TY - JOUR
AU - Lee,, Yong-Shik
AB - Abstract In March 2018, the USA adopted measures to increase tariffs on a range of imported steel and aluminum products, claiming that the measures are justified for its national security concerns. Several World Trade Organization Members, including the European Union, India, Russia, Turkey, and China, have argued that the US measures are in violation of WTO rules on safeguard measures and adopted retaliatory measures invoking Article 12.5 of the Agreement on Safeguards. The USA argues that its measures do not constitute safeguard measures under WTO rules, and, therefore, the retaliatory measures are not justified under the SA. This article reviews relevant cases and examines whether the US measures are safeguard measures under the SA and whether the retaliatory measures are also justified under the SA. The article also discusses the need for regulatory reform to address the issues with unilateral trade measures and retaliation. INTRODUCTION In March 2018, the Trump administration adopted trade measures that increased tariffs on steel and aluminum products by 25 percent and 10 percent, respectively, in addition to any duties already in place, including anti-dumping and countervailing duties.1 The new tariffs went into effect as of 23 March 20182 and raised worldwide concern. The US government justified the tariffs on national security grounds; the Department of Commerce had conducted investigations into the effect of imports of steel and aluminum products on the national security of the USA under section 232 of the Trade Expansion Act.3 They found that steel and aluminum products were imported into the USA ‘in such quantities and under such circumstances as to threaten to impair the national security of the United States’4 and these concerns justified actions to adjust the imports of steel articles and aluminum (the steel and aluminum tariffs) as necessary to ensure that ‘such imports will not threaten to impair the national security.’5 The Trump administration applied the steel and aluminum tariffs to all imported products of iron or steel [Harmonized Tariff Schedule (HTS) heading 9903.80.01] and all categories of aluminum imports (HTS heading 9903.85.01).6 The extensive tariffs provoked challenges from major steel and aluminum exporting countries, including the European Union (EU), China, Japan, Mexico, Canada, India, Norway, Russia, Switzerland, and Turkey.7 Several of them, including the EU, China, Mexico, Canada, Russia, India, and Turkey, adopted retaliatory measures in the form of their own tariff increases on imports from the USA.8 These countries did not agree that the US measures are justified by its national security concerns but concluded that they are a disguised trade protection inconsistent with World Trade Organization (WTO) rules.9 Several retaliating countries, including the EU, India, Russia, China, and Turkey, justified their own measures under the provision of the WTO Agreement on Safeguards (SA) and made due notifications to the Committee on Safeguards.10 Article 8.2 of the SA authorizes the suspension of ‘the application of substantially equivalent concessions or other obligations under General Agreement on Tariff and Trade (GATT) 1994, to the trade of the Member applying the safeguard measure.’11 Pursuant to the provisions of Article 8.2, the retaliating countries adopted their own measures against imports from the USA. The USA disagrees that its tariffs are safeguard measures under the SA; thus, it argues that the provisions of the latter do not apply to its measures to protect national security; therefore, there is no legal basis for the retaliatory measures.12 The USA challenged the retaliatory measures and referred them to the WTO Dispute Settlement Body (DSB) to determine their conformity with WTO rules.13 This article reviews whether the retaliatory trade measures are justified under the SA. The main question that determines this issue is whether or not the US measures, adopted for the claimed necessity of its national security concerns, are safeguard measures under WTO rules subject to the application of the provisions of the SA. The next section examines the nature of safeguard measures to address this question. Based on the preceding discussion, Section II attempts to determine whether the retaliatory trade measures are justified under the SA. Section III explores possible regulatory reform. There is an observation that the judicialized approach of the WTO works poorly when a member behaves in an opportunistic fashion on a matter of considerable economic impact. This section also addresses this issue and considers whether any solution can be found in the WTO, as opposed to a reversion to pre-WTO tit for tat interaction. Section IV draws conclusions that the US measures are not safeguards and the retaliatory measures by the EU are not justified under the SA. I. THE NATURE OF SAFEGUARDS A. Safeguards as emergency import restraints ‘Safeguards’ or ‘safeguard measures’ are emergency import restraints applicable in the form of additional tariff or quota when increased imports cause serious injury to a competing domestic industry of the importing country.14 Article 2.1 of the SA describes the nature of safeguards: A Member may apply a safeguard measure to a product only if that Member has determined [...] that such product is being imported into its territory in such increased quantities, absolute or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to the domestic industry that produces like or directly competitive products.15 (footnotes omitted) WTO legal disciplines require that the member countries of the WTO (‘Members’) maintain their negotiated concessions for imports,16 in the form of the maximum tariff bindings, unless they are modified in accordance with relevant rules.17 This requirement is essential for the stabilization of the international trading system and for further promotion of trade. There are limited exceptions to the rule, and safeguards, due to the emergency nature, are one such exception, which can be applied irrespective of the importing Member’s obligation under its binding concessions. The WTO Appellate Body iterated the emergency nature of safeguards. It observed that ‘safeguard measures are extraordinary remedies to be taken only in emergency situations. Furthermore, they are remedies that are imposed in the form of import restrictions in the absence of any allegation of an unfair trade practice. In this, safeguard measures differ from, for example, anti-dumping duties and countervailing duties to counter subsidies, which are both measures taken in response to unfair trade practices. If the conditions for their imposition are fulfilled, safeguard measures may thus be imposed on the “fair trade” of other WTO Members and, by restricting their imports, will prevent those WTO Members from enjoying the full benefit of trade concessions under the WTO Agreement.’18 This indicates that safeguards could generate an economic loss for trading nations. Why then are such emergency import restraints necessary? WTO legal