DOI: 10.5553/EJLR/138723702022023004004

European Journal of Law ReformAccess_open

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‘Make America Rich Again’

The Nationalist Motives Compromising Good Faith Usage of the Essential Security Exception of the GATT Article XXI

Keywords good faith usage, GATT Article XXI, essential security exception
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Sarah Plew, '‘Make America Rich Again’', (2021) European Journal of Law Reform 465-479

    The Nationalist Motives Compromising Good Faith Usage of the Essential Security Exception of the GATT Article XXI
    This article examines the recent applications of the essential security exemption of the General Agreement on Tariffs and Trade and suggests an undercurrent of camouflaged nationalist motivation that has produced an alarming pattern of misuse of the good faith element of the exemption. Part A will outline the essential security exemption of Article XXI in order to provide a background of its history and intended applications. Parts B and C analyse the recent practical applications of Article XXI through case studies, demonstrating the increasing evidence of nationalist motivations that exploit the good faith element of the essential security exemption. Part D assesses the dangers of such misuse and ponders the question: can contracting parties truly be trusted to adhere to international trade law in good faith?

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      “I am a Tariff Man,” tweeted US President Trump in December 2018,1x Donald J. Trump (@realDonaldTrump), Twitter (4 December 2018), https://twitter.com/realDonaldTrump/status/1069970500535902208?s=20 [hereinafter Twitter]. following his imposition of steel and aluminium tariffs earlier that year.2x Press Release, Office of the United States Trade Representative, USTR Finalizes Tariffs on $200 Billion of Chinese Imports in Response to China’s Unfair Trade Practices (18 September 2018), https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/september/ustr-finalizes-tariffs-200. This proclamation brought to mind the Black Sabbath song declaring “I am Iron Man!”,3x Black Sabbath, Iron Man, on Paranoid (Warner Bros., 1970) [hereinafter Iron Man]. and we imagine Trump flexing his metaphorical muscles as he willed the gritty heavy metal chords to become the soundtrack of his presidency.4x Twitter, supra note 1. “When people or countries come in to raid the great wealth of our nation, I want them to pay for the privilege of doing so,” he continued. “It will always be the best way to max out our economic power”.5x Ibid. In typical Trumpian fashion, the message echoed through his inflammatory speech: America the Great, Rich and Powerful bends to no one. Officially, the Trump Administration had instated the tariffs for essential security reasons, though from reading Trump’s tweets, one might easily have insinuated commercial or nationalist intentions.
      States enact all manner of measures in the name of national security, from immigration restrictions to travel bans, to trade tariffs and embargos. While the General Agreement on Tariffs and Trade (the GATT) allows for essential security interest exceptions to its trade obligations, the full scope of this exception has yet to be clearly defined. Up until now, State actors were generally trusted to make good faith national security decisions. If the GATT allows States to determine and act on national security matters at their discretion, then that presents an important consideration: Can all States be trusted to make these determinations in good faith without supervision? What prevents States from acting in their own interests and hiding behind a false narrative of national security? The United States and Russia are two countries that have consistently insisted that details behind national security measures should remain confidential and self-judging. Yet not all governments’ actions instil particular confidence in their good faith intentions. Trump concluded his “Tariff Man” tweet with a boast of the “$billions” being acquired through his tariffs, adding an enthusiastic flourish of “MAKE AMERICA RICH AGAIN”.6x Ibid. Trump’s nationalist declarations and ‘America first’ policies made his Administration’s intentions difficult to ignore, and without a watchdog holding the Administration accountable to certain standards, the world must simply trust that making America ‘rich again’ was a fortuitous by-product of Trump’s essential security measures.
      This article highlights the increasingly pressing need for clearer, more specific guidelines in order to hold accountable States who invoke the GATT national security exception, particularly in light of rising nationalism and trade measures that undermine goals and obligations in international trade law. This will be illustrated in the context of two specific case studies. The first case study explores the first analysis of the scope of the GATT national security exception by the World Trade Organization (WTO) in a dispute between Russia and Ukraine. The second case study will explore in further depth the US steel and aluminium tariffs imposed during the Trump Administration, from the perspective that the provided rationale of essential security camouflaged nationalism and commercial interests. These two cases demonstrate the unstable foundation of good faith evident in international trade, and the emerging reality that States cannot be trusted to self-regulate. Without further clarification and guidelines for the scope of Article XXI, the rise of nationalist policies threatens to undermine the collaborative progress made by the GATT and the WTO.

