It is almost that time of the year of for newly minted law graduates. There are days when I reflect on the growth of the rule of law in the international context and its importance for order and justice in the world. This included international trade law. But as we know the rule of law in this context remains vulnerable to local views and narrow national self-interest. When I was called to the bar (many years ago) the great criminal lawyer and fighter for civil rights. Author Maloney QC, quoted from the play about Sir Thomas More – A Man for All Seasons by Richard Bolt. When Sir Thomas is threatened by Richard Rich – a man seen as dangerous man, his family urges him to take whatever means necessary to dispose of him. ROPER Arrest him. ALICE Yes! MORE For what? ALICE He’s dangerous! ROPER For libel; he’s a spy. ALICE He is! Arrest him! MARGARET Father, that man’s bad. MORE There is no law against that. ALICE (Exasperated, pointing after RICH) While you talk, he’s gone! MORE And go he should, if he was the Devil himself, until he broke the law! ROPER So now you’d give the Devil benefit of law! MORE Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER I’d cut down every law in England to do that! MORE Oh? And when the last law was down, and the Devil turned round on you — where would you hide, Roper, the laws all being flat? This country’s planted thick with laws from coast to coast — man’s laws, not God’s — and if you cut them down — and you’re just the man to do it — d’you really think you could stand upright in the winds that would blow then? Yes, I’d give the Devil benefit of law, for my own safety’s...
Read MoreSteel, Aluminum, and the WTO’s Pandora’s Box – Part III
On May 31, 2018 the U.S. Secretary of Commerce, Wilbur Ross announced that the section 232 tariff on steel and the 10% tariff on aluminum would go into effect June 1st with respect to imports from Canada, the EU, and Mexico. All three had been give exceptions following the March 8th decision by the U.S. president to impose these measures pursuant to section 232 of the Trade Expansion Act 1962 on the basis of national security concerns. For more details regarding the decision and the products covered see our earlier report – https://www.wl-tradelaw.com/steel-aluminum-and-the-wtos-pandoras-box-part-ii/ and https://www.cbp.gov/trade/programs-administration/entry-summary/232-tariffs-aluminum-and-steel Earlier this month the U.S. Administration announced the initiation of a section 232 investigation into the imports of auto on a global basis (including Canada and Mexico). Canada, the EU. and Mexico reacted quickly with plans to launch trade challenges (WTO, NAFTA) and to retaliate within the next several weeks. For more details on Canada’s $16.6 Billion list of suggested products to be targeted (to be targeted commencing) July 1st ) see – https://www.fin.gc.ca/activty/consult/cacsap-cmpcaa-eng.asp Note Canadian individuals and firms are invited to comment within the next 15 days. More to...
Read MoreSteel, Aluminum, and the WTO’s Pandora’s Box – Part II
On Thursday March 8th, President Trump followed through on his threat to impose tariffs on all of steel (25%) and aluminum (10%) on a global basis. The Proclamations on the two products are notable in that it aims to link the tariffs to the national security of the United States. “The persistent threat of further closures of domestic steel production facilities and the “shrinking [of our] ability to meet national security production requirements in a national emergency.” This same rationale is used to justify exempting both Canada and Mexico. As the Proclamation on steel sets out: Given our shared commitment to supporting each other in addressing national security concerns, our shared commitment to addressing global excess capacity for producing steel, the physical proximity of our respective industrial bases, the robust economic integration between our countries, the export of steel articles produced in the United States to Canada and Mexico, and the close relation of the economic welfare of the United States to our national security … the necessary and appropriate means to address the threat to the national security posed by imports of steel articles from Canada and Mexico is to continue ongoing discussions with these countries and to exempt steel articles imports from these countries from the tariff, at least at this time. I expect that Canada and Mexico will take action to prevent transshipment of steel articles through Canada and Mexico to the United States. However the President added an important caveat and linked the exemption to the ongoing NAFTA negotiation: Without this tariff and satisfactory outcomes in ongoing negotiations with Canada and Mexico, the [aluminum and steel] industry will continue to decline, leaving the United States at risk of becoming reliant on foreign producers of steel to meet our national security needs — a situation that is fundamentally inconsistent with the safety and security of the American people … Note that “steel articles” are defined at the Harmonized Tariff Schedule (HTS) 6‑digit level as: 7206.10 through 7216.50, 7216.99 through 7301.10, 7302.10, 7302.40 through 7302.90, and 7304.10 through 7306.90, including any subsequent revisions to these HTS classifications. “Aluminum articles” are defined in the Harmonized Tariff Schedule (HTS) as:...
Read MoreSteel, Aluminum, and the WTO’s Pandora’s Box of National Security – Part I
President Trump has followed through on his promise to impose significant tariffs on imports of steel (25%) and aluminum (10%). Canada and Mexico were exempted in the context of the ongoing tri-lateral negotiations. As the President put it; “… we’re going to hold off to see “see whether or not we’re making a deal on NAFTA.” The threat of this action and then announcement that the duties will go into force within the next fifteen days has led to swift responses from U.S. trade partners and raises the spectre of a global trade war. The president appears to welcome a trade war as “good (and) easy to win.” The U.S. Administration is proceeding pursuant to Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. §1862) which authorizes the U.S. Secretary of Commerce to conduct comprehensive investigations to determine the effects of imports of any article on the national security of the United States. Although this issue appears to be new, the Department of Commerce initiated the Section 232 investigation in April 2017 in response to an order from the President. It has now completed its work It released its findings last week. Some may find that Section 232 is part of the Trade Expansion of Act of 1962 to somewhat ironic in that that legislation was passed by Congress in order to give the White House the to negotiate the deep tariff reductions that lead to the successful conclusion of the Kennedy Round of GATT. Ironic in that some commentators fear that we may now be moving back to the time of high tariffs and other trade barriers which helped contribute to the Great Depression of the 1930’s. Section 232 was written in the dark days of the Cold War and was included in the Act in order to give the President the ability to protect the national security of United States by reviewing the effects of imports of any articles in that context. If the Secretary of Commerce finds that imports threatens to impair U.S. national security, the President has broad power to impose trade remedies such as tariffs and quotas. It was inspired by and...
Read MoreGATT Article XXI’s National Security Exception – The Ultimate Trade Policy Conundrum
[Originally published 4/9/ 2015. Updated: 3/9/2018.] Is it a necessary “safety valve” or the “ultimate threat” that could reverse and unwind the sometimes slow, but relatively constant progress in global trade liberalization? When old friend and former Foreign Service colleague, Michael Virr, invited Catherine Walsh and me to discuss trade law with his Algonquin College (Ottawa) class, the topic was the GATT national security exception, which according to some, represents “the broadest and most controversial” of the GATT exceptions. The student’s played an active part in our discussion and both the students and their professor are to be congratulated for their passionate interest in trade law and their ability to engage in active, value-added dialogue on one of the discipline’s more complex subjects. The modern national security exception was introduced as a part of the original 1947 General Agreement on Tariffs and Trade (GATT) and has since remained in place in WTO disciplines and as part of most other major Free Trade Agreements. GATT 1994 Article XXI reads: Nothing in this Agreement shall be construed to require any contracting party to furnish any information the disclosure of which it considers contrary to its essential security interests; or to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests relating to fissionable materials or the materials from which they are derived; 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; taken in time of war or other emergency in international relations; or 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. The GATT 1994 and many other WTO agreements include general and specific exceptions as well as carve-outs and exemptions from their mandated obligations. A closer review of GATT Article XXI in comparison to other trade law exceptions reveals that Article XXI is distinct in that it is “self-declaratory.” Unlike the case with other exceptions commonly...
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