Obama Administration requests special WTO meeting to adopt compliance panel report finding that massive European subsidies for Airbus breached WTO obligations
United States Trade Representative also requests special WTO meeting to adopt panel and appellate report findings that India’s policies discriminate against U.S. solar products
Washington, D.C. – Following two major U.S. trade enforcement victories at the World Trade Organization (WTO), United States Trade Representative Michael Froman today announced that the Obama Administration will press for the rapid enforcement of those findings in a special meeting of the WTO’s Dispute Settlement Body. The Office of the United States Trade Representative (USTR) has requested that, at that meeting, the WTO adopt the compliance panel report in the successful U.S. challenge against European subsidies for Airbus large civil aircraft. USTR has also requested that the WTO adopt the panel and appellate reports in the successful U.S. challenge against Indian local content requirements that discriminate against U.S. solar cells and modules.
"We will not tolerate our trading partners ignoring the rules at the expense of American workers and their families," said Ambassador Froman. "We need to resolve these disputes once and for all. The Obama Administration is strongly committed to enforcing the rights of the United States under our trade agreements and we will use every tool at our disposal to expedite these cases for the benefit of American businesses and workers."
On September 22, 2016, a WTO compliance panel found that the European Union (EU), Germany, France, the United Kingdom, and Spain breached WTO rules by giving Airbus billions of dollars in additional subsidies that are continuing to cause tens of billions of dollars in harm to U.S. exporters. Today, the Obama Administration requested a special meeting of the WTO Dispute Settlement Body to ensure that this report takes effect as soon as possible. The EU could seek to appeal the compliance panel’s findings, but the United States has urged them instead to accept the panel’s findings and negotiate a settlement to remove all of the WTO-inconsistent subsidies so that American exporters can compete on a level playing field.
On September 16, 2016, the WTO Appellate Body found in favor of the United States in a dispute challenging India’s domestic content requirements for solar cells and modules under India’s National Solar Mission. The appellate report affirmed a February 2016 WTO panel report finding that India’s domestic content requirements breach international trade rules because they prohibit Indian solar power developers from using solar cells and modules made in the United States in certain projects. Since India enacted these requirements in 2011, American solar exports to India have fallen by more than 90 percent. By requesting the WTO to adopt the reports, the United States is pushing to stop India’s discrimination against U.S. solar exports sooner rather than later.
Additional Information about the United States’ Recent WTO Victories
Large Civil Aircraft: On September 22, USTR achieved an important victory in its World Trade Organization (WTO) dispute with the European Union (EU) and four of its member States regarding subsidies to Airbus. A WTO compliance panel confirmed that the EU did not come into compliance with respect to subsidies previously found to have caused adverse effects to the United States, and the EU further breached WTO rules by granting more than $4 billion in new subsidized financing for the A350 XWB – causing tens of billions of dollars in additional adverse effects to the U.S. industry. In total, the panel found that there have been nearly $22 billion in subsidized financing from the EU and Germany, France, the United Kingdom, and Spain, and continuing lost U.S. exports worth tens of billions of dollars.
The compliance panel found that since 2006, subsidies to the Airbus A320 family of aircraft resulted in the displacement or impedance of Boeing 737s in the EU, Australia, China, and India markets, as well as lost sales of 271 737s.
In the twin-aisle market, which includes Boeing’s 767, 777, and 787, the panel found that the subsidies benefitting the A330, A340, and A350 XWB caused displacement or impedance of Boeing aircraft in the EU, China, Korea, and Singapore markets, as well as lost sales of 50 Boeing aircraft.
When it came to the largest aircraft, the panel found that subsidies benefitting the A380 caused displacement or impedance of Boeing 747s in the EU, Australia, China, Korea, Singapore, and UAE markets, as well as lost sales of 54 Boeing aircraft.
Solar Cells and Modules: In February 2016, a WTO panel issued its report agreeing with the United States that India’s domestic content requirements in its National Solar Mission discriminate against U.S. solar cells and modules. India’s localization barriers require solar power developers to use Indian-manufactured cells and modules in certain projects, in breach of international trade rules against discrimination. In April, India appealed the report of the panel.
On September 16, the Appellate Body circulated a report that affirmed the Panel’s finding that India’s domestic content requirements under its National Solar Mission are inconsistent with India’s national treatment obligations. Because an Indian solar power developer may bid for and maintain certain power generation contracts only by using domestically-produced equipment, and not by using imported equipment, India’s requirements discriminate against imported solar cells and modules in favor of Indian solar cells and modules.
Under WTO rules, because the United States has requested adoption of the panel and appellate reports within 30 days of circulation of the Appellate Body report, the reports will be adopted automatically by the WTO.