    • A The GATT and Its Essential Security Exception

      The GATT aimed to maintain a fair system of international trade among the twenty-three original signing States, including the United States.7x General Agreement on Tariffs and Trade 1947 preface, 30 October 1947, 60 Stat. A-11, 55 U.N.T.S. 194 [hereinafter GATT]. Two primary commitments were required of contracting parties. Firstly, each State was required to confer most favoured nation status on all other contracting parties.8x Ibid., Art. I:I. This meant that contracting members could not face different tariffs than other contracting countries, and no party could receive beneficial or detrimental treatment unless “all other contracting parties” were treated equally.9x Ibid. Secondly, contracting parties could not restrict numbers of imports and exports, following a freedom of transit provision.10x Ibid., Art. V. A later provision was added in 1965 to require any newly joining parties to eliminate any already existing offending tariffs to comply with the GATT.11x Decision of 8 February 1965, 135/2. It is important to note that the GATT went through several revisions over the years, the most recent iteration establishing the WTO in 1994.12x World Trade Organization, The GATT Years: From Havana to Marrakesh, www.wto.org/english/thewto_e/whatis_e/tif_e/fact4_e.htm (last accessed 8 December 2020) [hereinafter The GATT Years]. This version had expanded to include 128 signatories (officially ‘WTO members’).13x World Trade Organization, The 128 Countries That Had Signed GATT by 1994, www.wto.org/english/thewto_e/gattmem_e.htm (last accessed 8 December 2020). This version also added dispute settlement provisions that had not been included in the GATT before.14x The GATT Years, supra note 12. Annex 2 of Marrakesh Agreement Establishing the World Trade Organization includes the Dispute Settlement Understanding (DSU), which still serves as the central WTO dispute settlement agreement. The DSU provides that members of the WTO can bring complaints of alleged violations by other WTO members; and members can request a panel review if a dispute is not resolved between the parties.15x Understanding on Rules and Procedures Governing the Settlement of Disputes, Art. 2, 15 April 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 2, 1869 U.N.T.S. 401 [hereinafter DSU].
      Article XX provides general exceptions to GATT obligations, including measures that are “necessary to protect public morals”, “human, animal or plant life or health” and “relating to the conservation of exhaustible natural resources”, among others.16x GATT, supra note 7, Art. XX. Article XXI contains the security exceptions, providing:

      Nothing in this Agreement shall be construed

      1. to require any contracting party to furnish any information the disclosure of which it considers contrary to its essential security interests; or

      2. to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests

        1. relating to fissionable materials or the materials from which they are derived;

        2. relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment;

        3. taken in time of war or other emergency in international relations; or

      3. to prevent any contracting party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.17x General Agreement on Tariffs and Trade 1994, Art. XXI, 15 April 1994, 1867 U.N.T.S. 187 [hereinafter GATT 1994].

      State measures under Article XXI(b), allowing for “any action which it considers necessary for the protection of its essential security interests”, has become a particular point of contention in international trade law. The exception has been invoked with increasing frequency lately, with many actions causing controversy and leading to disputes at the WTO. The disputes often turn on the meaning and scope of section (b), and whether the phrasing “which it considers necessary” renders the provision self-judging.18x See Panel Report, RussiaMeasures Concerning Traffic in Transit, WTO Doc. WT/DS512/R (adopted 26 April 2019) [hereinafter Panel Report, RussiaTraffic in Transit]; Request for the Establishment of a Panel by the European Union, United StatesCertain Measures on Steel and Aluminum Products, WTO Doc. WT/DS548/14 (29 October 2018) [hereinafter Request by E.U., U.S. – Steel and Aluminum].
      This question is not addressed within the writing of the GATT 1994, or in other WTO agreements, and the provision has yet to be formally defined.19x Brandon J. Murrill, The “National Security Exception” and the World Trade Organization, Cong. Res. Serv. 2 (2018), https://fas.org/sgp/crs/row/LSB10223.pdf [hereinafter “National Security Exception” and the WTO]. The DSU has provided some guidance, as referenced by the WTO panel that first faced the question of the scope of this provision.20x Panel Report, RussiaTraffic in Transit, supra note 18, at Para. 7.59. Article 3.2 of the DSU outlines that WTO agreements should be interpreted “in accordance with customary rules of interpretation of public international law”.21x DSU, supra note 15, Art. 3.2. This points to Articles 31 and 32 of the Vienna Convention on the Law of Treaties (“Vienna Convention”).22x Vienna Convention on the Law of Treaties, Art. 31-32, 23 May 1969, 1155 U.N.T.S. 331 [hereinafter Vienna Convention]. Article 31 of the Vienna Convention provides,

      A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.23x Ibid., Art. 31(1).

      Even with this outline, interpretation of Article XXI(b) remains ambiguous. As one academic reasons,

      The “ordinary meaning” of the phrase “it considers” requires at least some of the exception to be self-judging, but it is not clear whether those words modify all or part of Article XXI(b).24x Roger P. Alford, The Self-Judging WTO Security Exception, 2011 Utah L. Rev. 697, 706 (2011) [hereinafter The Self-Judging Security Exception] (emphasis added).

