New EU Action at WTO 'Likely' in 2024, Akin Gump Attorneys Say

Expect new EU action at the World Trade Organization in 2024, four Akin attorneys said in a Jan. 23 blog poost. With the exceptions of 2023 and 2007, the EU has filed at least one complaint every year since 1995, and is expected to "go back on the offensive" by starting at least one or two WTO spats this year, the attorneys said.

One area ripe for EU WTO action concerns U.S. steel and aluminum tariffs. The truce between the two parties on the duties appears shakier than originally expected, evidenced by recent statements from a departing U.S. official, the post said. The EU could turn to the WTO if the U.S. decides to "pursue elements of its proposed" Global Steel Arrangement "on its own."

In addition, the bloc likely will take further action under its revised enforcement regulation, which allows retaliatory measures against WTO members that appeal losing decisions "into the void" due to the defunct Appellate Body. The EU started this procedure following a panel report in the case on Indonesia's duties on raw materials, and it could also take action in its case against India's tariffs on communications goods.

"The EU may be wary of unilateral action against India because of the ongoing EU-India free trade agreement (FTA) negotiations, but not taking action under the revised enforcement mechanism could embolden further non-compliance by India," the attorneys wrote.

In addition, the EU itself might be under scrutiny at the WTO regarding its Carbon Border Adjustment Mechanism. Although various countries have threatened to lodge a complaint, they are either waiting for the implementation of the carbon tax or mulling their own carbon border adjustment tax, Aiken said. The WTO director-general will likely carry on in her efforts to avoid litigation by "encouraging multilateral discussions on global carbon pricing," the post said.

The Akin attorneys also predict that the Multi-Party Interim Appeal Arbitration Agreement (MPIA) will "likely remain dormant" in 2024. While many recent cases were set for MPIA resolution, they avoided the mechanism due to bilateral resolutions or suspensions. Efforts to revise the dispute settlement systems have also prompted hesitation around the MPIA, though should a reform deal fall through, "the MPIA could be called into action late in 2024/early 2025 to resolve appeals of at least two potentially significant disputes between the EU and China." This type of breakdown also would "likely prompt a push to expand the MPIA's membership," the post said.