Following Russia’s military invasion of Ukraine on February 24, 2022, the United States and other major global economies have taken a range of actions to impose economic costs on Russia and Russian interests.  These actions initially consisted of economic sanctions targeting Russian companies and individuals, but have been expanded to include trade in goods.

On March 11, 2022, the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States), as well as the European Union, issued a statement announcing their intention to impose additional economic costs on Russia in response to its military invasion of Ukraine, including with respect to trade in goods.  The joint statement included a range of commitments aimed at isolating Russia from the world’s major economies and global financial institutions, including revoking Russia’s “Most Favored Nation” (MFN) status, which affords Russian imports access to favorable tariff rates among World Trade Organization (WTO) members, and imposing additional restrictions on exports and imports of “key goods and technologies” to Russia.

As discussed below, the United States, the European Union, and the United Kingdom have each taken steps to effectuate the G7 statement.  In addition to revoking Russia’s MFN status, thereby increasing the cost of Russian imports generally, these jurisdictions have all imposed certain product-specific restrictions on the importation and/or exportation of specific goods from and/or to Russia.  In certain instances, these measures have also been extended to cover trade with Russia’s ally Belarus.

 
Continue Reading Major Global Economies Take Aim at Trade with Russia Following Military Invasion of Ukraine

In 2021, the United Kingdom (UK) exited the EU’s legal regime to become an independent entity for trade purposes – given this, the year witnessed the operation of the Trade and Cooperation Agreement (TCA) which governs the relationship between the UK and the European Union (EU), the negotiation of at least two other free trade agreements (FTAs) ( the UK-Australia FTA and the UK-New Zealand FTA), an application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) along with the establishment of the Trade Remedies Authority (TRA) and the issuance of its first decisions.  The present note summarises these key developments (and more) in UK trade over the past year.
Continue Reading UK Trade: A Summary of Developments in 2021

On May 27, 2021, the U.S. Department of Commerce (Commerce) issued its affirmative final determination in the countervailing duty (CVD) investigation of Passenger Vehicle and Light Truck Tires (PVLT) from Vietnam, in which it concluded that the Vietnamese Dong (VND) was undervalued, and that this undervaluation constituted a countervailable subsidy under U.S. trade law. This is only the second CVD investigation in which currency undervaluation, as a form of countervailable subsidy, has been at issue (the other case being certain twist ties from China, see here), and is the first instance where Commerce made a final substantive decision as to the currency undervaluation issue.  For that reason, PVLT from Vietnam establishes new law in several important areas, and is likely to be used as a template for future Commerce decisions in this area.
Continue Reading Currency Undervaluation as a Countervailable Subsidy: The United States Takes Its First Step

On 29 April 2021, the UK’s long-proposed Trade Bill finally received royal assent and became the Trade Act 2021 (the Act).  While the Bill had been introduced in November 2017 by the government of Prime Minister Theresa May and re-introduced in March 2020 by the government of Prime Minister Boris Johnson, its adoption had

On November 24, 2020, the U.S. Department of Commerce (“Commerce”) issued a preliminary affirmative determination in the countervailing duty (“CVD”) investigation of twist ties from China. What is particularly noteworthy about this preliminary determination is Commerce’s decision to countervail the undervaluation of China’s currency, the Renminbi (“RMB”). This marks only the second occasion – following the investigation of Passenger Vehicle and Light Truck (“PVLT”) Tires from Vietnam earlier this year – that Commerce has countervailed a country’s undervalued currency, and the first time it has done so against China. As discussed further below, Commerce’s determination relied on an analysis of the RMB from the U.S. Department of the Treasury (“Treasury”) which differed in meaningful respects from Treasury’s analysis of the Vietnamese Dong (“Dong”) in the investigation of PVLT Tires from Vietnam, suggesting that a less objective, more qualitative analysis may be applied against the RMB in future cases.

Under U.S. law, a subsidy program is countervailable when it meets three criteria. Specifically, the program must constitute (a) a financial contribution provided by a government authority or public body, (b) to a specific firm or industry, that (c) yielded a benefit to the recipient.

The currency undervaluation allegations examined in the PVLT Tires from Vietnam and Twist Ties from China investigations were based on regulations issued by Commerce earlier this year to interpret these terms in the context of currency undervaluation. Regarding the requirement of specificity, Commerce’s new rule provides that enterprises that buy or sell goods internationally (i.e., enterprises in the traded goods sector) may comprise a “group” of enterprises for specificity purposes.Continue Reading Commerce Takes Action Against Allegedly Undervalued Currencies

The European Union (EU) currently has in place a safeguard order against 26 product categories of steel. The EU first adopted a provisional measure in July 2018 and a definitive one in January 2019, the latter having been amended several times. The EU measure places an additional tariff (of 25%) upon the listed steel products where imports exceed a quota (with some country-specific quotas, and other general quotas applicable to other countries). The measure was adopted, in essence, because the European Commission determined that there had been an increase of imports into the EU, caused by unforeseen developments, including the increased use of trade defense instruments globally and in particular the US Section 232 measure of March 2018. The latter measure diverted steel exports to the EU and which threatened to cause injury to the EU steel industry.

Under the Withdrawal Agreement between the EU and the UK, EU safeguard measures currently apply to the UK and will do so until the conclusion of the transition period for the UK’s withdrawal from the EU on 31 December 2020. The UK Government currently has to decide whether to transition existing EU trade remedy measure to equivalent UK measures on 1 January 2021. In the case of the steel safeguard measure, the Government issued a Notice of Determination on 30 September 2020 to transition 19 of the 26 products, with adjustments being made to the level of the quotas for each product category. The EU for its part is in the process of amending its tariff rate quotas in light of the end of the transition period and the UK’s exit from the umbrella of the EU’s safeguard measure.Continue Reading The United Kingdom (UK) Steel Safeguard Transition