disciplines require Members to commit to market access through liberalization,19 which has indeed been achieved through rounds of trade negotiations from the GATT era.20 This market liberalization may well cause rapid increases in imports for importing countries, and safeguard measures may function as a ‘safety net’ against rapid increases in imports.21 Safeguards are intended to relieve the importing countries of the economic and social problems that rapidly increasing imports may cause, such as unemployment, by enabling the government to maintain the status quo through temporary import restraints. Safeguards are also meant to facilitate the economic adjustment of the importing country facing increased competition with imports,22 although there is no consensus on the economic justification for safeguards, and there is disagreement as to whether safeguards are the best way to facilitate the needed economic adjustment for the importing country.23 Economists consider that trade restrictions, including safeguards, tend to lower the net welfare of the economy, while consumers lose and producers gain economic welfare.24 Notwithstanding the economic issues, safeguards contribute to securing an open trading system on a multilateral basis, because the availability of safeguards provides a cover against political pressure to protect domestic industries, thereby making it easier for the government to agree on market access.25 Finally, as the Appellate Body indicated above, safeguard measures are also distinguished from some other forms of import restrictions such as anti-dumping actions and countervailing duties that are applied on the basis of ‘unfair’ trade practices by exporters. The latter measures are applied to offset the ‘unfair’ advantages gained by exporters from price undercuts and subsidies, respectively, but safeguards are applicable regardless of the existence of any unfair practice on the part of the exporter, and ‘fair’ trade could be affected by safeguards solely for the need of the importing country. This means that safeguards should be applied sparingly, again as temporary emergency measures, because their abuse could lead to the destabilization of the multilateral trading system.26 B. Safeguards as replacement for gray-area measures Safeguards are also important because they are intended to replace gray-area measures, which refer to voluntary restrictions on trade proliferated in the 1970s and 80s and applied in the form of export restraining agreements between the exporting and importing countries, such as voluntary export restraints (VERs), orderly marketing arrangements (OMAs), voluntary restraint agreements (VRAs), and other similar bilateral agreements restraining trade.27 These measures are called the ‘gray-area measures’ for the ambiguity of rule breach since the measures are adopted in the form of voluntary agreement between the exporting and importing countries, although those measures arguably violated GATT Articles XI and XXIII, which generally prohibit quantitative restrictions as well as nullification or impairment of the benefit accruing to a contracting party under the GATT. The forms of the trade restrictions adopted by gray-area measures included restrictions on the value (volume) of export sales, restrictions of market share, limits on the increase in export supplies, setting of the minimum export prices, and restrictions on the conditions and timing of distribution.28 The proliferation of gray-area measures was concurrent with the expansion of exports from East Asian economies, such as Japan, Taiwan, Hong Kong, and South Korea. Their exports, many in key industrial areas such as automobiles, increased substantially since the 1960s, and these export increases raised concerns for competing domestic producers in European countries and the USA.29 Pressured by their domestic producers, the USA and Europe sought ways to limit imports from those Asian countries. Safeguards were available under the provisions of GATT Article XIX, but they were considered cumbersome, as Article XIX measures required injury assessment and compensation, and the application of safeguards may result in retaliation absent agreement on compensation.30 Therefore, the importing countries instead negotiated gray-area measures with the export countries outside the GATT disciplines. Threatened by the importing countries to adopt even harsher measures, such as prohibitively high tariffs and restrictive quotas, the exporting countries accepted gray area measures.31 The prevalence of these measures created a systematic issue in the GATT, as it substantially undermined free trade that the GATT system advocated.32 Due to the problem, the new WTO Safeguards Agreement prohibits the gray-area measures altogether,33 replacing them with temporary safeguards with several procedural and substantive requirements for their applications. As an incentive for the compliance with this prohibition, the SA suspends the exporting country’s right to retaliation in response to a safeguard for the first three years that a safeguard measure is in effect, provided that the safeguard measure has been taken as a result of an absolute increase in imports and that such a measure conforms to the provisions of the SA.34 The prohibition is one of the most important contributions made by the SA and perhaps by the Uruguay Round for the achievement of an open and freer multilateral trading system, as this prohibition finally removed gray-area measures that are not consistent with the objectives of the multilateral trading system. After twenty-five years of the conclusion of the SA, however, this important achievement is challenged by the actions of the Trump administration. In the period from April and May, 2018, the USA reached a series of steel quota agreements with Brazil, Argentina, and South Korea and an aluminum quota agreement with Argentina in exchange for waiving these countries from the additional tariffs on steel (for Brazil, Argentina, and South Korea) and aluminum products (for Argentina).35 For example, the USA and Korea agreed quotas on 54 iron or steel product categories under HTS code, ranging from 0 kg (quota filled and no import allowed, for HTS heading 9903.80.43: bars and rods, hot-rolled, in irregularly wound coils, of stainless steel, provided for in heading 7221.00.00, except for statistical reporting numbers 7221.00.0005, 7221.00.0045, and 7221.00.0075) to 460,867,818 kg annually (HTS heading 9903.80.18: oil country pipe and tube goods).36 This is a completely controlled trade of iron and steel products between the USA and Korea, which is not consistent with the objectives of the multilateral trading system that promotes freer and open trade and also in suspect violation of SA Article 11.1(b) as further discussed below. The steel and aluminum quota agreements are not consistent with the provisions of the SA prohibiting all gray-area measures (irrespective of whether the US steel and aluminum tariffs are ultimately decided as safeguards), because the quota agreements attempt to limit the export amounts of steel and