US Calls on WTO Members to Use Alternate Route for Nat'l Security Disputes
The U.S. warned World Trade Organization members this week against adjudicating national security matters, saying in a communication that they should instead bring a "non-violation claim" that would allow for the rebalancing of trade concessions and avoid "dragging" members into debates over political issues.
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The communication, sent Dec. 11, outlines guidelines for members to bring a "non-violation nullification or impairment claim" so they can avoid getting into issues of national security in traditional trade disputes. These claims can be used to challenge the national security measure, regardless of whether it breaches WTO rules, as long as the measure "nullifies or impairs a benefit, or impedes the attainment of an objective," as laid out by WTO rules, the U.S. said.
In these disputes, members would agree to arbitration, which would help set the "level of suspension equivalent to the level of nullification or impairment based on a claim of non-violation nullification or impairment," the U.S. said. It also said the complaining party would agree not to challenge the target country's national security reasoning, and the target country would agree not to contest the "claim of non-violation nullification or impairment" as long as the complaining party doesn't impose countermeasures. The parties also would agree that the complaining member may suspend tariff concessions "at the level equivalent to the level of nullification or impairment determined" by the arbitrator.
WTO members also should agree to an "authoritative interpretation" of the national security exception, the U.S. said. That interpretation would state that each WTO member can determine for itself "whether an action it takes is necessary" to protect its national security.
Simon Lester, head of WorldTradeLaw.net, said in a blog post that the measure raises some questions, including whether the U.S. is ready for the host of ensuing rebalancing arbitrations that will occur, given that the U.S. has invoked the national security exemption a lot in recent years. Lester wrote that the government's suggestions likely will need to be formalized to be effective, and questioned whether the new administration will take a similar view.