WTO members ‘concerned’ about US tariffs’ effect on global trading

Members of the World Trade Organization (WTO) have voiced concerns about the decision by the United States to impose tariffs on imports of steel and aluminium, and the effect these may have on the global trading system.

More than 40 members, including the 28 nations of the EU, took the floor at the WTO’s Council on Trade in Goods on Friday March 23 to speak against the measures taken by the US.

The US tariffs will have repercussions not only on traders’ commercial interests, but also on the predictability and stability of the rules-based multilateral trading system, according to the organization.

The tariffs were announced earlier this month by US President Donald Trump, at the levels of 25% on steel products and 10% on aluminium goods. They came into effect on March 23.

Speaking at the council, China said that the US measure was inconsistent with the General Agreement on Tariffs & Trade (GATT) and the WTO Agreement on Safeguards.

The Asian nation believes that the US did not take into account information demonstrating how steel and aluminium imports would not affect its national security, and called on the US “to refrain from taking unilateral measures, to follow WTO rules and to uphold the multilateral trading system.”

Russia, meanwhile, said that the new tariffs exceed the bound rates to which the US had committed under WTO rules, and that “it was looking forward to constructive dialogue with the US.”

Russia further noted that several WTO members would be exempted from the new US measures. It sought further clarification on these exemptions and how the tariffs could be justified under the organization’s rules.

On March 22, US Trade Representative Robert Lighthizer said that the US will delay imposing the steel and aluminium tariffs against several countries while negotiations to exempt them more permanently are under way. These included the EU nations, Argentina, Australia, Brazil and South Korea.

The other WTO members that took the floor during the council to raise their concerns about the US trade measures were Japan, Venezuela, Brazil, New Zealand, Turkey, South Korea, Hong Kong, Singapore, Thailand, Pakistan, Norway, Australia, India, El Salvador, Switzerland, Paraguay, Guatemala and Kazakhstan, according to the organization.

In response, the US said that, in its investigations pursuant to Section 232, it had found that quantities of imports and circumstances of global excess capacity for producing steel and aluminium “threaten to impair the national security” of the United States.

WTO director-general Roberto Azevêdo said that he encourages members to continue to work through the organizations’ many forums and mechanisms, to deal with their concerns and to explore potential solutions.

“Actions taken outside these collective processes greatly increase the risk of escalation in a confrontation that will have no winners, and which could quickly lead to a less stable trading system,” he said.

“Disrupting trade flows will jeopardize the global economy at a time when economic recovery, though fragile, has been increasingly evident around the world,” Azevêdo added. “I again call for restraint and urgent dialogue as the best path forward to resolve these problems.”

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