aluminum products from these countries,37 although the USA may argue, under Article 11.1(c) of the SA,38 that the agreements are justifiable under the provisions of GATT Article XXI. GATT Article XXI indeed authorizes Members to adopt measures necessary to protect its essential security interests. However, the permitted grounds for Article XXI measures are limited (e.g. (i) relating to fissionable materials or the materials; (ii) 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; and (iii) taken in time of war or other emergency in international relations).39 Thus, the provisions of Article XXI are not likely to cover the US tariffs or quota agreements on such a wide range of steel and aluminum products as further examined in the following section. The proliferation of gray-area measures will endanger one of the most important achievements of the Uruguay Round and may lead to the destabilization of the world trading system. II. THE US STEEL AND ALUMINUM TARIFFS AND THE RETALIATORY MEASURES A. Justification of the US tariffs under GATT Article XXI The retaliatory measures are adopted in response to the US tariffs that the USA justifies for national security grounds under GATT Article XXI. The analysis of the Article XXI justification is not the main theme of this paper, but a brief analysis of the issue will nevertheless be useful to understand the context in which the measures have been adopted. The Members challenging the US measures maintain the view that the US tariffs are a disguised trade protection unjustified by Article XXI.40 There is a relevant historical context to support this view; for decades the USA has endeavored to protect the declining domestic steel and aluminum industries, adopting a number of trade measures such as numerous anti-dumping measures.41 Thus, in this historical context, invoking the national security ground for these industries that the USA has always attempted to protect has not raised much credibility among Members.42 The questionable US motive set aside, the scope of the national security interests that the USA has defined does not seem to be consistent with the requirement of Article XXI that a Member may adopt a measure that it considers necessary for the protection of its ‘essential security interests’.43 Although Article XXI does not provide a formal definition for this term, the Article limits the scope of these interests, e.g. (i) relating to fissionable materials or the materials; (ii) 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; and (iii) taken in time of war or other emergency in international relations.44 The following passage also indicates that the drafters of the article did not intend to grant Members full discretion on the judgment of the national security ground under Article XXI: We recognized that there was a great danger of having too wide an exception and we could not put it into the Charter, simply by saying: ‘by any Member of measures relating to a Member’s security interests,’ because that would permit anything under the sun. Therefore, we thought it well to draft provisions which would take care of real security interests and, at the same time, so far as we could, to limit the exception so as to prevent the adoption of protection for maintaining industries under every conceivable circumstance [...] [T]here must be some latitude here for security measures. It is really a question of balance. We have got to have some exceptions. We cannot make it too tight, because we cannot prohibit measures which are needed purely for security reasons. On the other hand, we cannot make it so broad that, under the guise of security, countries will put on measures which really have a commercial purpose.45 The issue with the US measures is that the scope of the national security interests is set too broadly; the US investigation reports identify the essential security interests as ‘national defense’ and ‘critical infrastructural needs’.46 There would be little debate as to what is required for national defense would be justified under Article XXI, but the latter is more controversial; as the reports include a wide range of infrastructure items, including ‘chemical production, communications, dams, energy, food production, nuclear reactors, transportation systems, water, and waste water systems’47 (in the steel report) as well as ‘energy (electric power transmission and distribution (over 6,000 power plants)); transportation (aircraft, automobiles, railroad freight cars, boats, ships, trains, trucks, trailers, wheels); containers and packaging (cabinets, cans, foils, storage bins, storage tanks); construction (bridges, structural supports, conduit, piping, siding, doors, windows, wiring); and manufacturing (machinery, stampings, castings, forgings, product components, consumer goods, heating and cooling devices, and utility lighting fixtures)’ (in the aluminum report).48 The reports do not offer any explanation as to why such a broad range of items, including all kinds of transportation devices and all components of construction are relevant to essential national security interests. If the ‘essential’ national security interests under Article XXI were to include items of everyday use without particular security connotations (e.g. windows, cabinets, and consumer goods), Article XXI can be used to justify limiting imports on just about any conceivable product, such as automobiles, presently under consideration by the Commerce Department, semiconductors, ships, and many others, whenever there is a sign of some difficulty in relevant industries. This development would not be consistent with the intent of the drafters to limit the scope of the protected national security interests so that ‘under the guise of security’, Members will not ‘put on measures which really have a commercial purpose’.49 The USA maintains the position that the issues of national security are political matters not susceptible to review or capable of resolution by WTO dispute settlement, and every Member retains the authority to determine on the national security issue under Article XXI.50 However, there is nothing in WTO jurisprudence that supports such an unlimited discretion under Article XXI, which would undermine the balance sought by the drafters, as cited above, and may also threaten the stability of the world trading system. B. Retaliatory measures against the steel and aluminum tariffs Several countries, including the EU, China, Mexico, Canada, India, Russia, and Turkey, are affected by the US tariffs and adopted retaliatory measures in the form of their own tariff increases on imports from the USA.51 The retaliatory measures, all in the form of increased tariffs (from 5 percent to 50 percent) have targeted a variety of products, including agricultural, industrial, and steel and aluminum products exported from the USA.52 Many of these products are produced in the regions in the USA, including the ‘Rust Belt’,53 known to be the political base for President Trump seeking to protect the economic interests of these regions by adopting the steel and aluminum tariffs in the