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

In the last quarter of 2021, the United States, the European Union, and the United Kingdom introduced or adopted measures aimed at eliminating illegal deforestation throughout the world.  All three measures recognize the harmful effects of deforestation with regard to climate change and seek to address such effects by prohibiting certain commodities produced on (illegally) deforested land from being placed on their respective markets.  However, there are significant differences among the measures that warrant closer examination as they could have market access implications for companies.

This article sets out the key similarities and differences across the US, EU, and UK anti-deforestation measures, building on Steptoe’s previous posts on the proposed Fostering Overseas Rule of Law and Environmentally Sound Trade Act of 2021 (“FOREST Act”) in the United States, the European Union’s Proposal for a Regulation on Deforestation-free Products (“Proposed Regulation”), and the United Kingdom’s Environment Act 2021 (“Environment Act”).  A more comprehensive analysis of each measure can be found here: US, EU, UK.

Continue Reading Comparing Recent Deforestation Measures of the United States, European Union, and United Kingdom

2022 is shaping up to be a critical year for the Biden Administration regarding U.S. international trade policy.  In 2021, the Biden Administration made headway in resolving some of the challenges with United States’ allies that arose during the last Administration, and trying to build bridges in important regions that had perhaps had been neglected.  But in a number of other critical areas, and arguably in the most significant areas, the Biden Administration made little tangible progress over the past year.  The discussion below offers a look back at the key developments in 2021 with respect to U.S. trade relations with the EU, China, the rest of Asia and North America, and a look ahead at what could come in 2022.

Continue Reading The US International Trade Agenda: A Look Back, A Look Ahead

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 January 25, 2021, the EU-Korea Panel of Experts found that Korea had failed to uphold its labor obligations to “respect, promote, and realise” the right to freedom of association and to take concrete steps to ratify all eight fundamental conventions of the International Labor Organization (ILO). In the final report, the Panel recommended Korea to bring its domestic laws “into conformity with the principles concerning freedom of association” but recognized that Korea had “ma[de] continued and sustained efforts towards ratification of the core ILO Conventions.”[1]

This case marked the EU’s first victory in enforcing labor obligations under the trade and sustainable development (TSD) chapter of the EU’s “new generation” of Free Trade Agreements (FTAs).[2]  The EU adopts the TSD provisions as tools to improve and reinforce the labor and environmental standards of its trading partners – a key policy objective the EU has recently adopted.[3]  Within the last two years, the EU has increased enforcement of TSD obligations in its trade agreements, requesting 3 other TSD consultations,[4] and successfully securing a win against Ukraine for the violation of the TSD environmental obligations under the EU-Ukraine Association Agreement.[5]

Although labor and environmental provisions are not unique to the EU’s “new generation” FTAs, EU-style TSD provisions impose additional and higher obligations, beyond those commonly provided for in the labor and environmental provisions of other model FTAs.  The following example compares the labor provisions of the EU-Korea FTA and the Korea-US (KORUS) FTA to demonstrate the differences in labor standards between these two agreements.

Continue Reading The EU-Korea FTA Labor Dispute: Comparing Labor Provisions Under the EU-Korea FTA and the KORUS FTA

As the Biden Administration settles into its second month in office some signals have emerged that have offered insights into the potential direction of US trade policy. Key trade officials, including United States Trade Representative (USTR) Katherine Tai and Commerce Secretary Gina Raimondo, have testified before the Senate as part of their confirmation processes.  The testimonies and responses of both nominees, in combination with the recently released USTR “2021 Presidential Trade Policy Agenda” report, have provided an early blueprint of the President Biden Administration’s position on current trade issues — including USMCA, potential free-trade agreements, US policy towards China, and the climate agenda – and possible new directions.

The international community has been watching these early indicators closely in order to gauge the likely track of US trade policy.   Professionals from Steptoe’s trade group who practice in major jurisdictions around the world weigh in with their take on how those jurisdictions are reacting to these early signals from the US.

Continue Reading International Responses to President Biden’s Trade Policy Positions

On 1 January 2021, the Japan-UK Comprehensive Economic Partnership Agreement (Japan-UK CEPA) came into force, after only a few months of intense negotiations. Japan and the UK embarked on formal negotiations on 9 June 2020 and reached an agreement in principle on the deal on 11 September 2020. This remarkably speedy achievement reflected enormous pressure from business leaders to have a deal in place before the end of the UK-EU transition period on 31 December 2020, at which point the UK was to lose coverage under the existing Japan-EU Economic Partnership  Agreement (EPA) in light of Brexit.

