September 23, 2024 Trade Talking Points | Latest insights from EY's Trade Strategy team (September 2024) Executive summary This edition of Trade Talking Points provides updates on the:
WTO Public Forum The WTO held its annual Public Forum from 11 to 14 September in Geneva, Switzerland. Ahead of the meeting, the WTO launched its 2024 World Trade Report, which this year focuses on the impact of trade on income distribution. The Public Forum brought together more than 4,000 trade experts from around the world representing businesses, academia and civil society. Many of the sessions during the forum looked at how to build more sustainable supply chains and promote the role of digital and services trade. Together with International Institute for Sustainable Development and the Geneva Trade Platform, the EY team hosted a roundtable looking at the opportunities for international collaboration on Border Carbon Adjustment regimes and the experiences of businesses. US tariffs The Office of the US Trade Representative has announced the final modifications of tariffs on certain Chinese products as part of the Section 301 investigation. The updates include new timing and rates for tariffs on face masks, medical gloves, needles and syringes; an exclusion for enteral syringes (e.g., to provide nutrition); and a proposal regarding coverage of additional tungsten, wafers, and polysilicon tariff lines. The measures include an exclusion for ship-to-shore cranes ordered prior to 14 May 2024; an expansion of the scope of the machinery exclusions process to include five additional tariff lines and modification of the coverage of proposed exclusions for solar manufacturing equipment. Further information can be found here. Affected businesses should consider contributing to the forthcoming consultation process regarding the machinery exclusions process, as well as regarding the comment period for proposed additional modifications of tariff rates on certain tariff lines. Chinese preferential tariffs for least-developed countries The Chinese government has announced that it will give the majority of least-developed countries (LDCs) zero-tariff treatment for 100% tariff lines as part of the 2024 Summit of the Forum on China-Africa Cooperation (FOCAC). LDCs that do not have diplomatic relations with China will not benefit from this new arrangement. New Supply Chain Resilience pact The United Kingdom, United States and Australia have signed a new Memorandum of Understanding on Supply Chain Resilience. The new pact aims to promote cooperation on data sharing and joint action to build resilience in priority supply chains in order to identify and address risks, threats and disruption to critical supply chains. The three countries will establish a pilot program focused on the telecommunications supply chain to enhance all three countries' knowledge of the vulnerabilities, criticality and residual risks. Further delay to UK border checks on fruit and vegetables The UK government has announced it will extend, from 1 January 2025 to 1 July 2025, an easement of import checks on medium-risk fruit and vegetables imported from the European Union (EU) under the UK Border Operating Model. The UK Department for Environment and Rural Affairs has also changed the risk categorization of certain plants and plant products, meaning that seven commodity groups (including apples and pears) will be recategorized from medium risk to low risk. UK accession to Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Six members of CPTPP have now ratified the UK's accession to the Partnership, which means that entry into force for the UK commences as of 15 December 2024. The UK is the first country to accede to the CPTPP since it was concluded in 2016. The six members that have ratified the UK's accession are Peru, Japan, Singapore, New Zealand, Chile and Vietnam, and it is those countries for whom the UK's accession protocol will initially apply for UK exporters. Once the remaining CPTPP members — Australia, Brunei, Canada, Malaysia and Mexico — ratify the UK's accession then the terms will expand to them. Duties on electric vehicles (EVs) Trade in EVs continues to be subject to considerable scrutiny across a number of different markets. In the EU, the European Commission published a revision to the provisional tariffs imposed on battery EVs from China following the conclusion of its anti-subsidy investigation. The Commission slightly lowered the tariffs it will impose on certain automakers to range from 17% to 36.3%, for example. The Commission will also impose a 21.3% weighted average duty on other Chinese battery EV producers that cooperated in its investigation, and a 36.3% duty on producers that did not cooperate. The European Commission also decided to impose a 9% provisional duty on one automaker. EU Member states are due to vote on the measures prior to 30 October. On 14 August, China requested WTO dispute consultations regarding the EU's anti-subsidy investigation. If consultations are unable to resolve the dispute, then China could request the adjudication of the dispute by a WTO panel. Separately, Canadian Prime Minister Justin Trudeau announced that Canada will impose a 100% tariff on imports of electric vehicles from China beginning on 1 October, and a 25% tariff on imports of steel and aluminum products from China beginning on 15 October. UK-Ukraine Digital Trade Agreement The UK-Ukraine Digital Trade Agreement (DTA) entered into force on 1 September. Businesses can now utilize the provisions contained within the Agreement, which includes commitments on facilitating digital transactions, the free-flow of digital services and increased cooperation on cybersecurity.
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