first place. The USA objects to the retaliatory measures, as they are inconsistent with WTO rules, including GATT Article I, citing that the retaliating countries ‘fail to extend to products of the United States an advantage, favor, privilege or immunity’ granted by the retaliating importing countries ‘with respect to customs duties and charges of any kind imposed on or in connection with the importation of products originating in the territory of other Members’.54 The USA also argues that the additional duties nullify or impair the benefits accruing to the USA directly or indirectly under the GATT 1994.55 The USA has brought the retaliatory measures to the WTO DSB for adjudication.56 The retaliating countries characterize the US tariffs as safeguards (but not compliant with the SA).57 The EU, for instance, argues that the US measures are safeguard measures in the form of a tariff increase on imports of certain steel and aluminum products (at rates of 25 percent and 10 percent, respectively), effective from 23 March 2018 and with an unlimited duration,58 and does not accept the US view that these measures are justifiable under GATT Article XXI for national security grounds.59 This is the key point of controversy; the USA denies the existence of safeguards and maintains that the measures are tariffs on imports of steel and aluminum that ‘threaten to impair the national security of the United States’60 and that it has discretion on the judgment of the matter under Article XXI.61 C. The characterization of US steel and aluminum tariffs The WTO compliance of the retaliatory measures hinges on the question whether the US measures are safeguards under the SA. The retaliatory measures are WTO-compliant if the US measures are safeguards but not compliant with the rules of the SA. Under Article 8.3 of the SA, the exporting country’s right to retaliation in response to a safeguard is suspended for the first three years that a safeguard measure is in effect, but there are two other conditions: (i) the safeguard measure has been taken as a result of an absolute increase in imports and (ii) that such a measure conforms to the provisions of the SA.62 Thus, the suspension does not apply if a measure does not conform to the provisions of the SA.63 Several complaining countries adopted the retaliatory measures on this basis.64 The complainants are in agreement that the US tariffs are safeguards not compliant with the SA. The EU argued that the USA breached Article 2.1 of the SA by applying safeguard measures ‘without first having determined, pursuant to the subsequent provisions of the Agreement on Safeguards, that such products are being imported into its territory in such increased quantities, absolute or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to the domestic industry that produces like or directly competitive products’.65 Other Members have concurred;66 in the April 2018 meeting of the Committee on Safeguards, China, for example, also argued that the US tariffs were safeguards because the tariffs were based on the conclusion of the US investigation reports that the steel and aluminum imports ‘had injured the domestic industry’.67 The USA does not argue on the rule compliance with the provisions of the SA but contends that the SA is not applied to the US measures as it has been applied for national security concerns.68 It stated: The EU’s request purports to be pursuant to Article 14 of the Agreement on Safeguards. However, the tariffs imposed pursuant to Section 232 are not safeguard measures but rather tariffs on imports of steel and aluminum articles that threaten to impair the national security of the United States.[…] [T]here is no basis to consult pursuant to the Agreement on Safeguards […].69 To determine the question of the applicability of the SA to the US tariffs, it is necessary to examine the nature of safeguard measure in consideration of its key elements. The question is whether a measure that suspends a concession that is not justified by any WTO rule should be considered a safeguard. In Indonesia—Safeguard on Certain Iron or Steel Products (Indonesia—Iron or Steel Products), the EU argued that the suspension of an obligation and/or the withdrawal or modification of a concession is the defining feature of safeguard measures.70 The Appellate Body, however, found that it is not sufficient. According to the Appellate Body ruling, the measure must ‘suspend, in whole or in part, a GATT obligation or withdraw or modify a GATT concession’ (which is in line with the EU argument) but, additionally, ‘must be designed to prevent or remedy serious injury to the Member’s domestic industry caused or threatened by increased imports of the subject product’.71 The Appellate Body elaborated on these guidelines in the following passage: In order to determine […] a panel is called upon to assess the design, structure, and expected operation of the measure as a whole. In making its independent and objective assessment, a panel must identify all the aspects of the measure that may have a bearing on its legal characterization, recognize which of those aspects are the most central to that measure, and, thereby, properly determine the disciplines to which the measure is subject. As part of its determination, a panel should evaluate and give due consideration to all relevant factors, including the manner in which the measure is characterized under the domestic law of the Member concerned, the domestic procedures that led to the adoption of the measure, and any relevant notifications to the WTO Committee on Safeguards. However, no one such factor is, in and of itself, dispositive of the question of whether the measure constitutes a safeguard measure within the meaning of Article 1 of the Agreement on Safeguards.72 (footnote omitted) This guideline is applicable to the assessment of the US tariffs. The US measures fulfill the first prong—the suspension of a GATT obligation or withdrawal or modification of a GATT concession73—because the US measures, by imposing the additional tariffs on steel and aluminum products, suspend its obligation under the concession.74 The second prong—whether the measure is designed to prevent serious injury to the domestic industry75—is not as straightforward and requires further analysis, including the procedural aspects (‘the manner in which the measure is characterized under the domestic law of the Member concerned and the domestic procedure’) and the substantive elements. As to the procedural matter, the US government applied section 232 of the Trade Act that covers national security grounds for trade measures, instead of section 201, a separate provision applied for the imposition of a safeguard measure.76 Consequently, the US government followed the procedures under section 23277 and not the section 201 procedure that includes the injury assessment required by the SA. The USA has not made notification to the WTO Committee on Safeguards at any stage of its investigation process and the adoption of the tariffs. Thus, from the procedural perspective, the manner in which the US