August 13, 2024 Trade Talking Points | Latest insights from EY's Trade Strategy team (August 2024)
US delays higher China tariffs On 30 July 2024, the US Trade Representative (USTR) announced a delay to tariff increases on Chinese imports planned for 1 August 2024, arising from the Section 301 investigation into Chinese non-market practices. This decision is attributed to the receipt of more than 1,100 comments on the proposed tariff hikes, necessitating additional time to review the responses. The final determination is expected to be released sometime in August 2024, with the tariff implementation coming into effect two weeks afterward. The Section 301 investigation took place in May 2024, leading the USTR to propose tariff increases on strategic Chinese imports, including electric vehicles, semiconductors, certain steel and aluminum products, certain medical supplies, certain critical materials and batteries, among others. US-Japan Partnership on Trade meeting From 29-30 July 2024, the US and Japan held the fifth round of meetings under the US-Japan Partnership on Trade. The Partnership on Trade, launched in November 2021, aims to enhance the US-Japan trade relationship through increased bilateral collaboration on trade-related issues. During the meeting, the US and Japan discussed:
Other topics discussed include third-country issues, labor standards in supply chains, regulatory transparency and due process, trade in seafood, and areas for cooperation to increase the global supply of sustainable aviation fuels and feedstocks. WTO's Electronic Commerce agreement A stabilized text of the WTO E-Commerce Agreement was released on 26 July 2024, following five years of negotiations, led by Australia, Japan and Singapore. The release marks the first time that a sub-section of more than 70 WTO Members have produced draft rules covering digital trade. Nine of the initiative's participants are yet to agree to the stabilized text, including the US, Turkiye and Brazil, with "ongoing domestic consultations and considerations" cited as the cause. The E-Commerce Agreement aims to support consumers and businesses involved in digital trade and aid the digital transformation. The agreement will address certain barriers to the growth of digital trade, such as the requirement of many national customs authorities to use paper forms and documents rather than data-based alternatives. Other issues covered by the agreement include personal data protection, online consumer protection and interoperability of electronic systems. Participants in the WTO E-Commerce Agreement must now integrate the agreement into the existing WTO legal framework and undertake domestic ratification of the new rules. Future negotiations are expected on other important issues that have not yet been included in the stabilized text, such as data flows and protection of source code. Latest WTO trade statistics On 31 July 2024, the WTO released its new interactive trade tool, World Trade Statistics 2023, providing insights and trends for goods and services trade in 2023. Last year's trade dynamics highlight a decrease in goods trade due to economic pressures and a robust increase in services trade across various regions. Trade in goods by value experienced a decline of 5% (annual change), as high energy prices coupled with inflation led to a decrease in demand for energy-intensive manufactured goods. Although world merchandise trade volume had increased by 3% in 2022, it declined by 1.2% in 2023. Meanwhile, trade in services increased by 9% (annual change). The US, United Kingdom (UK) and Germany together accounted for more than a quarter of total services exports in 2023. South and Central America, including the Caribbean, experienced the highest regional export growth in commercial services. Asia's and Europe's transport exports fell by 25% and 8%, respectively, largely due to a decline in shipping rates, with these rates returning to pre-COVID-19 levels. 2024 WTO public forum The annual WTO Public Forum will take place from 10-13 September 2024 in Geneva. This year's agenda will focus on re-globalization aiming to create a more inclusive trade environment, ensuring trade gains are shared equally and that benefits reach more people. Three sub-themes will cover digitalization, green policies and services trade. The full Public Forum program is available here. Those interested in attending may register here until 23 August.
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