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Info Service on WTO and Trade Issues (Oct25/05) Geneva, 2 Oct (D. Ravi Kanth) — Japan, Indonesia, Vietnam, and the European Union informed China at the World Trade Organization (WTO) last week that their respective bilateral framework trade agreements with the Trump administration – necessitated by the allegedly unilateral and illegal reciprocal tariffs – are “not legally binding” and are therefore not “subject to [WTO] notification” requirements. China appears to have expressed its disappointment with the replies provided by these countries, pointing out that most of these agreements seem to include substantial tariff reduction commitments, according to people familiar with the development. China urged these countries to not undermine the multilateral trading system and the WTO, said people who asked not to be quoted. At the WTO’s Committee on Agriculture meeting on 25-26 September, Japan stated that it “made no tariff concessions and did not commit to implement measures inconsistent with the rules on market access under the WTO.” This stance was in sharp contrast to the rather more ambiguous replies provided by the EU, Indonesia, Vietnam, and the US to China’s inquiries. China had posed sharp questions to Indonesia, Japan, the EU, Vietnam, and the US, demanding that they notify to the WTO all the details regarding the agricultural commitments they made to Washington to overcome the allegedly unilateral reciprocal tariffs. According to the WTO’s public database on agriculture, China specifically quizzed Japan on its framework agreement with the US. China stated in its question: “the United States announced that the US-Japan Trade Agreement officially entered into force on 4 September 2025. According to the Agreement, the United States will implement a baseline 15% tariff rate on almost all goods originating from Japan, and adopt industry-specific arrangements for automobiles, aerospace products, generic medicines and certain natural resources.” Further, China said that Japan “will expand market access for a wide range of US products, including agricultural products, industrial goods, energy, aerospace, and vehicles. The Agreement provides for increased minimum access for US rice with a major expansion of import quotas, annual purchases of USD 8 billion of US agricultural products, including corn, soybeans, fertilizer and bioethanol.” China urged Japan to clarify the following points: a. “When will the Agreement be notified to WTO? b. How will Japan ensure its WTO obligations be fulfilled since the Agreement is obviously inconsistent with the Article XXIV of GATT that permits the formation of a free-trade area in which the parties shall eliminate tariff rates on substantially all the trade? c. Will Japan implement its expanded tariff concessions and market access measures (e.g., for rice, corn, soybeans, fertilizer and bioethanol) to the US on a MFN basis?” In response, Japan said: “The Agreement between Japan and the US on July 22, 2025, is not a legally binding agreement. The Agreement is not a regional trade agreement under the WTO Agreement and is not subject to notification. Under the Agreement between Japan and the US on July 22, 2025, Japan made no tariff concessions, and did not commit to implement measures inconsistent with the rules on the market access under the WTO Agreement.” Meanwhile, China asked Indonesia to provide information on its Agreement on Reciprocal Trade concluded on 22 July 2025. According to China, the Agreement states that “the US will impose a 19% tariff on Indonesian imports” while Jakarta “committed to eliminate approximately 99% of tariff barriers on US industrial, food and agricultural products, to exempt all US food and agricultural products from import licensing requirements, and to purchase US agricultural products, including soybeans, soybean meal, wheat, and cotton with an estimated total value of USD 4.5 billion.” China posed the following questions to Indonesia: a. “When will the Agreement enter into force and be notified to WTO? b. How will Indonesia ensure its WTO obligations be fulfilled since the Agreement is obviously inconsistent with the Article XXIV of GATT (RTAs) that permits the formation of a free-trade area in which the parties shall eliminate tariff rates on substantially all the trade? c. Will Indonesia apply its tariff elimination and import licensing exemptions for US agricultural and industrial products on a MFN basis?” In response, Indonesia said that “we would like to inform China that negotiations are still currently ongoing between Indonesia and the US.” In addition, Indonesia said that “a date of the entry into force of the said agreement has not been determined. As such, more detailed information on the Agreement cannot be disclosed at this stage.” Indonesia, however, maintained that it “remains fully committed to its obligations under the WTO.” In its questions to the EU, China sought information on Brussels’ “Agreement on Reciprocal, Fair, and Balanced Trade (Framework Agreement) on 21 August 2025” with the US. According to the Framework Agreement, China stated, “the EU intends to eliminate tariffs on all US industrial goods and to provide preferential market access for a wide range of US seafood and agricultural goods.” China noted that the “EU will also immediately take the necessary steps to extend the Joint Statement of the US and the EU on a Tariff Agreement announced on 21 August 2020, with respect to lobster, coupled with an expanded product scope to include processed lobster.” “The US commits to apply the higher of either the US MFN tariff rate or a tariff rate of 15 percent, comprised of the MFN tariff and a reciprocal tariff, on originating goods of the EU,” China said. Against this backdrop, China asked the EU to clarify the following points: a. “When will the Framework Agreement enter into force and be notified to WTO? b. How will the EU secure its WTO obligations be fulfilled since the Framework Agreement is obviously inconsistent with the Article XXIV of GATT that permits the formation of a free-trade area in which the parties shall eliminate tariff rates on substantially all the trade? c. Will the EU implement its preferential tariff rates to the US on a MFN basis?” In its response, the EU said that “the EU-US Joint Statement is a not a legally binding instrument but provides a platform for the EU and the US for further engagement and cooperation and to further develop trade.” The EU added: “It is intended to be a first step. Over time, additional areas can be discussed and covered.” Brussels said that it “believes that rules-based trade is essential” while remaining “fully committed to reforming and strengthening the WTO.” Meanwhile, China asked Vietnam to clarify its “Framework of the Reciprocal, Fair and Balanced Trade Agreement (the Framework Agreement)” signed with the US on 2 July 2025. According to the Framework Agreement, China stated, “the US will impose a 20% tariff on Vietnamese