The Japan-UK CEPA, essentially a “rollover” of the prior Japan-EU EPA, ensures that business between the two countries avoided falling back onto minimum WTO trading terms. Indeed, early data suggest the Japan-UK CEPA accomplished its goal: according to a survey conducted by the Japan External Trade Organization in early 2021, roughly 10% of survey participants already rely on the terms of the Japan-UK CEPA. Moreover, over 80% of other survey participants are considering relying on CEPA in the future.

To fully benefit from the Japan-UK CEPA, importers as well as exporters of goods need to understand how and when they can claim preferential tariff treatment. Once preferential tariff treatment is granted, customs duties will be reduced or eliminated completely on originating goods.

Continue Reading Rules of Origin Under the Japan-UK Comprehensive Economic Partnership Agreement

Since 1 January 2021, the United Kingdom of Great Britain and North Ireland (the UK) has ceased to be part of the Single Market of the European Union (EU).[1]  This date marked the end of the transition period provided for under the Withdrawal Agreement of 31 January 2020 between the UK and the EU.[2] During the transition period, the UK remained in the EU customs territory and thus continued to be integrated into EU trade policy and enforcement actions, including trade remedies. The UK’s departure from the EU at the start of 2021 will have multiple consequences for EU trade remedy investigations and for the EU’s approach to trade remedy measures more generally going forward.

In light of these changes, the EU published a notice on 18 January 2021, laying down some of the practical implications of the UK’s departure.[3]

One immediate consequence of UK’s exit from the EU customs territory is that all trade remedy measures (anti-dumping, countervailing and safeguards) in force on 1 January 2021 will apply going forward only to imports into the 27 member states of the EU from third party States. This will include EU imports of UK originating steel products that are subject to EU steel safeguard measures.[4] Likewise, any new trade remedy measures the EU may adopt after 1 January 2021 following an investigation initiated before or after that date will only affect imports into the EU-27, i.e. excluding the UK.

One complication is imports into Northern Ireland.  Pursuant to Part Three of the Withdrawal Agreement, though theoretically no long part of customs territory of the EU, after 1 January 2021, Northern Ireland will continue to be subject to EU customs procedures and rules, in order to maintain borderless trade flows on the island of Ireland.  EU trade remedy measures will therefore be applicable to goods entering Northern Ireland from outside the EU unless it can be proven that their final sales destination of sales is Northern Ireland. This includes goods entering into Northern Ireland from Great Britain, subject to any future amendments to the rules. The EU will soon make available a separate notice concerning the technical details in this respect.

Continue Reading Practical Implications of Brexit to EU Trade Remedy Investigations and Measures

On 30 December 2020, the European Union and the United Kingdom signed the “EU-UK Trade and Cooperation Agreement” (EU-UK TCA or the Agreement) setting out the terms for their future economic and commercial relations after the UK definitively leaves the EU Single Market and Customs Union on January 1, 2021.

The British Parliament approved the deal by a large majority on the same day. The EU will provisionally apply the Agreement until the European Parliament delivers its approval sometime in February or March.

The Agreement comes after a year of fractious and often acrimonious negotiations. Unsurprisingly, given the context and the premises for the negotiations set down by the UK from the start, the deal is more a divorce agreement than a springboard for closer economic ties.

The latter ambition would be typical in any other trade negotiation: the usual point of trade deals is to facilitate greater fluidity of exchange, and therefore greater economic integration, between two hitherto relatively separate economic spaces.

Yet here, the parties took as a starting point 45 years of deep economic, legal and social integration between the UK and the rest of the EU. Political events in the UK having precipitated its withdrawal from the EU, the EU-UK TCA is the trade equivalent of a separation agreement between an old married couple. The legacy of economic, social and security arrangements going back decades dictate that the “leaving” party cannot make an entirely clean break with its former partner. For its part, the other party seeks to protect its interests, including putting in place mechanisms to manage relations with  its former partner going forward. All of these elements are reflected in the terms of this Great Divorce. And, as is typical of divorce, the immediate effect is likely to leave both parties worse off.

Continue Reading The Brexit Agreement: the Great Divorce

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