      Further, interpreting the ‘object and purpose’ of the treaty in its entirety may contrast with the ‘object and purpose’ of the Article XXI security exception.25x Ibid. Approaching an Article XXI(b) question from the standard of ‘object and purpose’ requires balance, but, as one academic importantly notes, “it does not answer who should strike that balance, or how it should be struck”.26x Ibid. Approaching an issue from a ‘good faith’ standard does not provide further clarity or confidence, particularly in light of widespread self-interested nationalist policies, and increasing use of the exception in international trade.
      Concerns of an unfettered scope of Article XXI have been raised from the time of the creation of the GATT. The drafters themselves debated the scope of the exception and the potential for bad faith usage. One representative from the Netherlands requested clarification on Article XXI in a 1947 meeting of the Preparatory Committee of the United Nations Conference on Trade and Employment (‘Committee’), asking,

      [W]hat are the “essential security interests” of a Member? I find that kind of exception very difficult to understand, and therefore possibly a very big loophole in the whole Charter.27x U.N. ESC, 2nd Sess., 23rd comm. mtg., E/PC/T/A/PV/33, 19 (24 July 1947), https://docs.wto.org/gattdocs/q/UN/EPCT/APV-33.PDF.

      This concern was never resolved in Committee discussions, and the general assumption since has been that parties will act in good faith. However, it has been suggested that States with particularly tense international relations may be tempted to act in their own interests and invoke Article XXI in bad faith.28x The Self-Judging Security Exception, supra note 24, at 726. The complex, interwoven economic and political relationship between Russia and Ukraine is one example of a relationship with such potential.

    • B Case Study: Russia – Measures Concerning Traffic in Transit

      In Russia Measures Concerning Traffic in Transit (Russia Traffic in Transit), a WTO dispute settlement panel (‘the Panel’) was asked to interpret the GATT national security exemption in the context of a trade dispute between Ukraine and Russia.29x Panel Report, RussiaTraffic in Transit, supra note 18, at Para. 7.20. The dispute arose following a long deterioration in the relationship between the two States, with Russia eventually placing restrictions on travel from Ukraine.30x Ibid., at Para. 7.5. Ukraine claimed that Russia’s restrictions breached their obligations regarding freedom of transit and sought a remedy for Russia’s transit restrictions.31x Ibid., at Paras. 7.203-7.204. Russia considered these restrictions necessary for the protection of essential security interests. They insisted that not only were the measures valid under the GATT national security exemption but also, as such, the matter was not justiciable; therefore, the WTO did not have jurisdiction to address the issue or analyse the matter.32x Ibid., at Paras. 7.27-7.28. Although the two States were settling on trading on increasingly unfavourable terms, there remained one pressing question requiring attention: If the GATT Article XXI national security exception is self-judging, then should the WTO (and other contracting States) simply trust a State’s good faith interpretation of essential security interests, even in such situations?
      The Panel noted that the relationship between Russia and Ukraine began to tarnish following Ukraine’s withdrawal from discussions to join the Eurasian Economic Union Treaty.33x Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part, 57 Off. J. E.u., L. 161, 170 (29 May 2014). The Ukraine government had chosen instead to foster a relationship with the European Union, signing onto the “EU-Ukraine Association Agreement” and a trade agreement with the EU in 2014.34x Ibid. The same year, Ukraine, with several other countries, brought the “de-escalation of the situation with respect to Ukraine” – diplomat speak for the Russian occupation of the Crimea – to the attention of the United Nations (UN).35x UN General Assembly Resolution No. 68/262. Territorial Integrity of Ukraine, 27 March 2014, 2 A/RES/68/262. The UN Generally Assembly Resolution that followed in 2016 condemned the “temporary occupation of part of the territory of Ukraine” and explicitly referenced the Geneva Conventions.36x UN General Assembly Resolution No. 71/205, Situation of Human Rights in the Autonomous Republic of Crimea and the city of Sevastopol (Ukraine), 19 December 2016, A/RES/71/205. The two States then imposed sanctions and bans against each other (starting with Ukraine), leading eventually to the dispute before the WTO Panel, in which Russia claimed that an international emergency between the countries had led them to take national security measures.37x Panel Report, RussiaTraffic in Transit, supra note 18, at Para. 7.16. However, Russia refused to provide evidence to refute Ukraine’s claims, following their assertion that their actions under Article XXI were not justiciable and were outside the jurisdiction of the WTO.38x Ibid. From Russia’s perspective, Ukraine’s actions with the UN may have been interpreted as a threat of war. Alternatively, the bans and restrictions may have been retaliation for Ukraine’s disloyalty, or Russia reacting to its bruised ego. There are numerous feasible explanations for Russia’s actions, yet not all possible motives exude good faith. It was impossible to verify, without oversight or accountability, that Russia instated its restrictions purely or even primarily for essential security reasons.
      Veiled in the Panel’s analysis was the suggestion that a State’s good faith should not necessarily be taken for granted. The Panel noted the breakdown of the relationship between Russia and Ukraine as a significant element in the factual background, saying that although it was not the Panel’s responsibility to “pass […] legal characterizations of those events” or “to assign responsibility for them”, the context of the dispute was nonetheless noted as important.39x Ibid., at Para. 7.5. The Panel seemed to consider the worsening relationship a notable influence on the circumstances, prompting consideration whether the animosity between the parties had inspired political backlash rather than simply national security concerns. If security concerns were not demonstrably the primary foundation for the embargo, then this raised questions of the good faith use of Article XXI.
      In exploring these questions, the Panel began to define limits on the use of Article XXI for the first time. The Panel determined that measures “which [the acting State] considers necessary” under Article XXI only comprised actions that fell under subsection (b). They stated,

      Given that these subject matters i.e. the ‘fissionable materials […]’, ‘traffic in arms […]’, and situations of ‘war or other emergency in international relations’ […] are substantially different, it is obvious that these subparagraphs establish […] requirements that the action in question must meet in order to fall within the ambit of Article XXI(b).40x Panel Report, RussiaTraffic in Transit, supra note 18, at Para. 7.68.