Obama Administration’s Trade Enforcement Record
Today’s action underscores the Obama Administration’s strong record of enforcing the rights of the United States under our trade agreements. Since 2009, USTR has brought 23 enforcement actions at the WTO. The United States has won every one of these disputes decided thus far. This reflects the Administration’s commitment to trade enforcement and indicates the resolve that the United States would bring to enforce the high standards won in the Trans-Pacific Partnership (TPP), ranging from market access for United States agriculture exports, labor and intellectual property rights, protection of the environment, and keeping the internet free and open.
- Since President Obama was inaugurated in 2009, USTR has filed 23 enforcement complaints (including this one) at the World Trade Organization (WTO) – more than any other WTO Member. The United States has won every single one of those complaints that has been decided by the WTO so far.
- Obama Administration has brought 14 trade enforcement challenges against China, three against India, and several other complaints against a series of major economies including Indonesia, Argentina, the Philippines, and the European Union. To ensure the greatest economic benefits for American workers and exporters, the Obama Administration has used our trade enforcement actions to emphasize opening these large, strategic markets to which the United States exports a diverse array of products and services.
- Since 2015, in addition to announcing 5 new WTO challenges, the Obama Administration announced 6 enforcement wins on key matters:
- European Subsidies for Large Aircraft – In September 2016, a WTO compliance panel issued a report finding that the European Union, Germany, France, the United Kingdom, and Spain had not come into compliance with WTO rules with respect to subsidies the WTO previously found to have caused adverse effects to the United States. The compliance panel also found that these European governments further breached WTO rules by granting more than $4 billion in new subsidized financing for the A350 XWB – causing tens of billions of dollars in additional adverse effects to the U.S. industry.
- India’s Solar Localization Rules – In September 2016, the WTO Appellate Body found in favor of the United States in a dispute challenging India’s “localization” rules discriminating against imported solar cells and modules under India’s National Solar Mission. The appellate report affirmed a February 2016 WTO panel report finding that India’s domestic content requirements discriminate against U.S. solar cells and modules by requiring solar power developers to use Indian-manufactured cells and modules, in breach of international trade rules.
- China’s Export Subsidy Program – In April 2016, China signed a Memorandum of Understanding with the United States in which China agreed to take specific actions that would remove all the WTO-inconsistent elements of its “Demonstration Bases-Common Service Platform” export subsidy program. Those prohibited export subsidies were being given to manufacturers and producers across seven economic sectors and dozens of sub-sectors located in more than one hundred and fifty industrial clusters throughout China, thereby creating unfair competition for American workers and businesses.
- China’s Duties on High-Tech Steel – In July 2015, the United States prevailed in a WTO challenge to China’s compliance actions following WTO findings in 2012 that China’s duties on high-tech steel were inconsistent with WTO rules. Those WTO-inconsistent duties contributed to over $250 million in annual export losses for American steel exporters. The U.S. compliance challenge was the first time any WTO Member had initiated a WTO proceeding to challenge a claim by China that it had complied with adverse WTO findings.
- India’s Ban on U.S. Agricultural Products – In June 2015, the WTO found in favor of the United States in a dispute challenging India’s ban on various U.S. agricultural products – such as poultry meat, eggs, and live pigs – allegedly to protect against avian influenza. The WTO agreed with the United States that India’s ban breached numerous international trade rules, including because it was imposed without sufficient scientific evidence and was not based on international standards, which confirm that importing U.S. products is safe.
- Argentina’s Import Licensing Requirements – In January 2015, the WTO found that Argentina’s import licensing requirements and other import restrictions breach international trade rules. These restrictions potentially affect billions of dollars in U.S. exports each year, including exports of energy products, electronics and machinery, aerospace equipment, pharmaceuticals, precision instruments, medical devices, motor vehicle parts, and agricultural products.
- European Subsidies for Large Aircraft – In September 2016, a WTO compliance panel issued a report finding that the European Union, Germany, France, the United Kingdom, and Spain had not come into compliance with WTO rules with respect to subsidies the WTO previously found to have caused adverse effects to the United States. The compliance panel also found that these European governments further breached WTO rules by granting more than $4 billion in new subsidized financing for the A350 XWB – causing tens of billions of dollars in additional adverse effects to the U.S. industry.
- Enforcement extends far beyond formal disputes. The Obama Administration has opened markets for American workers, farmers, and businesses by taking tough stands to resolve unwarranted trade barriers with trading partners. For example, we have eliminated BSE-related restrictions in 16 countries since January 2015, gaining additional market access for U.S. beef in Brazil, Colombia, Costa Rica, Egypt, Guatemala, Iraq, Lebanon, Macau, New Zealand, Peru, Philippines, Saint Lucia, Singapore, South Africa, Ukraine, and Vietnam. As a result, U.S. beef exports have recovered to pre-2003 levels. We also successfully engaged with the Philippines – including through the Special 301 process – to enhance protection of intellectual property rights. These and similar actions have helped expand exports and level the playing field for American goods and services.
