April 26, 2019
By Tom Miles
GENEVA (Reuters) – The United States said on Friday a World Trade Organization ruling on national security was “seriously flawed”, a warning not to use it as a precedent to judge U.S. President Donald Trump’s tariffs on imported steel and cars.
The legal case in question was between Russia and Ukraine and did not directly involve the United States. But it was the first WTO ruling on “national security”, the basis for U.S. tariffs imposed last March on aluminum and steel imports and a planned U.S. tariff on imported cars.
The ruling earlier this month clarified the limits of “national security” as a defense for breaking WTO rules against unjustified tariff barriers to trade.
Any such claim should be “objectively” true, relating to weapons, war, fissionable nuclear materials or an “emergency in international relations”, according to the ruling.
Both Russia and Ukraine decided not to appeal, clearing the way for final adoption of the ruling at Friday’s meeting of the WTO’s dispute settlement body.
A U.S. diplomat told the meeting that the ruling was “unpersuasive” and “problematic for systemic reasons”, according to an official who attended the meeting.
The U.S. diplomat said the panel of three adjudicators had not sufficiently examined the argument that invocation of national security was “self-judging” – which would essentially shield the U.S. tariffs from any WTO challenge.
The U.S. diplomat also said the panel’s conclusions were premature and not up to the standards of international law, and that it should not have made the case for Russia by defining what constituted an “emergency” in international relations.
Diplomats from the European Union, Canada, China, Turkey, Australia and Mexico welcomed the ruling and the burden that the panel had imposed on any WTO members making national security claims.
The WTO’s dispute system has acted as a bulwark against global protectionism since it was set up in 1995, but since Trump’s election it has become a battleground for arguments about U.S. trade policies.
Trump has blocked appointments of WTO appeals judges to stop what he sees as unfair treatment of U.S. trade policies, but critics fear the block could potentially cripple the WTO, and 75 WTO members have asked the United States to back down.
A further threat to the WTO dispute system arose last month when Venezuela put a row with the United States on the agenda, prompting the postponement of the meeting because Washington does not recognize the government of President Nicolas Maduro.
That could have caused an indefinite disruption, but Venezuela chose not to bring its complaint to Friday’s meeting.
(Reporting by Tom Miles; Editing by Mark Heinrich)