      The Panel expanded upon this to more clearly define phrases such as ‘taken in the time of’ and ‘emergency in international relations’, deciding ultimately that although members can define their own essential security interests, members are still obligated to interpret and apply Article XXI(b)(iii) in good faith.41x Ibid., at Paras. 7.108-7.110. As such, the WTO may review whether a decision was made in good faith and whether measures taken were ‘not implausible’ in protecting necessary security interests.42x Ibid., at Para. 7.138. Thus, the Panel asserted that Article XXI is not entirely self-judging and that the WTO has inherent jurisdiction as an “international adjudicative tribunal”, and through the DSU, to review these measures.43x Ibid., at Para. 7.53; DSU, supra note 21, Art. 2.
      Regarding Russia’s actions specifically, the Panel held that Russia had met the requirements for invoking Article XXI(b).44x Panel Report, RussiaTraffic in Transit, supra note 18, at Para. 7.123. The Panel decided that the conflict between the two countries was not implausible to threaten essential security interests and was not ‘so unrelated’ to the emergency; therefore, the restrictions were allowable under the exception.45x Ibid., at Para. 7.145. Specifically, these actions fell under Article XXI(b)(iii), as measures “taken in time of war or other emergency in international relations”.46x GATT 1994, supra note 17, Art. XXI. Though the Panel ultimately determined that Russia had legitimate essential security concerns, the Panel returned repeatedly to the concept of a State’s good faith under Article XXI.47x Panel Report, RussiaTraffic in Transit, supra note 18, at Para. 7.138. The Panel emphasized that the good faith obligation applies also to “[a State’s] connection with the measures at issue”48x Ibid., at Para. 7.138. and conceded that, although Russia had displayed ‘allusiveness’ regarding their decision and the surrounding circumstances of their relationship with Ukraine, their explanation was ‘minimally satisfactory’ to establish the connection.49x Ibid., at Para. 7.137.
      Though the Panel granted that the exception was partially self-judging in that a State may determine its essential security interests for itself, the Panel implied that the WTO does not have full confidence in States’ good faith while making these decisions. The Panel reminded the parties that a WTO member cannot use Article XXI “as a means to circumvent their obligations under the GATT 1994”, and the WTO still has the authority to supervise decisions to enforce this hard line.50x Ibid., at Para. 7.133. Amidst the dispute, the Trump Administration submitted a statement to the chair of the Panel, supporting Russia’s position that the Article XXI exception is not justiciable and that every State has the right and authority to determine their own security interests.51x Third-Party Oral Statement by the United States, RussiaMeasures Concerning Traffic in Transit, Para. 35, WTO Doc. WT/DS512 (25 January 2018). While the United States later conceded that the Panel did indeed have jurisdiction in the particular dispute through the DSU, they continued to insist that Article XXI was fully self-judging and generally “not capable of findings by a panel”.52x Panel Report, RussiaTraffic in Transit, supra note 18, at Para. 7.52.
      The United States’ supremacist perspective on Article XXI had already become apparent in the Trump Administration’s imposition of steel and aluminium import tariffs.

