2024-19248. WTO Dispute Settlement Proceeding Regarding United States; Certain Tax Credits Under the Inflation Reduction Act (China)

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Office of the United States Trade Representative

1. [Docket Number USTR-2024-0014; Dispute Number DS623]

AGENCY:

Office of the United States Trade Representative.

ACTION:

Notice and request for comments.

SUMMARY:

The Office of the United States Trade Representative (USTR) is providing notice that China has requested the establishment of a dispute settlement panel under the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement). USTR invites written comments from the public concerning the issues raised in this dispute.

( print page 68699)

DATES:

Although USTR will accept any comments during the course of the dispute settlement proceeding, you should submit your comment on or before September 26, 2024 to be assured of timely consideration by USTR.

ADDRESSES:

USTR strongly prefers electronic submissions made through the Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments in Section III below. The docket number is USTR-2024-0014. For alternatives to submission through regulations.gov, please contact Sandy McKinzy at [e-mail] or 202.395.9483.

FOR FURTHER INFORMATION CONTACT:

Associate General Counsel Erin Rogers at [e-mail], or 202.395.9126.

SUPPLEMENTARY INFORMATION:

I. Background

Section 127(b)(1) of the Uruguay Round Agreements Act (URAA) (19 U.S.C. 3537(b)(1)) requires notice and opportunity for comment after the United States submits or receives a request for the establishment of a WTO dispute settlement panel. Pursuant to this provision, USTR is providing notice that China has requested the establishment of a dispute settlement panel pursuant to the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes.

II. Major Issues Raised by China

On March 26, 2024, China requested consultations with the United States concerning certain clean energy tax credits in the Inflation Reduction Act, Public Law 117-169 and related implementing guidance. You can find the consultation request at www.wto.org in a document designated as WT/DS623/1. The United States and China held consultations on May 7, 2024. On July 15, 2024, China made its request to the WTO to establish a WTO dispute settlement panel. You can find the panel request at www.wto.org in a document designated as WT/DS623/3.

China's panel request concerns aspects of five tax credits created or amended by the Inflation Reduction Act, and related implementing guidance issued by the U.S. Department of the Treasury and the Internal Revenue Service, and the U.S. Department of Energy. The five tax credits are: the Clean Vehicle Tax Credit (Internal Revenue Code Sec. 30D); the Investment Tax Credit for Energy Property (Internal Revenue Code Sec. 48); the Clean Electricity Investment Tax Credit (Internal Revenue Code Sec. 48E); the Production Tax Credit for Electricity from Renewables (Internal Revenue Code Sec. 45); and, the Clean Electricity Production Tax Credit (Internal Revenue Code Sec. 45Y). With respect to the Clean Vehicle Tax Credit, China cites the North American assembly requirement, the critical minerals sourcing requirement, the battery components requirement, and the disqualification related to foreign entities of concern. With respect to the remaining tax credits, China cites the domestic content bonus credit requirements. China alleges that these measures are inconsistent with Article III:4 of the WTO General Agreement on Tariffs and Trade 1994 (GATT 1994); Articles 2.1 and 2.2 of the WTO Agreement on Trade-Related Investment Measures; and Articles 3.1(b) and 3.2 of the WTO Agreement on Subsidies and Countervailing Measures. With respect to the Clean Vehicle Tax Credit, China also alleges that the measure is inconsistent with Article I:1 of the GATT 1994.

III. Public Comments: Requirements for Submissions

USTR invites written comments concerning the issues raised in this dispute. All submissions must be in English and sent electronically via regulations.gov. To submit comments via regulations.gov, enter docket number USTR-2024-0014 on the home page and click `search.' The site will provide a search-results page listing all documents associated with this docket. Find a reference to this notice by selecting `notice' under `document type' and click in the `refine document results' section on the left side of the screen and click on the link entitled `comment.' For further information on using regulations.gov, please consult the resources provided on the website by clicking on `How to Use Regulations.gov ' on the bottom of the home page.

Regulations.gov allows users to provide comments by filling in a `type comment' field, or by attaching a document using an `upload file' field. USTR prefers that you provide comments in an attached document. If a document is attached, it is sufficient to type `see attached' in the `type comment' field. USTR prefers submissions in Microsoft Word (.doc) or Adobe Acrobat (.pdf). If the submission is in an application other than those two, please indicate the name of the application in the `type comment' field. If you need assistance uploading your comment(s), please call the regulations.gov helpdesk at 1.877.378.5457, Option 2.

For any comments submitted electronically that contain business confidential information (BCI), the file name of the business confidential version should begin with the characters `BCI'. Any page containing BCI must be clearly marked `BUSINESS CONFIDENTIAL' on the top and bottom of that page and the submission should clearly indicate, via brackets, highlighting or other means, the specific material that is BCI. If you request business confidential treatment, you must certify in writing that the information would not customarily be released to the public.

Filers of submissions containing BCI also must submit a public version of their comments. The file name of the public version should begin with the character `P'. The `BCI' and `P' should be followed by the name of the person or entity submitting the comments or rebuttal comments. If these procedures are not sufficient to protect BCI or otherwise protect business interests, please contact Sandy McKinzy at [e-mail] or 202.395.9483 to discuss whether alternative arrangements are possible.

USTR may determine that information or advice contained in a comment, other than BCI, is confidential in accordance with section 135(g)(2) of the Trade Act of 1974 (19 U.S.C. 2155(g)(2)). If a submitter believes that information or advice is confidential, they must clearly designate the information or advice as confidential and mark it as `SUBMITTED IN CONFIDENCE' at the top and bottom of the cover page and each succeeding page, and provide a non-confidential summary of the information or advice.

Pursuant to section 127(e) of the URAA (19 U.S.C. 3537(e)), USTR will maintain a docket on this dispute settlement proceeding, docket number USTR-2024-0014, accessible to the public at www.regulations.gov. The public file will include non-confidential public comments USTR receives regarding the dispute. If a dispute settlement panel is convened, or in the event of an appeal from a panel, USTR will make the following documents publicly available at www.ustr.gov: the U.S. submissions and any non-confidential summaries of submissions received from other participants in the dispute. If a dispute settlement panel is convened, or in the event of an appeal from a panel, the report of the panel, and, if applicable, the report of the Appellate Body, will be available on the ( print page 68700) website of the World Trade Organization, at www.wto.org.

Juan Millan,

Acting General Counsel, Office of the United States Trade Representative.