPUTES BETWEEN USA, CHINA AND FIVE OTHER COUNTRIES
By Susan Lewis
The World Trade Organization (WTO) is to set up a range of settlement panels to resolve the trade war that has caught the world’s wines and spirits industry.
China, the European Union (EU), Canada, Mexico, Norway and Russia, recently jointly filed complaints with the WTO arguing that the national security claims used by the White House to initiate the tariff row are not defensible.
The WTO’s Disputes Settlement Body (DSB) confirmed last week that it had approved the establishment of disputes settlement panels to rule on whether USA’s initial punishing tariffs and the retaliatory duties imposed by the six countries on US goods had broken WTO rules.
The tariff row started earlier this year when the USA imposed wide ranging punishing tariffs on Chinese goods as well as on steel and aluminium imports from the other five countries.
The six countries then retaliated with a swathe of punishing tariffs on US goods, the world’s wines and spirits industry was unlucky to have been caught in this tit-for-tat trade dispute.
China responded by levying 25% tariffs on Californian wine and American whisky. EU and Mexico imposed a 25% duty on American whisky while Canada levied a 10%.
Zhang Xiangchen, China’s ambassador to the WTO, said the national security exemption “should not be used in an abusive way.”
Maria Asenius, chief of staff to European Trade Commissioner, told reporters that if the USA keeps using the national security excuse for penalties on a diverse array of imports, then “You don’t have any rules anymore in the WTO.” She added that the EU would launch further complaints if USA imposes punishing tariffs on French wine, automobiles and car parts.
The White House accused the complainants of “hypocrisy” because they are ready to “undermine the dispute settlement system,” but then they want to “pretend to follow its rules.”
The EU had been a strong export market for American whisky, in part because US and France had been mutually duty-free since 1997. US bourbon sold in France used to be taxed the same as spirits that are distilled locally there.
Total US spirits exports to the EU last year were valued at USD789 million; 85 percent of that was American whisky, according to the Distilled Spirits Council of USA.
By comparison, American spirit exports to China have grown from less than USD1 million in 2001, when China joined the WTO, to USD12.8 million last year.
(The writer can be contacted at: SusanLewis@thewinechronicle.com)
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