    • C Case Study: United States – Certain Measures on Steel and Aluminium Products

      In 2017, the US Secretary of Commerce (the ‘Secretary’) carried out an investigation into the impact of steel imports on national security,53x Notice Request for Public Comments and Public Hearing on Section 232 National Security Investigation of Imports of Steel, 82 Fed. Reg. 19, 205 (26 April 2017). the results of which were announced in January 2018.54x U.S. Dept. of Commerce Bureau of Indus. & Sec., The Effect of Imports of Steel on the National Security 20 (11 January 2018), www.bis.doc.gov/index.php/documents/steel/2224-the-effect-of-imports-of-steel-on-the-national-security-with-redactions-20180111/file. In his report, the Secretary concluded that steel is essential to American national security because of its use in infrastructure and defence and that domestic steel production must be protected to ensure its consistent availability.55x Ibid. Following these recommendations, President Trump imposed 25 per cent tariffs on steel imports and 10 per cent tariffs on aluminium in 2018, affecting ‘virtually every country in the world’.56x Linfan Zha, The Wall on Trade: Reconsidering the Boundary of Section 232 Authority Under the Trade Expansion Act of 1962, 29 Minn. J. Int’l L. 229, 239 (2020) [hereinafter The Wall on Trade]. He cited national security concerns, wielding his power under Section 232 of the Trade Expansion Act of 1962, which provides that a president may determine whether “an article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security” and can take action accordingly.57x 19 U.S.C. § 1862(c)(1)(A). What subsequently transpired was a trade war with China58x See Jill Disis, Trump Promised to Win the Trade War with China. He Failed, Cnn Bus. (25 October 2020), www.cnn.com/2020/10/24/economy/us-china-trade-war-intl-hnk/index.html. and an uproar from around the world that the tariffs undermined the United States’ obligations under international trade law.59x Request by E.U., USSteel and Aluminum, supra note 18.
      Many countries imposed retaliatory tariffs in response to the steel and aluminium tariffs, including Canada,60x Farrow, Notice of Intent to Impose Countermeasures Action Against the U.S. in Response to Tariffs, Farrow (11 August 2020), https://farrow.com/news/notice-of-intent-to-impose-countermeasures-action-against-the-u-s-in-response-to-tariffs/. Mexico,61x Chris Isidore, Mexico Imposes Tariffs on $3 Billion Worth of US Exports, Cnn (6 June 2018), https://money.cnn.com/2018/06/06/news/economy/mexico-us-tariffs-retaliation/index.html. China,62x Chris Buckley, China Slaps Tariffs on 128 U.S. Products, Including Wine, Pork and Pipes, N.Y. Times (1 April 2018), www.nytimes.com/2018/04/01/world/asia/china-tariffs-united-states.html. Russia63x Erica York, Kyle Pomerleau & Scott Eastman, Tracking the Economic Impact of U.S. Tariffs and Retaliatory Actions, Tax Found. (22 June 2018), https://taxfoundation.org/tracker-economic-impact-tariffs/. and the whole of the European Union.64x Alanna Petroff, Here’s How Europe is Punishing the US for Steel Tariffs, Cnn (1 June 2018), https://money.cnn.com/2018/06/01/news/economy/trade-war-tariffs-eu-canada-mexico-response/index.html?iid+EL. This led to a legal challenge at the WTO brought by ten WTO Member States, alleging violations by the United States of Articles II, XIX and XVI of the GATT.65x Request by E.U., USSteel and Aluminum, supra note 18. The United States argued that its tariffs fell clearly under the Article XXI security exception.66x Communication from the United States, United StatesCertain Measures on Steel and Aluminum Products, WTO Doc. WT/DS548/14 (18 October 2018) [hereinafter Communication from US – Steel and Aluminum]. Despite the WTO Panel conclusion to the contrary in Russia Traffic in Transit, the Trump Administration asserted its stubbornly consistent stance: their actions in the name of national security under GATT Article XXI were not justiciable. The United States insisted that each WTO Member has “the authority to determine for itself those matters that it considers necessary for the protection of its essential security interests”.67x Communication from US – Steel and Aluminum, supra note 66. Emphasis added. The WTO convened a Panel to review the dispute,68x Communication from the Panel, United StatesCertain Measures on Steel and Aluminum Products, WTO Doc. WT/DS548/16 (10 September 2019) [hereinafter Communication from Panel – Steel and Aluminum]. though their decision has since been postponed due to the coronavirus pandemic.69x Communication from the Panel, United StatesCertain Measures on Steel and Aluminum Products, WTO Doc. WT/DS548/17 (8 February 2021). If the Panel follows its reasoning in Russia Traffic in Transit, they may find against the United States, in which case the United States would be expected to revoke the tariffs.70x Rachel F. Fefer et al., Section 232 Investigations: Overview and Issues for Congress, Cong. Research Serv. 7 (last updated 24 August 2020), https://fas.org/sgp/crs/misc/R45249.pdf [hereinafter Section 232 Investigations]. Some raised concerns that had such ‘an unfavourable outcome’ for the United States come during the Trump Administration, the Administration may have used the excuse to finally, officially withdraw from the WTO.71x The Wall on Trade, supra note 56, at 270. Although a future without the WTO seems less imminent after President Biden came into power in 2021, the threat has not dissipated. The pervasive nationalist ideals of other American leadership and of the seventy-four million people who voted to re-elect Trump in his re-election campaign against Biden72x See Hamid Dabashi, What to Make of More Than 70m Americans Who Voted for Trump? Al Jazeera (21 November 2020), www.aljazeera.com/opinions/2020/11/21/what-to-make-of-more-than-70m-americans-who-voted-for-trump. have made themselves known, and they did not follow Trump out of the door.
      When it comes to the steel and aluminium tariffs, it has been argued that the Secretary’s findings from his Section 232 investigation do not justify recommendation of tariffs.73x The Wall on Trade, supra note 56, at 239. The tariffs aimed to fortify domestic steel and aluminium manufacturing in preparation for a national emergency;74x Donald J. Trump, Presidential Proclamation on Adjusting Imports of Steel into the United States, The White House (8 March 2018), www.whitehouse.gov/presidential-actions/presidential-proclamation-adjusting-imports-steel-united-states. yet this motive leaves questions. Domestic manufacturers made up 70 per cent of the steel75x Chad P. Bown & Douglas A. Irwin, Trump’s Assault on the Global Trading System and Why Decoupling from China Would Change Everything, Foreign Aff. (October 2019), www.foreignaffairs.com/articles/asia/2019-08-12/trumps-assault-global-trading-system. and 40 per cent of the aluminium consumed in the United States in 2017.76x See Michaela D. Platzer, Effects of U.S. Tariff Action on U.S. Aluminum Manufacturing, Cong. Research Serv. (last updated 9 October 2018), https://fas.org/sgp/crs/misc/IF10998.pdf. Generally, only around 3 per cent of steel and aluminium domestic production is aimed for military purposes.77x Section 232 Investigations, supra note 70, at 7. This leaves the majority of steel and aluminium both imported and domestic entirely unrelated to national security purposes. Though the Trump Administration could have targeted imports directly related to security, it instead took a broad, authoritative approach, asserting their supremacy.78x The Wall on Trade, supra note 56, at 239-240. Levying steel and aluminium destined for pots, pans and car parts seems unnecessary, much less urgent for national security.
      The WTO may well find that the tariffs are not justified under Article XXI, as it appears unlikely that the steel and aluminium tariffs would fall under the enumerated circumstances in Article XXI(b), as required in Russia Traffic in Transit.79x Panel Report, RussiaTraffic in Transit, supra note 18, at Para. 7.82. Even assessing the decision upon a good faith standard yields more uncertainty. If over 90 per cent of domestic steel and aluminium remains available for redirection to the military in case of emergency, then a good faith security necessity is dubious. Further, although the Trump Administration officially claimed ‘national security’ as their reasoning behind the tariffs, Trump’s unofficial communication insinuated differently. Tweets of ‘MAKE AMERICA RICH AGAIN’ and laments of the ‘600 to 800 Billion Dollars a year’ that the United States was ‘losing’ on trade strongly insinuated economic ambitions.80x See Matthew Yglesias, The Trump Trade Tweets that Sent the Stock Market Tumbling, Explained, Vox (6 May 2019), www.vox.com/2019/5/6/18531101/trump-china-tariff-tweet-schumer-stock. There are those who call the tariffs clear evidence of “the capture of the White House by the steel industry” and an act of protectionism.81x Kayla Scott, Steel Standing: What’s Next for Section 232?, 30 Duke Journal of Comp. & Int. Law 379, 404 (2020). [hereinafter Steel Standing] During its tenure, the Trump Administration further extended the scope of national security exceptions to include “the general security and welfare of certain industries”.82x The Wall on Trade, supra note 56, at 269. Yet a critical observer might challenge this overbroad definition and wonder, ‘Security of whom?’ and ‘Which industries?’ The answer to these questions is likely equally overbroad, encompassing anyone and any industry that proves convenient and opportune. Verifying the good faith of these international trade actions is unlikely, largely because the United States continually refuses to play by the rules of international law, seemingly asserting themselves as the omniscient leaders of the world.
      Notably, the definition of ‘national security’ has remained vague in American law, which only allows further discretion in national security measures. The Algonquin case is often cited as the leading Supreme Court interpretation of ‘national security’.83x FEA v. Algonguin SNG, Inc., 426 U.S. 548. However, the Court only determined that national security has a narrower threshold than ‘national interest’, a wanting explaining.84x Ibid. at 568-569. Congress has not interpreted or clearly defined ‘national security’ either, and in legislation the concept is consistently broad or vague.85x Laura K. Donohue, The Limits of National Security, 48 Am. Crim. L. Rev. 1573, 1580 (2011). In an investigation into the national security impacts of iron ore in 2001, the Department of Commerce linked national security to national defence, asserting that imports might threaten national security if the United States was overly dependent on imports, or if imports were unreliable.86x Bureau of Export Administration, The Effect of Imports of Iron Ore and Semi-Finished Steel on the National Security, U.S. Dept. of Comm. 4 (October 2001), www.bis.doc.gov/index.php/documents/technology-evaluation/66-the-effect-of-imports-of-iron-ore-and-semi-finished-steel-on-the-national-security-2001/ [hereinafter Effect of Imports of Iron Ore]. The report declared,

