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GENEVA (BLOOMBERG) – China and the EU have joined a group of countries asking the World Trade Organization to investigate the Trump administration 's decision to impose tariffs on metals for reasons of national security, thus creating a new front in a trade war that shook world markets.
This decision paves the way for a confrontation at the WTO that, in the opinion of some, could lead to an exit from the United States or a flood of new protectionist measures invoking what was until now a loophole in national security in the rules of world trade.
The United States stated that imported steel and aluminum duties imposed at the beginning of the year were allowed under the WTO exemption. on national security, which allows governments to take "whatever action they deem necessary for the protection of their essential security interests".
This has drawn the attention of affected countries, many of whom are close American allies, such as the European Union and Canada.
Until now, countries have refrained from challenging this in the WTO. In a statement issued on Thursday, Norwegian Foreign Minister Ine Eriksen Soreide said her country and other countries had chosen to request the establishment of a dispute settlement panel to l & # 39; WTO.
"We believe that the additional duties imposed by the United States on steel and aluminum are in violation of the WTO rules," she wrote.
A spokesman for the US Trade Representative's office did not immediately respond to a request for comment. A spokesman for the WTO declined to comment on this case.
NATIONAL SECURITY
The dispute places the Geneva-based trade organization in a difficult position: if it decided to support the United States, it could encourage other members to adopt protectionist measures under the pretext of national security. If it speaks out against the United States, it is likely to spark the world's largest economy and a possible withdrawal from the Trump administration.
The "worst result" for the WTO is that the dispute settlement system "decides that it was able to judge whether something was or was not in accordance with the US national security interests or any other member, "said US Trade Representative Dennis Shea said in an October speech in Washington.
METAL RATES
Applications will be reviewed at the next meeting of the WTO Dispute Settlement Body scheduled for October 29th.
Nine members of the WTO – Canada, China, the EU, India, Mexico, Norway, Russia, Switzerland and Turkey – have filed initial complaints alleging that the Trump 's tariffs on steel and aluminum were contrary to the rules of the WTO. But Thursday's move significantly brings litigation closer to a formal case.
The complaints differ slightly, but each country alleges that the measures violate basic WTO agreements such as the General Agreement on Tariffs and Trade, or GATT, and the WTO Safeguards Agreement, which governs the use of temporary trade restrictions, called guarantees.
In July, the United States declared that its customs duties had been authorized under section 232 of the Trade Expansion Act of 1962, which authorizes the President to impose trade restrictions if imports were detrimental to the national security of the United States.
The United States argued that WTO members were legally entitled to impose national security tariffs under Article 21 of the GATT, which allows a government to take "any measure he deems necessary for the protection of his essential security interests".
& # 39; AMERICA FIRST & # 39;
If the WTO determines that national security measures are not allowed under the National Security Exemption, it could then ask Trump to restore an essential tool of its "America First" trade arsenal. .
Conversely, if the WTO subscribes to the US argument, it could encourage Trump to apply national security tariffs on cars and to promote the proliferation of other new authorized trade restrictions. under the pretext of national security.
The US Department of Commerce is currently conducting an investigation to determine whether foreign imports of automobiles and auto parts have a negative impact on the national security of the United States. The investigation is identical to the Trump administration's early-year process, which triggered 25% tariffs on steel and 10% on aluminum to protect the national security of states. -United.
This decision also comes when the Trump government launched a broader attack on the WTO dispute settlement system, which it accuses of being excessive.
Since last year, the United States has blocked the appointment of new members of the WTO appeals body, thereby reducing the number of appeal judges in Geneva from seven to three people.
If nothing changes, this number is expected to decrease further by the end of next year, preventing the body from forming the appeal board of three members required to hear the dispute.
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