measures are characterized under the US domestic law concerned (section 232), the domestic procedures that led to the adoption of the measure and the absence of any relevant notifications to the WTO Committee on Safeguards support the position that the US measures were not safeguards under the SA. On the substantive elements, the core element of a safeguard under the Appellate Body guide is a remedy of the injury,78 but the formal documents do not make references to injury or injury analysis. For instance, the Proclamations do not make any reference to injury to the domestic industries or to injury analysis but instead state the necessity to reduce imports of steel and aluminum products for national security concerns.79 Substantively, it may not be straightforward to determine whether a measure is an Article XXI action or a safeguard measure where the measure appears to have multiple objectives: i.e. protecting the domestic industries as aimed by a safeguard measure while the purpose might also include the protection of national security under Article XXI. The following case illustrates the complexity associated with this type of situation. In European Communities—Measures Affecting the Approval and Marketing of Biotech Products (the Biotech case), the WTO panel found that the European Communities (EC) applied a general de facto moratorium on the approval of biotech products between June 1999 and August 2003 (even if the EC had categorically denied its existence).80 The EU measures had objectives covered by the Sanitary and Phytosanitary (SPS) Agreement as well as those outside the scope of the SPS Agreement.81 The complainants contended that as soon as a measure covers an SPS objective, the SPS Agreement applies exclusively, but the EU argued that its requirements should be considered an SPS measure to the extent it is applied for one of the purposes enumerated in Annex A(1) and also a non-SPS measure to the extent it is applied for a purpose that is not covered by Annex A(1).82 The panel considered the latter position more appropriate but also clarified that its view is premised on the ‘circumstance that the requirement at issue could be split up into two separate requirements which would be identical to the requirement at issue, and which would have an autonomous raison d’être, i.e., a different purpose which would provide an independent basis for imposing the requirement.’83 Does this have an application to the US tariffs? There is a parallel between the Biotech case and the US tariffs; in both cases, the question about the multiplicity of objectives may arise: in the Biotech case, an SPS objective and non-SPS objective and in the US tariffs, the protection of national security and the protection of domestic industries for a commercial purpose. However, there is a distinction between the two cases: in the Biotech case, there was no controversy about the existence of multiple objectives; the EU, which adopted the measure in question, acknowledged the multiplicity of objectives and even argued that different WTO provisions could be applied in accordance with the relevant objectives.84 In the US tariffs, however, the USA denies the existence of any objective to be covered by the SA (i.e. the protection of domestic industries for a commercial purpose) but argues that the sole objective of its tariffs is the protection of national security.85 The WTO panels and the Appellate Body repeatedly held that they will not engage in a de novo review of national authorities’ investigations, as it is outside the standard of review,86 and they are not likely to engage in an analysis presuming the existence of an objective denied by a Member applying the measure. Even if the existence of multiple objectives were to be presumed, it is not clear whether the US tariffs could be split up into separate requirements allowing the application of different provisions.87 In another case, European Communities—Measures Prohibiting the Importation and Marketing of Seal Products (the Seal case),88 the EU seal ban pursued two objectives: public morals (animal welfare concerns of EU citizens) and protection of indigenous people (protecting their livelihood by allowing seal exports into the EU market).89 The Appellate Body looked for the core objective and found it to be public morals under GATT Article XX(a).90 Could this approach be adopted for the US tariff case to determine whether its ‘core’ objective is the protection of national security or the protection of domestic industry for a commercial purpose? Here, again, the US denial of the latter objective does not render this approach readily applicable. As in the Biotech case, the EU does not deny the multiplicity of objectives, as demonstrated by the exception that it adopted to protect certain indigenous people. Thus, there was no controversy over the multiplicity of objectives in the Seal case, and the Appellate Body was able to weigh one objective against another, identifying the core objective. However, in the US tariffs, the controversy does exist, and one cannot readily presume the priori existence of multiple objectives. Also, unlike the Seal case in which the core objective was demonstrated by the ban and the minor objective was by the exception, the US tariffs are not discernible into such segments, each of which may reflect core or minor objectives. Another finding of the case offers a guide that could be applied where the multiplicity of objectives may not be certain. It indicates the necessity to conduct an independent analysis of the specific terms and requirements of all relevant provisions when measures (may) pursue multiple objectives. In the Seal case, the Appellate Body found that the panel errored by failing to conduct an independent analysis to determine the existence of ‘arbitrary or unjustifiable discrimination’ under the chapeau of GATT Article XX91 and by applying the same legal test as it applied to Article 2.1 of the Agreement on Technical Barriers to Trade (TBT Agreement)92 that requires according a Member ‘treatment no less favourable than that accorded to like products of national origin and to like products originating in any other country.’93 The Appellate Body ruling did not preclude the same analysis and test from being adopted for the interpretation of multiple provisions in the case that involve a measure with multiple objectives, but it nevertheless required explanation as to ‘why and how’ its analysis under one provision was ‘relevant and applicable’ to the analysis under another.94 This finding provides a guide for the interpretation of relevant provisions where a measure may involve the multiplicity of objectives; i.e. each of the multiple objectives must be separately justified under the relevant provision by conducting an independent analysis and legal test appropriate for each regime. Applying this rationale to the US tariffs, which the USA claims as an Article XXI action but appears to serve a commercial purpose, the strength of the case under Article XXI would not be determinative of whether the US tariffs are safeguards. In other