      [I]mports can threaten the national security if they fundamentally threaten the viability of U.S. industries and resources needed to produce domestically goods and services necessary to ensure U.S. national security.87x Effect of Imports of Iron Ore, supra note 86, at 4. Emphasis added.

      In other words, imports threaten national security if they do not bolster national security. Such a circular definition does not clarify or illuminate but rather further reinforces the power and discretion of the government to refashion and remodel as they see fit. Perhaps maintaining domestic supremacy is precisely the intention.
      The president of the United States has always had some domestic discretion in international trade policy, the general argument being that the president can best “represent utilitarian national interests in opening trade”.88x Steel Standing, supra note 81, at 404. The Trump Administration seemed to take this role to new extremes, maintaining Trump’s ‘America First’ policy as a priority, and “erecting protectionist walls around the economy” in the name of national security.89x The Wall on Trade, supra note 56, at 233. Likely not alone in her suspicions, one writer wonders whether the conventional wisdom behind presidential control in international trade policy showed “misguided in the Trump presidency”.90x Steel Standing, supra note 81, at 404. The previous Administration’s enthusiastic use of national security measures begs the question whether all US presidents acknowledge their obligations in international law, or whether some leaders consider themselves commander-in-chief of the WTO and the world at large. Regardless of a sitting president’s political position or personal opinions, the United States remains a WTO Member State, and as such, we must adhere to the associated obligations.