imports, and a 40% tariff on products transshipped through Viet Nam.” Vietnam also “committed to eliminate all import duties and non-tariff barriers on US products, and not to impose quotas on imports of US origin products.” China asked Vietnam to clarify the following points: a. “When will the Framework Agreement enter into force and be notified to the WTO? b. How will Viet Nam ensure its WTO obligations be fulfilled since the Framework Agreement is obviously inconsistent with the Article XXIV of GATT that permits the formation of a free-trade area in which the parties shall eliminate tariff rates on substantially all the trade? c. Will Viet Nam implement its zero-tariff and quota-exemption commitments for US products on a MFN basis?” In its reply, Vietnam said: “Negotiations regarding a reciprocal trade agreement between Viet Nam and the United States remain ongoing and have not yet concluded. Viet Nam reaffirms its commitment to fulfilling its notification obligations under the World Trade Organization (WTO) upon the finalization of any such agreement. At this stage, Viet Nam is not in a position to comment on specific terms or details that were referenced in public communications, including those issued by the White House.” China also asked the US to provide details on its reciprocal trade agreements with Indonesia, Japan, the EU, and Vietnam. Regarding the Agreement on Reciprocal Trade with Indonesia, China sought the following responses: a. “When will the Agreement enter into force and be notified to WTO? b. How will the US ensure its WTO obligations be fulfilled since the Agreement is obviously inconsistent with the Article XXIV of GATT that permits the formation of a free-trade area in which the parties shall eliminate tariff rates on substantially all the trade rather than raise them? c. How will the US fulfill its commitment to Articles II and XXVIII of GATT relating to schedules of concessions, since it will raise tariff rates of certain goods originating from Indonesia beyond the US commitments in the schedule?” The US informed China that “the joint statement announced by the United States and Indonesia on July 22, 2025, serves to define the key terms to be negotiated as part of the United States-Indonesia Agreement on Reciprocal Trade (US-Indonesia ART). The document does not constitute a legally binding agreement. Negotiation of the US-Indonesia ART is ongoing. The United States is not in a position to answer specific questions about the key terms included in the joint statement or about terms that may be included in the US-Indonesia ART.” China quizzed the US on its “Framework on an Agreement on Reciprocal, Fair, and Balanced Trade (the Framework Agreement) on 21 August 2025” with the EU: a. “When will the Framework Agreement enter into force and be notified to WTO? b. How will the US ensure its WTO obligations be fulfilled since the Framework Agreement is obviously inconsistent with the Article XXIV of GATT that permits the formation of a free-trade area in which the parties shall eliminate tariff rates on substantially all the trade rather than raise them? c. How will the US fulfill its commitment to Articles II and XXVIII of the GATT relating to schedules of concessions, since it will raise tariff rates of certain goods originating from the EU beyond the US commitments in the schedule? ” The US replied: “The Framework announced by the United States and the European Union on August 21, 2025 serves to define the key terms that will be negotiated as part of the US-EU Agreement on Reciprocal, Fair, and Balanced Trade (US-EU Agreement). The Framework does not constitute a legally binding agreement. Negotiation of the US-EU Agreement is ongoing. The United States is not in a position to answer specific questions about the terms that may be included in the US-EU Agreement.” On the US-Japan agreement, China posed the following questions to Washington: a. “When will the Agreement be notified to WTO? b. How will the US ensure its WTO obligations be fulfilled since the Agreement is obviously inconsistent with the Article XXIV of GATT that permits the formation of a free-trade area in which the parties shall eliminate tariff rates on substantially all the trade rather than raise them? c. How will the US fulfill its commitment to Articles II and XXVIII of GATT relating to schedules of concessions, since it will raise tariff rates of certain goods originating from Japan beyond the US commitments in the schedule?” The US told China: “Executive Order 14345 of September 4, 2025, implemented certain terms of a framework between the United States and Japan. The framework does not constitute a legally binding agreement. The United States is not in a position to answer specific questions about the terms referenced in the Executive Order or about terms that may be included in an agreement between the United States and Japan.” On its Reciprocal Trade Agreement with Vietnam, China asked the US: a. “When will the Framework Agreement enter into force and be notified to the WTO? b. How will the US ensure its WTO obligations be fulfilled since the Framework Agreement is obviously inconsistent with the Article XXIV of GATT that permits the formation of a free-trade area in which the parties shall eliminate tariff rates on substantially all the trade rather than raise them? c. How will the US fulfill its commitment to Articles II and XXVIII of GATT relating to schedules of concessions, since it will raise tariff rates of certain goods originating from Vietnam beyond the US commitments in the schedule? d. What is the legal basis for the 40% tariff on the transshipped products through Vietnam? How does the US ensure the measure is consistent with WTO rules?” The US informed China: “The announcement by the President on July 2, 2025, serves to outline the terms of a trade deal between the United States and Vietnam. The announcement does not constitute a legally binding agreement. Negotiation of an agreement between the United States and Vietnam is ongoing. The United States is not in a position to answer specific questions about the terms included in the announcement or about terms that may be included in a US-Vietnam agreement.” The replies from Japan, Indonesia, the EU, Vietnam, and the US appear to suggest a “new normal” in global trade where Washington has seemingly become the epicentre of a new phase of “lawlessness” in international trade, said people familiar with the development. In one stroke, the WTO’s notification requirements are being upended and the organization’s relevance as a rules-based global trade body is being “reduced to a cipher”, said people familiar with the development. In short, the questions and answers from the countries that have signed reciprocal trade agreements with the US suggest that none of them consider it important to share the details or comply with the WTO’s notification requirements, according to people familiar with the development. +
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