words, the absence of justification for the national security grounds under Article XXI would not automatically be translated into the strength of the commercial grounds that justify the application of the SA and the retaliatory measures and vice versa. Thus, a separate and independent analysis must be performed to assess whether the US tariffs are indeed safeguards subject to the rules of the SA, irrespective of their justification under Article XXI. To conduct the required independent analysis, it is necessary to perform a close examination of the investigation reports, as it reveals the design and purpose of the measure. The steel and aluminum reports examine the effect of imports of steel and aluminum on the national security by analyzing the following factors: the importance of steel and aluminum on national security, the adverse impact of imports on the welfare of the domestic steel and aluminum industries, and the adverse impact of the displacement of domestic steel industries and of global excess capacity on the welfare of domestic economy.95 The impact analysis set forth in the reports demonstrates certain overlaps with the injury assessment required by the SA. For example, the steel report analyzes relevant factors, including increases in imports, prices, employment, financial distress, and capital expenditure,96 and it is analogous to the assessment requirement in a relevant SA provision. Article 4.2 of the SA provides the following: In the investigation to determine whether increased imports have caused or are threatening to cause serious injury to a domestic industry under the terms of this Agreement, the competent authorities shall evaluate all relevant factors of an objective and quantifiable nature having a bearing on the situation of that industry, in particular, the rate and amount of the increase in imports of the product concerned in absolute and relative terms, the share of the domestic market taken by increased imports, changes in the level of sales, production, productivity, capacity utilization, profits and losses, and employment.97 (emphasis added) The injury factors analyzed by the investigation report overlap with some of the injury factors subject to analysis under Article 4.2. The steel report also notes negative developments for the domestic industry in the cited factors as follows: Total US imports rose from 25.9 million metric tons in 2011, peaking at 40.2 million metric tons in 2014 at the height of the shale hydrocarbon drilling boom. For 2017 (first 10 months) imports are increasing at a double-digit rate over 2016, pushing finished steel imports consistently over 30 percent of US consumption.98 Global excess steel production weakens the pricing power of US steel producers.99 US steel industry employment has declined 35 percent (216,400 in 1998 to 139,800 in January 2016–December 2016), including 14,100 lost jobs between 2015 and 2016.100 Rising levels of imports of steel continue to weaken the US steel industry’s financial health. […] The US industry, as a whole, has operated on average with negative net income from 2009–16.101 Total capital spending dropped to $3.87 billion in 2014 and slid further to $3.11 billion in 2015—32 percent below 2010 levels of $5.66 billion. The decline in capital expenditures reflected similar drops in net sales, which plummeted from $129.6 billion in 2014 to $102 billion in 2015.102 The aluminum report also discusses relevant factors in a similar fashion and increases in imports in conjunction with negative developments in other factors such as production capacity, domestic production, employment, financial status, capital expenditure, and prices.103 It observes the following: Overall U.S. imports of the aluminum categories subject to this investigation combined […] were valued at $13.0 billion in 2016—a 15 percent increase over 2013 import levels. For the first ten months of 2017, imports are up 30 percent on a value basis compared to the same period in 2016.104 U.S. primary aluminum production and capacity was relatively stable at between 3.5 million and 4 million metric tons per year from 1970 to 2000. Since 2000, there has been a steep decline in U.S. production [less than 1 million metric tons since 2015].105 [I]n in 2010, employment in the Alumina Refining/Primary Aluminum sector totaled 21,600; employment in that sector declined by 75 percent in just six years.106 [I]n 2017, there are only two major players in remaining the domestic primary aluminum industry: Alcoa and Century Aluminum. Three other companies have declared bankruptcy in recent years and no longer have any operating aluminum smelters in the United States.107 Despite the overlaps between the steel and aluminum reports and the injury assessment required by the SA,108 these reports are arguably not the same type of report required by the SA for the following reasons. First, there is a difference in the overall focus; the steel and aluminum reports analyze the importance of steel and aluminum to US national security (national defense and critical infrastructure),109 which is outside the scope of an injury analysis required by the SA.110 The reports also examine the impact of imports on the welfare of the overall domestic economy, which is also beyond the scope of the assessment under the SA.111 The analytical focus of the steel and aluminum reports is the effect on national security, irrespective of how persuasive the reasoning and the analysis might be and whether it actually complies with the requirements under Article XXI. The scope is broader than one for the investigation report required under the SA. Secondly, the reports do not perform the type of injury analysis as required by the SA. As examined above, the Appellate Body in Indonesia—Iron or Steel Products concluded that the measure must be designed to prevent or remedy serious injury to the Member’s domestic industry caused or threatened by increased imports of the subject product to qualify as a safeguard.112 The reports do not demonstrate such design; there is no examination as to whether the alleged effect amounts to the serious injury of the domestic industries or a threat thereof as defined by the SA.113 None of the official documents, investigation reports, the Secretary’s recommendation,114 and the Proclamations, makes a single reference to the existence of injury or the necessity to remedy the injury sustained by the domestic industries, but they consistently advocate the necessity of protecting the allegedly weakened domestic industries for the protection of national security.115 One may argue that the analysis of the weakened state of the domestic industry is not substantively different from the injury analysis, but both the SA and the Appellate Body ruling require that the measure should be designed to address ‘serious injury’, which is distinguished from ‘injury’,116 and the investigation did not attempt to assess the conditions of the domestic industries according to this threshold. This indicates that the steel and aluminum tariffs are applied as a measure to address the alleged national