Implications of Tariff Exemptions on Australia

This assignment examines the potential effects of tariff exemptions on Australia, considering the country's relationship with the United States and other international trade agreements. It also discusses the implications of President Trump's policies on Australian industries, including those related to steel and aluminum imports. The analysis suggests that while tariffs may have some impact, Australia is likely to be relatively unaffected by exemption from such tariffs.

Running head: INTERNATIONAL TRADE LAW
International Trade Law
Name of the Student
Name of the University
Author note

1INTERNATIONAL TRADE LAW
Introduction
The United States had identified and introduced a legislation that regulated
the composition of petrol to make things around better. The members of the GATT
cannot block the establishment of a panel in the dispute settlement of WTO. The aim
and objective of the WTO is to monitor the rules of international trade rules, settle
disputes and decrease the level of trade barriers. It includes provisions for
monitoring compliance and review. It also consists of the remedies that have
approved counter measures. The contracting parties should be the members of the
International Trade Organization that will not invoke the provisions of the agreement.
The WTO replaced the General Agreement of Tariffs and Trade.
 President Trump taken such drastic measures knowing that the
International repercussions would be enormous
As per the rulings and requirements of WTO, the dispute settlement
body is the central pillar of the trading system. The World Trade
Organization has an unique contribution to the global economy. Then
the legislative efforts took time, the White House enacted the board to
alter the government policies and practice. Despite knowing the
international repercussions, President Trump took drastic steps by
imposing tariff on steel and aluminum1. In this regard, President Trump
imposed 25% tariffs on steel and 10% tariffs on aluminum. Therefore,
these lead to the demise of the WTO and the International Trade. The
new President, Donald Trump assured the biggest tax revolution since
it was difficult to unleash the economic growth by cutting the taxes
across the board. According to Trump, no business of America will pay
1 Jervis, Robert. Perception and misperception in international politics. Princeton University Press, 2017.

2INTERNATIONAL TRADE LAW
more than 15 percent of its profit in tax as compared to the present
majority of 35 percent. However, it was concluded that this concept
was still not clear as to how the tax cuts will be paid2. In this regard, it
is worth noting that according to Donald Trump the imposition of tariffs
on steel and aluminum would safeguard American employment
opportunities in future. However, modern economists stated that with
the imposition of tariffs it will create huge impact on the large scale
users of steel and aluminum which includes oil and automobile
industries. In such process more job opportunities will e destroyed.
Donald Trump had introduced the foreign policy by increasing the
alterations in the spectra of a major change in policy of China by
ensuring them full support from the United States for the policy of
China that has been in existence for a period of four decades. The
General Agreement on Tariffs and Trade contracts the parties and its
former territories. The panels of GATT overruled the popular United
States protection laws that sparked the trade and started an argument
on it. It restricts the contracting parties on any importation of any
products. The impact of trade of trade rules on the controversies
affects and targets the products depending on the process and
production methods. The increased authority of dispute settlement
referred to the situation when the trade disputes carried more weight. It
used to bind the parties and attracted non-compliance sanctions. The
provisions of this Agreement will be applicable to all the metropolitan
customs territories of the contracting parties and to other customs.
2 Dionne Jr, E. J., Norman J. Ornstein, and Thomas E. Mann. One Nation After Trump: A Guide for the
Perplexed, the Disillusioned, the Desperate, and the Not-yet Deported. St. Martin's Press, 2017.

3INTERNATIONAL TRADE LAW
However, for years, the United States was considered to be as the
biggest driving force behind the moves to inspire the international trade
more3. The work of WTO is to regulate more than 98 percent of the
global trade among all the member countries involved in it. The aim
and objective of the WTO is to monitor the rules of international trade
rules, settle disputes and decrease the level of trade barriers. The WTO’s three major principles of governance that are no longer
relevant to the modern day needs of nation states
Some of the principles of governance of WTO are no longer significant
to the modern day need of the nation. Firstly, under the World Trade
Organization, the countries cannot differentiate between the trading
partners. This was a common principle of WTO that cannot be relevant
to the modern demands of the nation states as it is known to every
individual. This principle is known as the most favored nation
treatment4. Countries are allowed to set up free trade agreement that
are only applicable to the goods traded in the group by differentiating
against the group from outside. Every time a country lowers down a
trade barrier for opening a market that has a relation with the same
goods or services from all the existing trading partners. Secondly, the
locally and imported produced goods should be treated equally in
regard to the foreign goods present in the market. The same is
applicable in the domestic and foreign services and also to the local,
patents, copyright and foreign markets. The modern day is already
3 Donald, President. "Withdrawing from the Paris climate agreement hurts the US." NATURE 2.17145 (2017):
17145.
4 Yukins, Christoper R., and Michael Bowsher. "Brexit and the Trump Election: Finding a Way Forward for
Transnational Procurement." Eur. Procurement & Pub. Private Partnership L. Rev. 11 (2016): 258.

