China, EU join challenge against US metals tariffs

The US says its tariffs on imported steel and aluminium imposed earlier this year are allowed under the WTO's national security exemption.
The US says its tariffs on imported steel and aluminium imposed earlier this year are allowed under the WTO's national security exemption.PHOTO: EPA-EFE

Request to WTO could see US exit world body or flood of new protectionist measures

GENEVA • China and the European Union have joined a group of countries asking the World Trade Organisation (WTO) to investigate the Trump administration's decision to impose metals tariffs on national security grounds, creating a new front in a trade war that has shaken global markets.

The move sets the stage for a showdown at the WTO that some fear could lead to either a US exit or a flood of new protectionist measures invoking what has until now been a rarely used national security loophole in global trade rules.

The United States has said the tariffs on imported steel and aluminium imposed earlier this year are allowed under the WTO's national security exemption, which permits governments to take "any action which it considers necessary for the protection of its essential security interests". This has drawn the ire of affected countries, many of which are close American allies, such as the EU and Canada.

Countries so far have refrained from challenging that at the WTO. But in a statement issued on Thursday, Norwegian Foreign Affairs Minister Ine Eriksen Soreide said her country and other nations had chosen to request the establishment of a dispute panel at the WTO.

"We believe that the US' additional duty on steel and aluminium is in violation of the WTO rules," she wrote.

The complaints differ slightly, but each country alleges that the measures violate core WTO agreements such as the General Agreement on Tariffs and Trade, or Gatt, and the WTO Safeguards Agreement, which govern the use of temporary trade restrictions, known as safeguards.

Nine WTO members - Canada, China, the EU, India, Mexico, Norway, Russia, Switzerland and Turkey - have filed initial complaints that allege President Donald Trump's tariffs on steel and aluminium violate WTO rules. But Thursday's move takes the disputes an important step closer to a formal case.

 
 

A spokesman for the office of the US Trade Representative did not immediately respond to a request for comment. A WTO spokesman declined to comment on the matter.

The dispute puts the Geneva-based trade organisation in a difficult position. If it rules in support of the US, it could encourage other members to enact protectionist measures under the guise of national security. If it rules against the US, it could draw further ire from the world's largest economy and a possible withdrawal by the Trump administration.

The requests will be considered at the next meeting of the WTO dispute settlement body scheduled for Oct 29.

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A version of this article appeared in the print edition of The Straits Times on October 20, 2018, with the headline 'China, EU join challenge against US metals tariffs'. Print Edition | Subscribe