security concern, not one that has been designed to remedy serious injury or its threat, irrespective of whether the US tariffs are ultimately justified under GATT Article XXI. III. RETALIATION OR LITIGATION? A CALL FOR REGULATORY REFORM The present dispute associated with the US measures and the subsequent retaliation illustrates the inherent dilemma that faces the exporting countries affected by import restraining measures such as the US steel and aluminum tariffs. Several Members adopted the retaliatory measures in response, but these measures, applied when there was an element of dispute about the characterization of the original measure, are inconsistent with the provisions of the Dispute Settlement Understanding (DSU) that require Members to refer disputes to the DSB for adjudication, not to adopt their own retaliatory measures unauthorized by the latter.117 Article 23.2 of the DSU provides in relevant part the following: 2. Members shall: (a) not make a determination to the effect that a violation has occurred, that benefits have been nullified or impaired or that the attainment of any objective of the covered agreements has been impeded, except through recourse to dispute settlement in accordance with the rules and procedures of this Understanding, and shall make any such determination consistent with the findings contained in the panel or Appellate Body report adopted by the DSB or an arbitration award rendered under this Understanding; […] (c) follow the procedures set forth in Article 22 to determine the level of suspension of concessions or other obligations and obtain DSB authorization in accordance with those procedures before suspending concessions or other obligations under the covered agreements in response to the failure of the Member concerned to implement the recommendations and rulings within that reasonable period of time. Thus, the retaliating countries breached the DSU provisions by adopting the retaliating measures without a panel or Appellate Body report adopted by the DSB, where there was an element of dispute, and without authorization of such measures by the DSB. This raises a question as to what, then, is left to the Members on the receiving end of the unilateral measures affecting their trade. The dispute settlement process under the DSU may well take years during which time the exporting industries subject to the measures sustain injury, and even if the DSB ultimately renders a favorable decision, the remedy is only prospective and not retrospective, in that it only requires the offending Member to bring their measures in conformity with their obligations under WTO disciplines, and such remedy does not cure the harm that has already been sustained by the exporters.118 Thus, arguably, the dispute settlement process does not deter determined Members from adopting offending measures due to its inherent limitations. It is a systematic issue, and this is likely a reason for the complaining Members to characterize the US measures as safeguards and adopt retaliatory measures as pursuant to the SA. Immediate retaliation, rather than litigation that takes years, might be a more effective remedy against import restriction measures such as the US measures. However, retaliation has its own limits; for example, it may not remedy the injured exporting industry fully. It is theoretically possible to transfer the tariff revenue, which is collected after the adoption of retaliatory measures, to the injured industry; it nevertheless does not compensate the industries for the loss of the export market. The revenue cannot generate markets for the affected industries, and the loss associated with the reduced exports, such as lowered production and loss of employment, is not fully recoverable. Retaliatory measures will also adversely affect the interests of domestic consumers facing higher prices due to the increased tariffs, while the latter might be advantageous to domestic producers competing with imports. The combined effect of the import restriction measures and retaliation will raise prices and reduce trade volumes, likely causing a net loss to the economy.119 The adverse economic effect of retaliation, as well as the delays and limited remedy associated with litigation, calls for regulatory reform to address these issues. Since retaliation is not likely an answer for the reasons explained above, consideration should be given to alternative remedies, which include the improvement of the current dispute settlement process, by speeding up the process and reducing the current case backlog. This reform will require the expansion of resources available to the WTO, including increasing the number of full-time lawyers to assist the DSB. Consideration should also be given to the appointment of full-time panelists, introduction of intensive panel and Appellate Body sessions, and the expansion of the Appellate Body membership, to expedite the process. It is not certain though whether the Members would be willing to expand resources for this reform, while a good number of Members are already discouraged by the decades of delay in concluding the Doha Round and some are known to have limited trust in the WTO dispute settlement process.120 An additional possible reform may include the requirement of payment, such as the return of payment equivalent to the revenue generated by the increased tariffs, which is to be imposed on the breaching Member. The calculation of payment could also be complex when a quota is involved. As with retaliation, the payment may also not be an effective remedy for the affected exporting industry, even if the collected payment is in fact transferred to the affected industry, because it may not fully compensate the exporting industry for the loss of export markets and employment. The payment requirement, if implemented, will nevertheless have an effect of discouraging Members from adopting rule-breaching measures. Consideration may also be given to a form of injunctive relief, which requires the Member applying the disputed measure to suspend its application pending the DSB decision, under certain conditions defining a threshold for such suspension. The threshold may include a certain number of complainants and the size of trade to be affected by the measure, although this form of relief may also meet resistance by Members that are determined to apply the measures in question, regardless of the level of concerns or resistance by the other trading Members, as exampled by the recent US steel and aluminum tariff case. IV. CONCLUSIONS Scholars have been debating as to whether the US steel and aluminum tariffs should be characterized as safeguards subject to the rules of the SA.121 While several complaining Members viewed the US tariffs, which the USA justified for its national security concerns, as safeguards and also justified their own retaliatory measures under the provisions of the SA, the recent Appellate Body decision found that suspension/withdrawal/modification of a concession is not a sufficient condition for the determination of a safeguard.122 According to the