[CTC] 𝗧𝗮𝗶: 𝗨.𝗦. 𝘀𝘁𝗲𝗲𝗹 𝗽𝗿𝗼𝗽𝗼𝘀𝗮𝗹𝘀 ‘𝗱𝗲𝘀𝗶𝗴𝗻𝗲𝗱 𝘁𝗼 𝘄𝗶𝘁𝗵𝘀𝘁𝗮𝗻𝗱 𝗪𝗧𝗢 𝘀𝗰𝗿𝘂𝘁𝗶𝗻𝘆’

[Arthur Stamoulis]

𝗧𝗮𝗶: 𝗨.𝗦. 𝘀𝘁𝗲𝗲𝗹 𝗽𝗿𝗼𝗽𝗼𝘀𝗮𝗹𝘀 ‘𝗱𝗲𝘀𝗶𝗴𝗻𝗲𝗱 𝘁𝗼 𝘄𝗶𝘁𝗵𝘀𝘁𝗮𝗻𝗱 𝗪𝗧𝗢 𝘀𝗰𝗿𝘂𝘁𝗶𝗻𝘆’ 
By Oliver Ward, Inside US Trade
September 22, 2023 at 2:53 PM

U.S. proposals for how to structure a global arrangement on sustainable steel and aluminum with the European Union are compatible with World Trade Organization rules and have been “designed to withstand WTO scrutiny,” U.S. Trade Representative Katherine Tai argued on Friday.

Speaking virtually during the Atlantic Council’s Transatlantic Forum on GeoEconomics in Berlin, Tai pushed back against arguments that U.S. proposals would discriminate against other countries, in violation of WTO rules.

“There's a sort of disquiet in Europe with a U.S. policy which seems to undermine the concept of a global rule-based order,” moderator Bloomberg Executive Editor for Economics Stephanie Flanders said, a sentiment that Tai called “absolutely not fair.”

“I really bristle at this narrative that the United States would put forward a proposal that is WTO-inconsistent,” Tai said. “There is no WTO rabbi who sits and pronounces whether or not a measure that's being advanced by a WTO member is kosher or not. I think that when we put forward measures, we all try to ensure that we are working within the rules-based order.”

In October 2021, the U.S. and the EU struck a deal to lift Trump-era tariffs (and EU retaliatory tariffs) on steel and aluminum, converting them to tariff-rate quotas. That deal is set to expire at the end of 2023 if the two parties cannot come up with an accord, which they have termed a global arrangement on sustainable steel and aluminum trade. They have set an October deadline to strike that deal.

Tai and European Commission Executive Vice President and Trade Commissioner Valdis Dombrovskis have been meeting monthly since the beginning of the year to further the negotiations; in August, they agreed to accelerate talks. Earlier this summer, Dombrovskis insisted that the EU would not agree to any deal that breaches WTO rules.

Tai acknowledged that asserting that legislation is compatible with WTO rules does not make it immune from challenges. She cited Europe’s carbon border adjustment mechanism, slated to take effect on Oct. 1, as an example of legislation the EU believes is in line with its WTO commitments but will face challenges in Geneva. However, she stressed that “proposals that we have put on the table and shared with Brussels are ones that we also feel we have designed to withstand WTO scrutiny.”

“In our negotiations, it became very clear that our levels of tolerance, or our comfort level with different types of defenses, are different on a Washington and Brussels basis,” Tai said, adding that the U.S. had adapted its position in negotiations to “try come towards Europe in terms of its WTO argumentation and defense comfort.”

The U.S. and the EU want the steel deal they’re negotiating to establish a global consortium of countries that will catalyze decarbonization in the two industries, a goal Tai reiterated during the discussion.

“Our vision is that once the U.S. and the EU can agree that we then bring in other like-minded parties and try to create a paradigm,” Tai said, arguing that over time, such an agreement could raise environmental standards while promoting fair trade based on market principles. “The more fairly you are producing your steel and aluminum,” she said, “the more we treat you the way that we will be treating each other.”

In a concept paper sent to Brussels last year, Washington proposed a tiered tariff regime that would favor economies that meet certain emissions criteria, ultimately supplanting the EU’s carbon border adjustment mechanism for U.S. steel and aluminum exports to European countries. The EU counterproposal would allow members of the arrangement to adopt “border-related measures” – compatible with international rules – on carbon-intensive steel and aluminum imports; the EU also called for the U.S. to lift its steel and aluminum tariffs.

“This is one of the most consequential engagements and negotiations that we are engaged in, one of the most important between the U.S. and the EU, and I remain very hopeful that we will have something to show the rest of the world in the next six-week period,” Tai concluded. -- Oliver Ward (oward at iwpnews.com <mailto:oward at iwpnews.com>)

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826



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