USTR Update on Potential Withdrawal of WTO Tariff Concessions & Increase in Duties In Response to EU Actions on Enlargement
The Office of the U.S. Trade Representative (USTR) has issued an update on the potential withdrawal of certain tariff concessions by increasing general duty rates in the event the U.S. cannot reach agreement with the European Union (EU) for adequate compensation owed under World Trade Organization (WTO) rules as a result of the EU's enlargement in 2004.
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(On May 1, 2004, as part of its enlargement process, the EU raised tariffs above WTO bound rates on certain imports into the countries of Estonia, Latvia, Lithuania, Poland, Slovakia, the Czech Republic, Slovenia, Hungary, Cyprus, and Malta.)
U.S. Must Notify WTO of Concession Withdrawal Within 30 Days of Feb. 1, 2006
USTR sources explain that February 1, 2006 is currently the last day that the U.S. may withdraw concessions (by increasing general duty rates) for certain products in connection with this dispute. The U.S. would be required to notify the WTO no later than 30 days prior to February 1, 2006 of its intent to withdraw substantially equivalent concessions in relation to the issue of EU enlargement. At that time, the USTR would also notify the public of the list of affected goods.
According to USTR sources, the U.S. and EU could again agree to extend this February 1, 2006 deadline as part of their negotiations. The USTR states that although the U.S. government retains the right to withdraw substantially equivalent concessions, it continues to seek a negotiated resolution of the enlargement issue.
HTS Subheadings Potentially Subject to Increased Duties
In September 2004, the USTR issued two notices listing approximately 151 8-digit HTS subheadings from which products affected by possible increased duties would be drawn. These HTS subheadings were taken from the following Chapters: 2, 4-8, 9-13, 15, 16, 18-24, 29, 33, 35, 38, 40, 43-45, 51-53, 70, 71, and 84. Included are such goods as various milk products (including numerous cheeses), bulbs (e.g., tulip, hyacinth, etc.), olives, spices, rye, oats, sausages, chocolate, wine, tobacco, glassware, peaches, mandarins, clementines, etc.
USTR sources state an increase in general duty rates would affect subject goods from the"Column 1" countries, with the exception of free trade agreement (FTA) partners. USTR sources add that the USTR has not yet notified the EU or the public of the amount of retaliation that would be imposed.
(See ITT's Online Archives or 09/13/04 and 09/29/04 news, 04091310 and 04092910, for BP summary of the September 2004 notices containing lists of HTS subheadings from which potentially affected products may be drawn.
See ITT's Online Archives or 10/27/04 news, 04102715, for BP summary of previous USTR update on disputes involving both EU enlargement and the EU's rice import regime.)
USTR Contact - Laurie Molnar (202) 395-3320
USTR Notice (FR Pub 07/14/05) available at http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-13843.pdf