National Security Decision at WTO Adopted
The World Trade Organization formally adopted the Russia-Ukraine panel ruling, the first time the WTO tackled the national security exception from the General Agreement on Tariffs and Trade (see 1904120022). The case has implications for the Section 232 tariffs on steel and aluminum, which have hit U.S. allies as well as strategic competitors. The panel had found that the Russian Federation had met the requirements for invoking the national security clause in restricting transit of goods across its territory to Ukraine, because Russian seizure of Ukrainian territory (Crimea) counts as a time of international emergency.
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According to a summary provided by a Geneva trade official, Russia said April 26 that the panel struck the right balance of giving countries discretion to determine their essential national security interests while also precluding countries using national security as a pretext to justify "measures introduced for the purposes of mere economic protectionism."
The European Union, Canada, China, Turkey Australia and Mexico also lauded the panel's interpretation of the GATT language. The U.S. however, found the panel's analysis "unpersuasive," and said the panel issued advisory opinions beyond the factual findings its was obligated to make, which makes the decision "seriously flawed."
In other business, China decided not to appeal the agricultural case it lost this month involving tariff rate quotas for wheat, corn and rice (see 1904180020).