BUSINESS WTO ruling against US tariffs lauded

BUSINESS

WTO ruling against US tariffs lauded

China Daily

09:13, December 12, 2022

A technician at a steel production line of Magang Group, which is part of China Baowu Steel Group, in Ma'anshan, Anhui province. (Photo: China Daily)

The World Trade Organization's ruling against the United States' Section 232 tariffs on steel and aluminum imports is a victory for multilateralism and shows the strong resilience of the multilateral trading system, according to experts.

The ruling, which decided that the tariffs imposed by the US do not qualify as a national security measure under WTO rules, is also of great significance in a world with growing protectionism, as some countries try to generalize the concept of national security for political purposes, they said.

In the adjudicating panel's ruling on four separate challenges released on Friday, the WTO said the US' measures were inconsistent with the General Agreement on Tariffs and Trade 1994 and cannot be justified under international trade rules. The challenges were made by China, Norway, Switzerland and Turkiye. The panel recommended that the US make its "WTO-inconsistent measures" conform with its obligations under the agreement on tariffs and trade.

The US levied duties of 25 percent on steel — 50 percent for steel imports from Turkiye — and 10 percent on aluminum imports in 2018 under Section 232 of the US Trade Expansion Act of 1962, arguing that the measures were needed for national security purposes.

"Widely opposed by its trading partners, the US move, as a matter of fact, was out of unilateralism. It has set a terrible precedent of abusing the concept of national security for trade protectionism," said Zhao Hong, a professor at Peking University's Law School and former chairperson of the WTO Appellate Body.

"The WTO ruling... is a great victory against unilateralism, and can also be viewed as a special review on the abuse of national security content of WTO rules," she said.

Since 2018, a dozen cases filed for WTO dispute settlement have involved national security arguments, she said, adding that the panel reports have been crucial in clarifying national security exception provisions of WTO rules and determining the rights and obligations of WTO members in this regard.

Huo Jianguo, vice-chairman of the China Society for World Trade Organization Studies, also said the ruling was significant, adding that it reaffirmed the authority of the organization in settling international trade disputes.

"The ruling has again showed multilateralism is still upheld by most countries. It is wrong for the US to generalize the concept of national security to disrupt normal economic activity of other countries," he said.

"Global trade rules under the multilateral trading system allow some special measures in cases of national security, but they usually refer only to wars, or other emergencies in international relations, and should not be generalized and abused," he said.

He also said the US cannot appeal the ruling to the WTO Appellate Body, due to its own actions. The US has repeatedly blocked nominations of members to the appeals body, rendering it unable to hear any new cases.

A Ministry of Commerce spokesperson said on Saturday that China appreciates the objective and fair rulings of the WTO panel. China hopes that the US will respect the decision and WTO rules to correct its wrongful practices as soon as possible, and meet halfway with other WTO members, including China, to safeguard the multilateral trading system, the spokesperson said in a statement.

The US selectively imposed additional tariffs on steel and aluminum products from some WTO members under so-called national security concerns. The actions pursue unilateralism and protectionism, and severely damage the rules-based multilateral trading system, the spokesperson said.

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