    • D The Battle for Sovereignty

      Though the United States is not the only WTO member to consistently consider themselves experts in matters of their own national security,91x The “National Security Exception” and the WTO, supra note 19, at 4. the United States does stand out as one country that may benefit from stricter confines to their sovereignty. The concern regarding the United States’ invocation of essential security measures has been steadily emerging for decades. In 1985, the Reagan Administration issued an executive order imposing a trade embargo on Nicaragua, claiming “an unusual and extraordinary threat to national security”.92x Exec. Order No. 12, 513, 3 C.F.R. 342 (1985). When Nicaragua brought the dispute to the GATT Council, the United States continued to argue both that the exception was self-judging and that only the United States had competence to determine its own security matters.93x GATT Council, Minutes of Meeting: Held in the Centre William Rappard on 29 May 1985, C/M/188 5 (28 June 1985), www.wto.org/gatt_docs/English/SULPDF/91150029.pdf. Though in general the Council agreed, many countries expressed concerns regarding the United States’ intentions. Nicaragua argued that for the United States to “suggest that Nicaragua, a small and underdeveloped country, could pose a threat to the national security of one of the most powerful countries in the world” was “absurd”.94x Ibid., at 3. Czechoslovakia worried about a precedent that the United States may have set in the embargo, to the extent that a country could reference Article XXI to justify any trade measures, and if such actions went unmonitored then this could have a negative impact on smaller, poorer countries who may have no recourse.95x Ibid., at 10. The Panel worried that if Article XXI were allowed to be entirely self-judging, then there would be no way to “ensure that this general exception to all obligations under the [GATT] is not invoked excessively or for purposes other than those set out in this provision”.96x Panel Report, United StatesTrade Measures Affecting Nicaragua, L/6053, Para. 5.17 (13 October 1986), www.wto.org/gatt_docs/English/SULPDF/91240197.pdf. Despite these apprehensions, the Panel failed to formally interpret Article XXI or restrict the embargo, leaving Nicaragua and other States to hope that a future Panel might tighten the reigns on the United States.
      America’s stubborn independence has also factored in their ongoing refusal to appoint a US member to the WTO Appellate Body (‘Appellate Body’) since 2017.97x Manfred Elsig et al., Trump Is Fighting an Open War on Trade. His Stealth War on Trade May Be Even More Important, Wash. Post (27 September 2017), www.washingtonpost.com/news/monkey-cage/wp/2017/09/27/trump-is-fighting-an-open-war-on-trade-his-stealth-war-on-trade-may-be-even-more-important/. Accordingly, the Appellate Body’s typical seven members has been whittled down to an unworkable number, effectively rendering the WTO paralysed and non-operational.98x Chad P. Bown & Soumaya Keynew, Why did Trump End the WTO’s Appellate Body? Tariffs, Peterson Inst. for Int’l Econ. (4 March 2020), www.piie.com/blogs/trade-and-investment-policy-watch/why-did-trump-end-wtos-appellate-body-tariffs. The United States has not been timid about the reasoning for its actions. In a Report by the Office of the United States Trade Representative under the Trump Administration, the Appellate Body was accused of

      [adding] to U.S. obligations and [diminishing] U.S. rights by failing to comply with WTO rules, addressing issues it has no authority to address, taking actions it has no authority to take, and interpreting WTO agreements in ways not envisioned by the WTO Members who entered into those agreements.99x Ambassador Robert E. Lighthizer, Report on the Appellate Body of the World Trade Organization, Office of the U.S. Trade Rep. (February 2020), https://ustr.gov/sites/default/files/Report_on_the_Appellate_Body_of_the_World_Trade_Organization.pdf [hereinafter Ambassador Report on the WTO].

      This statement paints a picture of an anarchical dispute settlement body reaching beyond the scope of its powers for decades. The Report continued,

      On a more fundamental level, this overreaching also violates the basic principles of the United States Government. There is no legitimacy under our democratic, constitutional system for the nation to submit to a rule imposed by three individuals sitting in Geneva, with neither agreement by the United States nor approval by the United States Congress.100x Ibid.

