Last week, the U.S. Department of Commerce (“DOC”) concluded that the Russian Federation will be considered a non-market economy (“NME”) for future antidumping duty (“AD”) proceedings. This decision reversed the DOC’s 2002 conclusion that Russia was a market economy country, a conclusion that had been reaffirmed by the DOC as recently as 2021. This decision could have significant consequences for companies importing products from Russia subject to AD orders as, generally speaking, the use of the NME methodology results in higher AD margins. As a result, companies involved in certain industries, particularly in the steel, fertilizer and chemical sectors, could feel an impact from this decision after it begins to take effect.Continue Reading U.S. Commerce Department Concludes Russia Is a Non-Market Economy for Antidumping Proceedings
The United States, the European Union, and the United Kingdom are increasingly using trade policy tools as a means to promote certain sustainability goals related to human rights and the environment. For instance, Steptoe covered in a previous post the trade restrictions proposed at the end of 2021 aimed at illegally deforested products. More recently, amidst increasing concerns regarding forced labor in certain regions, the EU has proposed legislation which would ban making available within the EU, and exporting from the EU, products made with forced labor – resembling, to some extent, the forced labor ban that is in place in the US. Meanwhile, the UK has adopted a more piecemeal and geographically targeted approach through the adaptation of existing legislation focused on export controls and the prevention of modern slavery.Continue Reading Measures Banning Products Made with Forced Labor: US, EU and UK Approach
On September 19, 2022, the European Commission (“Commission”) presented the Single Market Emergency Instrument (“SMEI”), a crisis management framework designed to secure supply chains of “identified, strategically important goods and services” within the European Union (“EU”) during times of emergency. The SMEI was introduced as a response to the significant structural issues in the EU’s supply chain of critical goods and services, which were highlighted by the COVID-19 pandemic. Comments on the Proposed Regulation are currently due on December 17, 2022.Continue Reading The EU Single Market Emergency Instrument: Comparing the SMEI Against the U.S. Defense Production Act
On October 12, 2022, the Office of the U.S. Trade Representative announced it would be seeking public comments regarding the effectiveness of the actions related to the Section 301 investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation. The two specific actions under review are the imposition of additional tariffs under Section 301 on products on List 1 and List 2 (covering $34 billion and $16 million in imports as of 2018, respectively), which were subsequently modified by the imposition of List 3 and List 4A (totaling $325 billion in imports as of 2018). This notice marks the next step in the USTR’s “review of necessity,” a statutory-mandated four-year review process. A portal for submitting these comments will open on November 15, 2022, with a deadline of January 17, 2023. Continue Reading USTR Announces Next Steps in Statutory Four-Year Review of China 301 Tariffs
On September 24, 2022, the Office of the United States Trade Representative (USTR) announced the successful resolution of a labor complaint brought under the Rapid Response Labor Mechanism (RRM) of the United States-Mexico-Canada Agreement (USMCA). This case marked the fifth time that the RRM has been invoked since its inception in 2020. The RRM represents the most tangible aspect of the Biden Administration’s worker-centric trade policy. As the number of these cases goes up, companies with production activities in Mexico–and particularly those in the automotive sector–should be mindful of their commitment to their workers’ labor rights. Continue Reading The USMCA’s Rapid Response Labor Mechanism: An Increasingly Important Component of the Biden Administration’s “Worker-Centric” Trade Policy
Since the beginning of the Biden Administration, and particularly since earlier in 2021, U.S. companies and importers have been looking forward to the prospect of a reduction in the tariffs originally imposed in 2018 and 2019 following the Section 301 investigation against China or, at a minimum, a resumption of the exclusion process that was largely suspended in 2020 aside from extensions in limited circumstances. While several avenues for the elimination or reduction of Section 301 duties have presented themselves, to date, none have been adopted. Nevertheless, the coming months may offer several opportunities for U.S. companies interested in reducing their Section 301 duty liability to advocate for relief. Continue Reading Section 301 Duties on Imports from China: Current Status of Prospects for Relief
The much anticipated proposal for a Regulation prohibiting products made with forced labor on the EU market was published by the European Commission (“Commission”) on 14 September 2022, one year after the initiative was first announced by Commission President Ursula von der Leyen in her 2021 State of the Union speech. The proposed forced labor instrument has the potential to significantly impact the supply chains of not only EU companies, but also of any non-EU company that sells products into the EU. The instrument would apply to any company that exports products from the EU or that sells products on the EU market, irrespective of where those companies are based, to which products they are selling, and to which countries and suppliers they source from. Continue Reading The Proposed EU Ban on Goods Made With Forced Labor
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) recently released preliminary guidance on the implementation of a price cap policy on Russian crude oil and petroleum products. This policy has major implications for maritime service providers and maritime supply chains.
The price cap policy will be implemented by the United States, together with the G7 and the EU. The policy has two components: (1) a ban on services related to the maritime transportation of Russian origin crude oil (effective December 5, 2022) and petroleum products (effective February 5, 2022) (collectively referred to as “seaborne Russian oil”), and (2) an exception for services related to shipments of seaborne Russian oil purchased at or below a price cap. The U.S. ban on the importation of Russian crude oil, petroleum, and petroleum fuels, oils and products of their distillation into the United States will remain in place.
The level of the price cap has not yet been set. It will be established by cooperating countries via a consultative process. OFAC anticipates publishing additional, detailed guidance regarding the price cap plan closer to the implementation dates. Continue Reading OFAC Releases Preliminary Guidance on Implementation of the Russian Oil Price Cap
On 29 August 2022, the European Union’s (“EU”) International Procurement Instrument (“IPI”) will enter into force. The IPI was adopted on 23 June 2022 after more than a decade of legislative preparations and discussions. It provides for a new trade policy tool which is designed to address the perceived lack of a level playing field in global procurement markets.
The IPI will enable the European Commission (“Commission”) to impose measures limiting non-EU companies’ access to the EU public procurement market if these companies’ governments do not offer similar access to EU businesses. Specifically, the IPI envisages two types of measures that can be applied: i) a “score adjustment” penalty on tenders submitted by suppliers from the targeted third country; or ii) the exclusion of such tenders from the procurement process. Such IPI measures would be applied following an investigation by the Commission, and after consultations with the country concerned. Continue Reading EU’s International Procurement Instrument to Enter into Force at the End of August
The United States has requested dispute settlement consultations with Mexico under Chapter 31 of the United States-Canada-Mexico Agreement (“USMCA”) concerning a range of energy policies adopted by the Government of Mexico that the United States believes discriminate against U.S. interests in violation of the USMCA. According to a press release issued by the Office of the U.S. Trade Representative Katherine Tai:
Mexico’s policies have largely cut off U.S. and other investment in the country’s clean energy infrastructure, including significant steps to roll back reforms Mexico previously made to meet its climate goals under the Paris Agreement. Mexico’s policy changes threaten to push private sector innovation out of the Mexican energy market. To reach our shared regional economic and development goals and climate goals, current and future supply chains need clean, reliable, and affordable energy.
Canadian Trade Minister Mary Ng has indicated that Canada has joined the United States in challenging these actions through the same dispute settlement mechanism. This is the first time that the United States and Canada have both pursued USMCA dispute settlement consultations with Mexico on policies of mutual concern.