The Chinese ambassador to the World Trade Organization, Zhang Xiangchen, said his country is willing to discuss the effects of industrial subsidies on trade -- a topic he called contentious and complex -- but he rejected the outlines of an approach the European Union, the U.S. and Japan agreed to in trilateral statements (see 1901090063).

In testimony in Canada's House of Commons, former government chief negotiator Steve Verheul told politicians that there is no surge in Canadian aluminum exports to the U.S., so a return to 10% tariffs on Canadian exports is not warranted. He said the product mix shifted, but the total exports are not up.

Jesus Seade, who led the USMCA negotiations on behalf of the president-elect in Mexico in 2018, said that while the World Trade Organization is a member-driven organization, the director-general should be more than just a facilitator, especially since the body is in crisis.

Testimony by Liz Truss, the United Kingdom's international trade secretary, revealed that no chapters have been closed yet in negotiations with the U.S., and suggests that barriers to U.S. exports of poultry and beef and price controls on pharmaceutical drugs continue to be sensitive areas for the British. Truss was updating Parliament about the second round of negotiations on a free trade agreement with the U.S.

Mexican companies may struggle to comply with U.S.-Mexico-Canada Agreement provisions due to uncertainty caused by the COVID-19 pandemic and confusion about certificate of origin provisions, two former Mexican government officials said. Some Mexican businesses may opt to forgo the preferential treatment under USMCA, which takes effect July 1, and instead pay most favored nation rates on imports until they better understand the agreement’s provisions, the former officials said.

Canada complained at the World Trade Organization that the U.S. has neither proposed a period of time to comply with the ruling on supercalendered paper, nor said whether it will comply with the Dispute Settlement Body ruling at all (see 2002060059). So, as it did in April, Canada is asking for the right to retaliate for the damage done. The complaint was part of the regular Dispute Settlement Body meeting in Geneva on June 29.

The World Trade Organization arbitrator will not announce a decision on the size of retaliatory tariffs on the U.S. over Boeing subsidies until the fall, according to Reuters, citing unnamed sources. The U.S. has already imposed tariffs on European food, beverages, aircraft parts and a few other products, because a WTO arbitrator said the European Union had not come into compliance with a decision that said it gave too-large subsidies to Airbus. The decision had been expected in May or June, and EU officials were hoping that if they were granted the right to retaliate, that would convince the U.S. to negotiate a civil aviation settlement that would lift the U.S. tariffs. Instead, the Office of the U.S. Trade Representative is talking about adding more products to its 25% tariff list (see 2006240017).

One of the nominees for director general of the World Trade Organization, Hamid Mamdouh, told the Washington International Trade Association that the failings of the appellate body are because the WTO has abandoned negotiations. This is the same view held by the U.S., which has brought the issue to a head by killing the appellate body. Mamdouh, a senior counsel at King & Spalding, was speaking during a WITA webinar June 23.

President Donald Trump was wrongheaded for suggesting the U.S. could sever ties with China, a Chinese Foreign Affairs Ministry spokesperson said June 19, according to a press conference transcript in English. “In this era of globalization, the interests of all countries are closely intertwined,” he said. “Global industrial and supply chains are formed and developed in such ways as determined by market forces and business decisions. As such, it is unrealistic and insensible to try to sever them or wish political forces would override economic law. Such practices will not help solve America's domestic problems. Instead, they will only cause more harm to the ordinary American people.” The spokesperson sidestepped questions about whether Trump’s threats could endanger the U.S.-China phase one trade deal. “... the U.S. certainly does maintain a policy option, under various conditions, of a complete decoupling from China,” Trump tweeted June 18, the day after U.S. Trade Representative Robert Lighthizer told Congress decoupling wasn’t a reasonable trade policy.

China’s World Trade Organization challenge to the European Union’s non-market economy treatment of its goods in antidumping duty cases has now fallen further into inactivity. The WTO on June 15 issued a notification that it is disbanding a panel requested by China in 2017 to decide the dispute, one year after China asked the WTO to suspend the panel. Under WTO rules, a panel may only be suspended for a year before its authority lapses. A similar WTO challenge filed by China against its continued non-market economy treatment by the U.S. never made it past initial consultations (see 1612120019 and 1710300043). China had argued in both cases that a provision of its agreement to join the WTO required that all countries treat it as a market economy beginning Dec. 11, 2016.