US metal-tariffs showdown at WTO to shake world trade order

Bloomberg

Move over Russia, Ukraine and Saudi Arabia. The US looks set to join the group of countries embroiled in disputes at the World Trade Organization involving curbs imposed on national-security grounds.
China said it would complain to the WTO about US President Donald Trump’s import tariffs on steel and aluminum after failing to win an exclusion, which Washington gave to others such as Canada, Australia and the 28-nation EU. The US levies stem from probes by Commerce Secretary Wilbur Ross under a little-used part of a Cold War-era American law.
The Geneva-based WTO has never ruled on a dispute involving trade restrictions justified on national-security grounds and has never had a case centering on steel and national security. A legal fight over Trump’s metal tariffs could shake the global commercial order, according to Robert Zoellick, who served as US trade chief under President George W. Bush.
“Here’s the risk: The WTO decides, well, the EU or whoever brings action is right, this isn’t really national security,” Zoellick said in Brussels. “But then what happens when Wilbur Ross or somebody else says ‘wait a minute. Those people in Geneva can decide what is in America’s national security? Should we be part of the WTO?’ Or, the reverse, the WTO says ‘well, we let countries decide their own national security.’ Then you’ve created a very big loophole.”
A few national-security cases are currently working their way through the WTO’s complaints system. Two involve Russia and Ukraine, which have imposed commercial curbs on
each other as the Ukrainian government battles rebels in the eastern part of the country.
Article 21 of the General Agreement on Tariffs and Trade—the WTO’s less-muscular predecessor for almost 50 years until 1994—is included in the current rules. The provision says that nothing can “prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests.”
The article then offers three specifications relating to nuclear materials, arms trafficking and “war or other emergency in international relations.”
In 1962, US President John Kennedy’s administration invoked the security exception when imposing a trade embargo against Cuba in the run-up to the Cuban missile crisis. In the mid-1980s, the administration of then President Ronald Reagan invoked Article 21 to justify a ban on US trade with Nicaragua.
The issue arose again in 1996 when the EU challenged extraterritorial aspects of the US. Helms-Burton Act tightening sanctions against Cuba. The Trump administration has claimed the WTO has no authority to rule on matters related to national security. Such a US reaction to China’s planned complaint could encourage other countries to try to exploit a perceived national-security loophole and provoke a wave of trade protectionism.