National Security and Trade Wars: Legal Implications for Multelateralism

Over the past few years the US has made extensive use of national security clauses at different levels. In the context of international trade, the use of section 232 of the Trade Expansion Act of 1972 has constituted the legal basis for the introduction of duties for aluminum and steel imports and more recently for the threat of further trade measures in relation to imports of cars. The “national security exception” allows WTO members to breach their WTO obligations for purposes of national security. The use of the security exception can be explained from a legal point of view by the vexata quaestio of the justiciability of the clause in international trade and in particular in the context of the WTO system. On 5 April 2019, a WTO dispute settlement panel (WT/DS512/R) issued a fundamental ruling in a dispute between Russia and Ukraine in which Russia claimed it had taken trade-restrictive measures for the purpose of protecting its national security. The WTO panel rejected the Russian argument that the article is non-justiciable and affirmed that actions taken under Article XXI(b) are reviewable on the basis of objective elements. According to the Panel, the security exception must be objectively observed. The panel’s outcome may have some consequences for the US defense of its steel and aluminum tariffs at the WTO (and potentially on the future use of the security clause at international level).