      The assertions here are confounding, inferring an undemocratic group of frauds rather than the collaborative multilateral organization that the U.S. had a seminal role in establishing.101x United States of America and the WTO, World Trade Org, www.wto.org/english/thewto_e/countries_e/usa_e.htm (last accessed 12 December 2020).
      Though the United States was not the first country to dispute some WTO actions (or inactions),102x Chad P. Bown & Soumaya Keynew, Why Did Trump End the WTO’s Appellate Body? Tariffs, Peterson Inst. for Int’l Econ. (4 March 2020), www.piie.com/blogs/trade-and-investment-policy-watch/why-did-trump-end-wtos-appellate-body-tariffs. the US perspective during the Trump Administration was particularly amplified by its appearance of a disgruntled pre-teen bemoaning the injustice of his curfew rather than of a leading world power. BBC News reported that former President Trump’s international trade methods were “driven to a large extent by his belief that the United States is […] unfairly treated by other countries”.103x Andrew Walker, What Trump Wants from Global Trade, BBC News (28 November 2019), www.bbc.com/news/business-50465651. Trump’s stance on tariffs and international oversight was clear even during his campaign,104x Jose A. DelReal & Sean Sullivan, Defying Republican Orthodoxy, Trump Trashes Trade Deals and Advocates Tariffs, Wash. Post (28 June 2016), www.washingtonpost.com/politics/defying-republican-orthodoxy-trump-trashes-trade-deals-and-advocates-tariffs/2016/06/28/3b47617e-3d5a-11e6-84e8-1580c7db5275_story.html. and Trump wasted little time in withdrawing from the North American Free Trade Agreement upon taking office.105x Andrew Chatzky, James McBride & Mohammed Aly Sergie, NAFTA and the USMCA: Weighing the Impact of North American Trade, Counc. on Foreign Rel. (last updated 1 July 2020), www.cfr.org/backgrounder/naftas-economic-impact. The assertion, over and over, was that the United States wants and intends to preserve their sovereignty, and that the United States makes its own rules. Though many have hoped that President Biden’s experience in foreign policy would lead to a correction of most, if not all, of the extreme positions taken by the Trump Administration and improve the United States’ position in global trade and international relations,106x See James McBride, After Trump: What Will Biden Do on Trade?, Counc. on Foreign Rel. (last updated 13 January 2021), www.cfr.org/in-brief/after-trump-what-will-biden-do-trade; David K. Li, Biden takes subtle dig at Trump: Make America respected again, NBC News (last updated 7 November 2020), www.nbcnews.com/politics/2020-election/live-blog/2020-11-07-trump-biden-election-results-n1246882/ncrd1247007#blogHeader. this has yet to be the case. Early on, the Biden Administration affirmed that “national-security disputes are not subject to WTO review because it would infringe on a member’s right to determine what is in its own security interests”.107x Bryce Baschuk, Biden Picks Up Where Trump Left Off in Hard-Line Stances at WTO, Bloomberg (last updated 22 February 2021), www.bloomberg.com/news/articles/2021-02-22/biden-picks-up-where-trump-left-off-in-hard-line-stances-at-wto.
      The US Trade Representative’s recent statements referring to the “three individuals sitting in Geneva”108x Ambassador Report on the WTO, supra note 99. bring to mind similar waves of nationalist ideals in global politics. Brexiteers claimed that “unelected bureaucrats of Brussels” made undemocratic decisions on behalf of the British people.109x Jennifer Rankin, Is the EU Undemocratic? The Guardian (13 June 2016), www.theguardian.com/world/2016/jun/13/is-the-eu-undemocratic-referendum-reality-check. Anti–European Union and populist sentiments are ‘mainstays’ of France’s Front National.110x Thomas Greven, The Rise of Right-Wing Populism in Europe and the United States, Friedrich Ebert Stiftung 2 (May 2016), http://dc.fes.de/fileadmin/user_upload/publications/RightwingPopulism.pdf. Parallel nationalist ideas have spread throughout Europe, with far-right parties gaining traction and power while touting comparable criticisms.111x Vivienne Walt, How Nationalists Are Joining Together to Tear Europe Apart, Time (11 April 2019), https://time.com/5568322/nationalism-in-europe/. The idea espoused over and over insinuates that there are two alternatives: either a group of foreigners with illegitimate power make decisions for us, or we run our own country. Under the Trump Administration, the United States planted its flag firmly in the latter camp. Trump was ‘Tariff Man’, spreading fear and seeking vengeance like Black Sabbath’s macho ‘Iron Man’. Many hoped that the fall of Trump would signify a change to come, with a regeneration of the WTO and a strengthening of standards and enforcement in international law.112x James McBride, After Trump: What Will Biden Do on Trade?, Counc. on Foreign Rel. (last updated 13 January 2021), www.cfr.org/in-brief/after-trump-what-will-biden-do-trade. During his campaign, Biden inspired optimism that his foreign policy experience would renew America’s participation at the WTO.113x See David J. Lynch, Biden aims for new course on trade, breaking with Trump and Democratic predecessors, Wash. Post (14 January 2021), www.washingtonpost.com/politics/2021/01/14/biden-trade-katherine-tai-tariff/. However, even post-Trump, the American government “continues to have systemic concerns” with the WTO Appellate Body and continues to block the appointment of new WTO panel members.114x Statements by the United States at the Meeting of the WTO Dispute Settlement Body, Geneva, 28 May 2021, p. 12, https://geneva.usmission.gov/wp-content/uploads/sites/290/May28.DSB_.Stmt_.as_.deliv_.fin_.public.pdf. The change in administration has not yet mended our nation’s international trade reputation or demonstrated that nationalist ideals are subsiding. If and when the WTO is revived, or when a Panel decision is eventually published in the case of steel and aluminium tariffs, the tightening of the reigns and clarifying of the boundaries of supremacy should be a priority.

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