Joining Forces
According to the WTO on March 6, the EU notified the South Korean and U.S. governments of its intention to participate in their bilateral negotiations the South Korean government requested with regard to the Adverse Facts Available (AFA) provision. The EU claimed that it is an interested party in the negotiations because the provision called into question by the South Korean government is currently applied also to steel products exported to the U.S. from Italy, the Netherlands, Britain, etc.
The AFA provision is to apply a high tariff rate based on adverse information, such as a complainant’s claim, when it is determined that a target company does not submit data requested by the U.S. Department of Commerce or does not cooperate enough in its investigation. The South Korean government made a request for the negotiations on February 14 and initiated a WTO dispute settlement process, claiming that the U.S. government’s application of the provision to South Korean steel and transformers and the resultant high anti-dumping and countervailing duties are in violation of the WTO Agreement.
Russia and Kazakhstan also requested their participation in the bilateral negotiations on March 2 and 1, respectively. Russia said that the United States applied AFA in calculating a dumping margin with regard to carbon and alloy steel wire rods made in Russia to impose tariffs of up to 757% on two Russian manufacturers and the tariffs are negatively affecting its trade by blocking the sale of the wire rods in the U.S. market.
South Korea can get the upper hand in the dispute if the EU and Russia criticize the U.S. for AFA as third parties. For this reason, the U.S. is unlikely to agree to their participation.
Vietnam, in the meantime, requested similar bilateral negotiations with the U.S. on March 2, based on the WTO Safeguard Agreement, regarding its washing machine safeguards. At present, Samsung Electronics and LG Electronics are producing most of their washing machines exported to the U.S. in Vietnam. The South Korean and Vietnamese governments are going to work with each other to handle the safeguards.