Tariff rules limit options

National security claims must meet certain criteria

Should we book bets on when it’s coming? President Trump has already shown a willingness to claim national security and then impose import restrictions on steel and aluminum, and, possibly, autos and auto parts. It’s said we need to respond to unfair practices of trading partners if the playing field is to be leveled for American competitors. But with World Trade Organization (WTO) rules clearly providing remedies to address unfair practices, it seems peculiar the president would rely instead on national security. While the domestic oil patch has recovered from the crippling hit of a few years ago, how long after the start of the next bust will it be before Trump starts talking about national security limits on foreign crude? I’ll leave the answer to that question to those with a crystal ball. Especially interesting, however, is what WTO rules say about nations invoking national security as the basis for taking otherwise prohibited import restrictive action. The origins of these rules were efforts in the late 1940s by the United States to establish a sensible, standards-based approach to nations interfering with international trade activities. The foundational agreement setting forth those rules — the so-called GATT, or General Agreement on Tariffs and Trade — provides in its article XXI(b) the right of each country to take “any action it considers necessary for the protection of its essential security interests.” Most countries’ domestic law track that right. But article XXI(b) establishes three requirements if national security claims raised to justify restrictions on imports are to comply with long-standing international trade law. First, though the language quoted above explicitly empowers each nation to decide on its own what action is considered necessary in the national security context, it does not give each total discretion to decide what security interests merit protection. Article XXI(b) says each nation has the right to take any action it considers necessary to protect “essential security interests.” It does not say each can take any action it considers necessary to protect “any interest it deems essential to security.” One can’t just pay lip-service to national security and meet international law. A genuine essential security interest must exist. Second, and buttressing what was just said, article XXI(b) declares precisely what matters present the kinds of security interests the GATT sees as essential. They are quite limited, and extend no further than to trade in fissionable materials; traffic in arms, ammunition, implements of war, and goods or materials designed to supply a military establishment; and, action taken in war time or other emergency in international relations. As one delegate put it during the drafting of article XXI(b), countries must have a right to protect national security, but not one subject to willy-nilly invocation and, thus, regularized escape from other GATT rules aiming to promote trade. And third, even the discretion granted each state by article XXI(b) to determine, on its own, what action is to be taken to protect security, is not entirely unbounded. The action a state decides upon must be one “it considers necessary.” It would not be sufficient for the action to be one “it considers desirable,” or one “it considers politically popular.” Discretion exists. But the standard inherent in the notion of “necessary” demands at least some sort of means-to-ends connection between the action taken and the fact of essential security being protected. Having these three requirements in mind, think for a moment about instances in which President Trump has already asserted national security to restrict imports. Without passing judgment, it’s clear that, to be compliant with international trade law requires far more than just voicing the assertion. You can imagine that restrictions on crude oil imports would be susceptible to especially intense legal criticism. WTO courts have been reluctant to engage in much elaboration on article XXI(b), presumably for fear of treading on a matter seen as within sovereign prerogative. Nonetheless, the requirements of XXI(b) are clear. Most disturbing to me about too free an invocation of what international trade lawyers consider the GATT’s “nuclear option,” is that it erodes the hard-built structure of international trade law, threatening to replace it with a “looking out for number one; devil take the hindmost” mentality.

Rex J. Zedalis is a professor of law at the University of Tulsa, has taught both international trade law and international energy law for nearly 40 years, and served during the Carter administration as an attorney with the U.S. International Trade Commission.