Our yesterday’s stream was primarily dedicated to the Sec. 301 duties imposed within the framework of Trade Act of 1974m, as amended. We discussed specifics surrounding the Sec. 301 challenge currently pending before the Court of International Trade. However, there is a parallel dialogue about the legality of Sec. 301 duties that is taking place within the World Trade Organization (WTO) regime. On September 15, 2020 WTO issued a report which is available at the following link:
WT/DS543/R: United States – Tariff Measures on Certain Goods From China: https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/DS/543R.pdf&Open=True
The report concludes that the U.S. argument for imposition of Sec. 301 duties, namely “public morals” are not adequately explained, and therefore has not demonstrated that Sec. 301 measures are “provisionally justified under Article X(a) of the GATT 1994.”
Essentially, the “public morals” argument reflected the U.S. position in the USTR’s report about “misappropriation of U.S. technology, intellectual property, and commercial secrets.” It remains to be seen how this will play out in the future, whether through WTO appeal or negotiations outside of WTO framework. But, this struggle further underlines the point that we made during the Bretton Woods stream about changes in the paradigm.
