US steel tariff fight stirs up a swarm of WTO litigation

GENEVA: The US urged European Union ( EU) governments on Monday to reflect on whether it was really in their interest to go ahead with a trade dispute over US metals tariffs, and said it was hopeful of settling the issue with Mexico and Canada.

The US tariffs attracted an unprecedented seven requests for the World Trade Organization ( WTO) adjudication, as well as a slew of criticism, at a fractious WTO dispute settlement meeting, while the US hit back with legal actions against its critics.

US Ambassador Dennis Shea said he was not surprised by China’s opposition, since it had massive overcapacity in metals production and was a non-market economy, but that Washington was “deeply disappointed” with the EU’s stance.

“We would encourage the European countries to consider carefully their broader economic, political, and security interests,” Shea told the meeting.

“We will not allow China’s partystate to fatally undermine the US steel and aluminum industries, on which the US military, and by extension global security, rely.”

China’s representative responded by saying the US was shifting its arguments to disguise its protectionism.

Canada and Mexico have also challenged the tariffs – 25 per cent on steel and 10 per cent on aluminium – but a US trade official told the meeting that, after constructive discussions, Washington was hopeful of reaching an agreement with both.

Adam Austen, a spokesman for Canadian foreign minister Chrystia Freeland, told Reuters the best outcome would be for Washington to rescind the tariffs. Norway, Russia and Turkey also asked the WTO to judge the legality of the US tariffs, despite Washington’s assertion that they are based on national security and therefore outside WTO jurisdiction.

National security claims were taboo for most of the WTO’s 23-year history, because trade diplomats feared a domino effect as countries cited national security to get out of a wide range of obligations. But Shea suggested it would be even worse to try to challenge the US national security claim.

“The US wishes to be clear: if the WTO were to undertake to review an invocation of (the national security exemption), this would undermine the legitimacy of the WTO’s dispute settlement system and even the viability of the WTO as a whole,” he said. — Reuters