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Peter Ungphakorn
@CoppetainPU
, 15 tweets, 8 min read Read on Twitter
In case you missed it

Yesterday an arbitration panel authorised the largest ever retaliation in @wto history.

The US can impose tariffs or barriers to services trade on up to $7.5 billion of imports from the EU & member states, including the UK👇🏽

1/13

The US has chosen tariffs rather than barriers on services.

Details and explanations are in that thread (in 1/12 above👆🏽)

and here👇🏽.

It’s worth bearing in mind a number of key points.



2/13
The US has announced retaliation—10% added to tariffs on aircraft, and 25% for other products listed.

It isn’t unilateral. It’s fully legitimate under the WTO’s multilateral system which the UK helped to create & in which the UK is a full member.

ustr.gov/sites/default/…

3/13
The UK has responded👇🏽 (as well as the EU, tweet 10/12).

Will Brexit affect this?

No. The violation occurred while the UK is/was an EU member, some of the subsidies came from the UK, and some of the retaliation specifically targets the UK.

gov.uk/government/new…

4/13
This (and a parallel EU complaint about US subsidies for Boeing) is one of the most complex cases in WTO dispute history.

Are specific actions subsidies? Are they are tied to exporting (illegal)? Do whether they hurt Boeing? How much?

wto.org/english/tratop…

5/13 Screenshot of the top section of the linked page
How complex? It started with a complaint alleging more than 300 subsidies over 40 years

wto.org/english/tratop…

6/13 Screenshot of summary of panel report highlighting over 300 cases in 40 years
After appeal, key complaints against the EU and its member states (including the UK, Germany, France) were upheld

wto.org/english/tratop…

7/13 Screenshot of summary of appeal report, highlighting subsidies from the European Communities (EU) and certain member state governments
Ruling: the subsidies caused Boeing to lose sales worth up to $7.5bn.

So the US is authorised to retaliate on trade worth up to $7.5bn.

The calculation comes from digging deep into actual aircraft sales losses, airline by airline

Download here: wto.org/english/news_e…

8/13 Screenshot of conclusion of arbitration report authorising retaliation against trade worth $7.5bn
How would these additional tariffs be scrapped?

(1) if a “compliance” panel finds that the EU has removed offending subsidies. This is not due out until the end of the year at the earliest.

wto.org/english/tratop…

9/13 Screenshot of case summary, section on compliance proceedings, highlighting that “the compliance panel did not expect to complete its work before the end of 2019”
Or (2) if the US takes up the EU’s offer of a negotiated settlement or new agreement on aircraft subsidies (would the UK be part of that?)

This is included in @MalmstromEU’s statement for the EU.

europa.eu/rapid/press-re…

10/13 Screenshot of the EU's statement highlighting various parts including the invitation to the US to negotiate a new agreement on aircraft subsidies
@MalmstromEU also rejects the idea that the EU will retaliate immediately.

It has a retaliation list, but that’s in the parallel case against US subsidies for Boeing. The EU has decided to wait for an arbitration ruling in that case.

europa.eu/rapid/press-re…

11/13 Same screenshot including highlighting for statement that
The WTO case for the EU complaint against US subsidies for Boeing is DS353 here: wto.org/english/tratop…

12/13 Screenshot of the top of the linked page
Finally, sometimes what’s excluded is as important as what’s excluded

13/13

PS: H/T many, including @bbaschuk @AnaSwanson @ChadBown
@bbaschuk @AnaSwanson @ChadBown And on Brexit, this👇🏽 too, for the EU's case against US subsidies for Boeing.

The EU will be authorised to retaliate — the only question is by how much.

If the UK has left by then, will it simply apply the EU's retaliation tariffs? On what basis?

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More from @CoppetainPU see all

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Peter Ungphakorn
@CoppetainPU
Johnson's Brexit plan: Why customs could be the deal breaker by @tconnellyRTE

@tconnellyRTE We've seen a lot of confusion about what customs checks involve. Everything checked? Nothing checked? In between?

Here's a neat explanation of the UK proposal. Only some consignments are physically checked, all consignments are cleared.

rte.ie/news/analysis-…
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Peter Ungphakorn
@CoppetainPU
OK, @Jim_Cornelius

Does the WTO Airbus case involve only member states’ subsidies (France, Germany, Spain, UK), or the EU’s as well?

The answer lies in the following docs, the main parts totalling 2,535 pages.

Naturally I read the whole lot this morning before lunch:

1/8 Screenshot of text: The documents<br /> • • Original 2010 panel report, WT/DS316/R (1049 pages plus SIX annexes)<br /> • Original 2011 Appellate Body report, WT/DS/316/AB/R, (645 pages)<br /> • Compliance panel report 2016 — has the EU has complied? — WT/DS316/RW (574 pages plus 154-page annex)<br /> • Appellate Body report on compliance, 2018, WT/DS316/AB/RW (267 pages plus 71-page annex)<br /> Total 2,535 pages excluding annexes
Remember, we only want to know:

Do the rulings involve EU subsidies? Or only subsidies by 4 member states (🇫🇷🇩🇪🇪🇸🇬🇧)

The case is here: wto.org/english/tratop…

To find the docs, click “search all documents”. Use the filter buttons on the left of the search result.

2/8 Screenshot of section under
The rulings are very complex. They include eg:

What’s the cumulative effect of several types of subsidies?

If you subsidise in year X how long does the effect last?

What is the state of the market for the types of aircraft concerned and the effect of the subsidies?

etc

3/8
Read 8 tweets
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Peter Ungphakorn
@CoppetainPU
Obscured by today's Brexit stories: the US list of raised tariffs (authorised by WTO members) retaliating for EU Airbus subsidies.

Some are targeted directly at the UK (nesoi = not elsewhere specified or included).

Lots more from section 4 onward: ustr.gov/sites/default/…

1/4 Screen shot of the first part of section 2 (UK)
UK products affected with 25% added tariffs include: whisk(e)y, clothing (including cashmere), sportswear, bedding, books and other printed matter, tools and machinery, liqueurs, meat, many types of cheeses and dairy goods, etc

More background here



2/4
And here:



3/4
Read 4 tweets

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