US trade court rules against countervailing duties on Sri Lankan tyres

ECONOMYNEXT – A United States trade court has ruled against countervailing duties imposed on Sri Lankan solid tyre exports after local authorities and a top tyre maker challenged the move, the Ministry of Industry & Commerce said.

“This is Sri Lanka’s first international victory on countervailing duties especially for a well-known rubber product export,“ said Sonali Wijeratne, Director General of the Commerce Department.

The Department of Commerce, in collaboration with the Attorney General’s Department and Camso Loadstar, a big solid tyre exporter in Sri Lanka, made a number of submissions to the US Department of Commerce and the International Trade Commission against the duties.

US industry had filed a countervailing duty petition at the US Department of Commerce (USDOC) and US International Trade Commission (USITC) alleging that producers of off-the-road tires in Sri Lanka benefit from subsidies provided by the government and the subsidized imports cause injury to the domestic rubber industry of the United States.

The US Department of Commerce then initiated a subsidies and countervailing duty (CVD) investigation aiming at imposition of countervailing duty on imports of OTR tyres from Sri Lanka to the United States, the Ministry of Industry & Commerce said in a statement.
 
The USDOC has used the subsidy programs of “exemptions on fiscal levies on capital and intermediate goods”, “Tax Concessions for Exporters of non-traditional products”, and “guaranteed price scheme for rubber given to rubber small holders by the Sri Lankan government” to calculate the countervailing duty margin. 

After the investigations, the US Department of Commerce on January 4, 2017, announced its affirmative final determinations in the CVD investigations and imposed 2.18 per cent countervailing duty on imports of OTR tyres from Sri Lanka.

The margin consisted of 0.41% duty on ‘Exemptions on fiscal levies on capital and intermediate goods’, 0.95% on ‘Guaranteed price scheme for rubber given to rubber small holders’ and 0.82% duty on ‘Tax Concessions for Exporters of non-traditional products’.

The statement said the US Court of International Trade, on 11th July 2018, ruled that the 0.95 percent countervailing duty attributed to the guaranteed price scheme on import of off-road OTR tyres from Sri Lanka be removed.

“As a result, not only 0.95% duty is out but a larger, 2.18% countervailing duty on the imports of OTR rubber tyres from Sri Lanka to the United States too will be eliminated as a result due to the operation of WTO Agreements once the 0.95% duty is removed,” the statement said.
(COLOMBO, July 17, 2018)

 

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