At a CFR event in December, Christina Davis of Harvard asked U.S. Trade Rep. Katherine Tai the following question about the WTO panel ruling on the Section 232 steel and aluminum duties:
I'd like to ask about your response to the WTO panel ruling last week that overturned the United States' trade protection for steel and aluminum. And the US has responded that the WTO does not have the jurisdiction to judge on national security, that every Member should respond to its national security on its own decision. How will the United States deal with trade partners mimicking the United States, where an industry is protected for national security? Will you have a response when they follow the same policy we have adopted?
Here was Tai's response:
So let me get to the core of your question, and what we said last week in response to the panel report on national security. Our position has long been that, just look at the text of the agreement, that national security decisions that are made by governments are a source of incredible responsibility. They should not be made willy nilly, but for the integrity of a multilateral institution like the WTO, that it should not get into the business of second guessing the national security decisions that are made by sovereign governments. And I think that our response is very much focused on the reasoning that is in that panel report, which gets deep into creating requirements and parameters for what is or is not a legitimate national security decision. I think that the WTO is getting itself on very, very thin ice. And I think that it really challenges the integrity of the system. So that's my answer for you, which is, it is the responsibility of governments to bring integrity to their decisions on national security, but it is a very challenging place to be to have unelected, not really accountable decision makers in Geneva second guess processes that are run through a government like ours, which is democratic, and also for a country like ours, that many others look to, to defend on national security, not just for ourselves, but for others.
This exchange gets at some of the same issues I raised in a recent post, where I said:
The U.S. has made clear its view that once a government invokes national security, WTO panels should not scrutinize the measure at issue for compliance with the terms of the national security exception. But what does the U.S. expect and hope for in terms of keeping abuse of this exception in check? Rely solely on good faith on the part of Members invoking national security? Affected governments should bring non-violation nullification or impairment complaints in these circumstances? At the U.S. Trade Policy Review that just took place, Ambassador María Pagán said this: "I wish to remind Members: the negotiating history of Article XXI(b) confirms the drafters intended this provision to be self-judging, and that the available remedy for such measures is a non-violation claim." That seems pretty clear, but my question then is, how does the U.S. think implementation of successful non-violation complaints should work? Is there the same rebalancing process that you would see with violation claims, or is it just good faith efforts to reach a settlement? And finally, would the U.S. consider my suggestion of automatic and immediate rebalancing after a government invokes national security?
Tai's response raises some additional points for me.
First, there's definitely an element of her answer that seems to take the "good faith" approach to national security issues that I mentioned in my post, in particular where she says "it is the responsibility of governments to bring integrity to their decisions on national security." But what if governments are not acting in good faith? How should such situations be handled? If it is through non-violation claims, what does Tai think about the questions I asked in my earlier post?
Second, it's worth noting that you don't have to withdraw a measure in response to a WTO panel's ruling of violation, as you can just accept retaliation by the complainant instead. Assuming this kind of rebalancing is acceptable to the U.S. in the context of NVNI claims, why is a finding of violation and then having rebalancing as a result not acceptable to the U.S. as well?
Third, what do other governments think about the U.S. suggestion that NVNI claims are the proper approach to national security measures? Will we eventually see some government bring a claim and test this out?
Fourth, Christina's question was specifically about the possibility that other governments would copy the U.S. actions. What would the U.S. do if, say, India stopped protecting certain patents held by U.S. companies and invoked national security as the basis? Or if Mexico invoked national security in relation to measures keeping foreign producers out of its energy sector?
And lastly, Tai's answer makes reference to the U.S. defending other countries and being a democracy. Should those characteristics be a consideration in evaluating a national security defense?