4INTERNATIONAL TRADE LAW
aware of these principles and hence it should not be kept registered
under the principles of WTO5. The theory of national treatment stated
that it can be applied once a product of the intellectual property has
arrived at the market. Charging the duty of customs on an import is not
treated to be as a violation of national treatment even when the
products produced locally are not charged an equivalent tax. Thirdly,
Lowering the trade barriers was one the most observable means of
encouraging the trade. These barriers were distressed exclusive of the
custom tariffs and measures such as the ban on import and quotas that
prohibit the quantities selectively. Promising not to increase a trade
barrier can be as significant as lowering one since the promise gave
the businesses a proper view of the future opportunities. Investment is
encouraged and jobs are formed for so that consumers can enjoy the
merits of the competition and go for lower prices. Countries had agreed
to open their markets for the services and goods. These goods got
binded on customs and tariff rate. The tax imports of the countries have
lowered the rates of the bound. In case of the developed countries, the
rates charged and the bound rates are similar. However, this system
has been trying to improve its stability in various ways. These are no
longer relevant to the modern day needs of the United States. The
agreements of WTO needs the governments to clearly state their
policies and practices within the country by informing the WTO.
However, the system of WTO does contribute to the process of
5 Donnan, Shawn, Barney Jopson, and Paul McClean. "EU and others gear up for WTO challenge to US border
tax." Financial Times 14 (2017).

5INTERNATIONAL TRADE LAW
development. The developing countries need to be flexible in certain
time so that they can recruit the agreement of the system6.
 Response of Australia if it is exempted from the tariffs
President Donald Trump had confirmed the news of exempting
Australia from the steel and alumunium tariffs. Mr. Trump’s plan was to
impose such an idea across the world. The United States had granted
Australia an exemption from the new tariffs. Australia is said to be a
small global exporter of steel despite being considered as one of the
world’s largest supplier of raw commodity and iron ore. Both the
countries, Australia and United States had agreed upon the choice of
words7. President Trump highlighted the relationships of trade and
military. Australia bought 60 percent of the military assets from the
United States and allowed the marines of United States to revolve. The
Prime Minister also stressed on the fact that Australia had the closest
possible military and security alliance with the United States. Australia
will not provide anything in return for the exemption as stated by Mr.
Donald Trump. Previously Mr. Trump used praise the commitment to a
fair and reciprocal trade and military relationship8. Australia will always
be considered as one of the biggest losers from the US inspired rise in
the global protectionism. Australia was not affected by the decision of
President Trump since it is considered as a big threat to other countries
and United States that must get redirected at a lower cost price. Jobs
6 Wise, David W. "How Donald Trump is helping to make China great again." USApp-American Politics and
Policy Blog(2017).
7 Talley, Ian, and W. Mauldin. "Trump trade policy expected to seek smaller WTO role in the US." Wall Street
Journal (2017).
8 Jongwanich, Juthathip, and Archanun Kohpaiboon. "Exporter responses to FTA tariff preferences: evidence
from Thailand." Asian‐Pacific Economic Literature 31.1 (2017): 21-38.

6INTERNATIONAL TRADE LAW
also got threatened in the local companies of Australia that made steel
and aluminium. According to the Australian Industry Group Chief
Executive, the exemption was treated to be a positive step but he was
more inclined and interested towards applying steel and aluminium
from Australia and not the Australian companies that produce
overseas. However, the trade tariffs will have a less effect on Australia
economically9. Australia had paid a heavy amount for getting free trade
agreements with the United States The investment of United States in
Australia is evident since the trade of United States is less. Therefore,
Australia is associating itself constructively with other countries for
better future10. Without the leadership and assistance of the United
States, Australia and Japan were able to revive that. Trading with the
United States will cause harm to the economies that are allied to the
United States. From the above discussion it can be concluded that
Australia will not e affected much if they are exempted from the tariff11.
President Trump will be governing all the spheres of International
Trade with the other countries. There will not be plenty of implications if
the country is exempted.
9 Horikawa, Tomoko. "Japan's reaction to the White Australia policy: international society, race relations and
the quest for recognition." (2015).
10 Fukuyama, Francis. "US against the world? Trump’s America and the new global order." Financial times 11
(2016).
11 Scherrer, Christoph, and Elizabeth Abernathy. "Trump’s Trade Policy Agenda." Intereconomics 52.6 (2017):
364-369.

7INTERNATIONAL TRADE LAW
Bibliography
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Trump: A Guide for the Perplexed, the Disillusioned, the Desperate, and the Not-yet
Deported. St. Martin's Press, 2017.
Donald, President. "Withdrawing from the Paris climate agreement hurts the
US." NATURE 2.17145 (2017): 17145.
Donnan, Shawn, Barney Jopson, and Paul McClean. "EU and others gear up for
WTO challenge to US border tax." Financial Times 14 (2017).
Fukuyama, Francis. "US against the world? Trump’s America and the new global
order." Financial times 11 (2016).
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Jervis, Robert. Perception and misperception in international politics. Princeton
University Press, 2017.

8INTERNATIONAL TRADE LAW
Jongwanich, Juthathip, and Archanun Kohpaiboon. "Exporter responses to FTA tariff
preferences: evidence from Thailand." Asian
‐Pacific Economic Literature 31.1
(2017): 21-38.
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Scherrer, Christoph, and Elizabeth Abernathy. "Trump’s Trade Policy
Agenda." Intereconomics 52.6 (2017): 364-369.
Talley, Ian, and W. Mauldin. "Trump trade policy expected to seek smaller WTO role
in the US." Wall Street Journal (2017).
Wise, David W. "How Donald Trump is helping to make China great again." USApp-
American Politics and Policy Blog(2017).
Yukins, Christoper R., and Michael Bowsher. "Brexit and the Trump Election: Finding
a Way Forward for Transnational Procurement." Eur. Procurement & Pub. Private
Partnership L. Rev. 11 (2016): 258.