Simon Lester, researcher at the Cato Institute <\/em>\n<\/p><\/blockquote>\nIn comments last month on why the U.S. opposed the creation of the panels, U.S. Ambassador Dennis Shea warned that the case would \u201cundermine \u2026 the viability of the WTO as a whole.\u201d In short, Trump could just walk.<\/p>\n
The EU, by contrast, has argued that the case is a point of principle.<\/p>\n
\u201cOf course we had to take this case to court, and we would do again if they launched tariffs on cars and car parts,\u201d said Maria \u00c5senius, chief of staff to Trade Commissioner Cecilia Malmstr\u00f6m. \u201cThe U.S. says that its a national security justification \u2026 and now they threaten to do it with cars and car parts, next time maybe French wine.\u201d<\/p>\n
\u201cIf they can decide themselves anything is a national security interest \u2026 you dont have any rules anymore in the WTO.\u201d<\/p>\n
In comments earlier this month, Chinas ambassador to the WTO Zhang Xiangchen said the WTOs national security exemption \u201cshould not be used in an abusive way\u201d and \u201csecurity issues should not be used as an excuse to restrict normal bilateral trade.\u201d<\/p>\n
A common position from the EU and China is a blow to many European and American officials, who had hoped that the trade war would morph into a united front against Beijing. The Trump administration has just unveiled a hardline policy on China. U.S. Vice President Mike Pence last week delivered a blistering speech against China, saying that Washington was in no rush to end the trade war and \u201cwould not change course until China changes it ways.\u201d<\/p>\n
The cases against the national security justification are not the first to reach WTO panels. There are two other cases still under investigation \u2014 involving Qatar and Russia \u2014 but the U.S. case is by far the most geopolitically significant. There has never been a ruling on the legitimacy of the national security defense.<\/p>\n
The WTO panels should issue a decision within nine months. However, any further discussions over retaliation and appeals could take years.<\/p>\n
The EU has already retaliated against the U.S. over the steel tariffs with countermeasures that the U.S. says are illegal.<\/p>\n
\u201cI dont think the WTO dispute settlement mechanism can resolve this dispute. A ruling will make one side or the other very unhappy, which could undermine the WTO,\u201d said Simon Lester, a researcher at the Cato Institute specializing in trade law.<\/p>\n
He argued the decision to challenge the national security justification was \u201ctaken probably more out of principle than as part of a strategy to get the tariffs removed.\u201d<\/p>\n
However, he added that the decision to request a panel also signals the EU is willing to be more aggressive. \u201cThe EU has realized that the soft approach to the U.S. administration hasnt worked,\u201d he said.<\/p>\n
Maxime Schlee and Hans von der Burchard contributed reporting. <\/em><\/p>\n