Appellate Bod ruling, the measure must also be designed to remedy serious injury or its threat to a domestic industry, determination of which is to be made after considering all relevant factors, including the manner in which the measure is characterized under the domestic law of the Member concerned and the domestic procedures that led to the adoption of the measure.123 The preceding analysis has applied this guideline to the present case and discussed why the US measures could not be considered to be safeguards under the SA.124 If the US tariffs are not safeguards, as argued by this article, then the SA provisions do not provide justification for the retaliatory measures, and these measures are in breach of the WTO rules. A solution could be found in the improvement of the dispute settlement system, rather than retaliation. This article suggests proposals to expedite the dispute settlement process and develop other remedies, such as the requirement of payment and injunctive relief, which would be effective and less counterproductive than retaliation.125 However, the WTO system as a whole is undergoing a difficult time, as demonstrated by the stagnant conclusion of the Doha Rounds, and it is not certain whether Members would be willing to expand the resources and make a political commitment to undertake the suggested reform. The author is grateful to Professors Petros Mavroidis, Joost Pauwelyn, and Simon Lester for insightful comments and Ms. Annelie Ellen Stallings for her research and editorial assistance. Footnotes 1 Proclamation 9705 of 8 March 2018 Adjusting Imports of Steel Into the United States and Proclamation 9704 of 8 March 2018 Adjusting Imports of Aluminum Into the United States, reported in Federal Register, vol. 83, no. 51 (15 March 2018), docs. 2018-11625 and 2018-11619, respectively. 2 Congressional Research Service, Section 232 Investigations: Overview and Issues for Congress (updated 21 November 2018) 7. 3 As amended 19 USC 1862. 4 Supra note 1. 5 Ibid. 6 Ibid. 7 World Trade Organization, ‘Disputes by Member’, https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm (visited 13 December 2018); United States—Certain Measures on Steel and Aluminum Products, DS550, DS563, DS548, DS547, DS551, DS552, DS554, DS556, and DS564. 8 WTO docs. G/SG/N/12/EU/1 (18 May 2018); G/SG/N/12/RUS/2 (22 May 2018); G/SG/N/12/CHN/1 (3 April 2018); G/SG/N/12/TUR/6 (22 May 2018); G/SG/N/12/IND/1/Rev.1 (14 June 2018); Customs Notice 18-08: Surtaxes Imposed on Certain Products Originating in the United States (29 June 2018; revised 11 July 2018) (Canada); Decree Modifying the Tariff Schedule of the Law of General Import and Export Taxes, the Decree Establishing the General Import Tax Rate Applicable During 2003 for Goods Originating in North America, and the Decree Establishing Various Sectoral Promotion Programs (enacted 5 June 2018; effective 5 June 2018) (Mexico). 9 United States—Certain Measures on US Steel and Aluminum Products, supra note 7. 10 WTO docs. G/SG/N/12/EU/1 (18 May 2018); G/SG/N/12/RUS/2 (22 May 2018); G/SG/N/12/CHN/1 (3 April 2018); G/SG/N/12/TUR/6 (22 May 2018); G/SG/N/12/IND/1/Rev.1 (14 June 2018). 11 SA, Article 8.2. 12 WTO docs (2018). WT/DS557/1, WT/DS558/1, WT/DS559/1, WT/DS560/1, WT/DS566/1, WT/DS561/1. 13 Ibid. 14 Yong-Shik Lee, ‘Safeguards’, in Krista Nadakavukaren Schefer and Thomas Cottier (eds), Encyclopedia of International Economic Law (Cheltenham: Edward Elgar Publishing, 2017) 263–266, at 263; Yong-Shik Lee, Safeguard Measures in World Trade: The Legal Analysis, 3rd ed. (Cheltenham: Edward Elgar Publishing, 2014) 4. 15 SA, Article 2.1. 16 GATT 1994, Article II. 17 GATT Article XXVIII provides for the modification of schedules. GATT 1994, Article XXVIII. 18 Report of the Appellate Body, United States—Definitive Safeguard Measures on Imports of Steel Wire Rod and Circular Welded Carbon Quality Line Pipe (United States—Line Pipe), WT/202/AB/R, dated 15 February 2002, para 80. 19 GATT 1994, Article II. 20 There were eight multilateral trade negotiations (‘rounds’) during the GATT era (1947–94). The first round (the ‘Doha Round’) in the WTO regime began in November 2001. During the previous GATT rounds, tariffs were reduced by an average of 35 percent at each round. As a result, the tariff rates of non-primary products of industrial countries fell to a mere 3.9 percent after the Uruguay Round in 1994. John H. Jackson, The World Trading System, 2nd ed. (Cambridge, MA: MIT Press, 1997) 74. 21 For the ‘safety valve theory’, see Kenneth W. Dam, The GATT: Law and International Economic Organization (Chicago: University of Chicago Press, 1970) 106. 22 Article 7.4 of the SA provides, ‘In order to facilitate adjustment in a situation where the expected duration of a safeguard measure as notified under the provisions of paragraph 1 of Article 12 is over one year, the Member applying the measure shall progressively liberalize it at regular intervals during the period of application.’ SA, Article 7.4. 23 For the (controversial) economic rationale of safeguards, see Lee (2014), supra note 14, at 10–17. 24 Ibid. 25 Ibid, at 18–21. 26 Ibid, at 296. 27 Ibid, at 41–42. 28 Michel M. Kostecki, ‘Marketing Strategies and Voluntary Export Restraints’ 25 Journal of World Trade (1991) 87–99. 29 Lee (2014), supra note 14, at 42. 30 Ibid. 31 Lee (2014), supra note 14, at 43. 32 Ibid, at 42–43. 33 Article 11.1 of the SA stipulates that ‘a Member shall not seek, take or maintain any voluntary export restraints, orderly marketing arrangements or any other similar measures on the export or the import side. These include actions taken by a single Member as well as actions under agreements, arrangements and understandings entered into by two or more Members.’ (footnotes omitted) SA, Article 11.1(b). 34 SA, Article 8.3. 35 Proclamation 9740 of 30 April 2018, reported in Federal Register, vol. 83, no. 88 (7 May 2018), doc. 2018-20683; Proclamation 9759 of 31 May 2018 and Proclamation 9759 of 31 May 2018, reported in Federal Register, vol. 83, no. 108 (5 June 2018), docs. 2018-25849 and 2018-25857, respectively. 36 Proclamation 9740, id. 37 Supra note 35. 38 Article 11.1(c) provides, ‘This Agreement does not apply to measures sought, taken or maintained by a Member pursuant to provisions of GATT 1994 other than Article XIX, and Multilateral Trade Agreements in Annex 1A other than this Agreement, or pursuant to protocols and agreements or arrangements concluded within the framework of GATT 1994.’ SA, Article 11.1(c). 39 GATT 1994, Article XXI(b). 40 WTO, ‘Disputes by Member’, https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm (visited 21 January 2019); United States—Certain Measures on US Steel and Aluminum Products (United States—Steel and Aluminum Products), DS550, DS563, DS548, DS547, DS551, DS552, DS554, DS556, and DS564. 41 For the imposition of anti-dumping measures, see WTO, ‘Anti-Dumping Sectoral Distribution of Measures: By Reporting Member 01/01/1995–31/12/2017’, https://www.wto.org/english/tratop_e/adp_e/AD_Sectoral_MeasuresByRepMem.pdf (visited 21 January 2019). 42 Supra note 40. 43 GATT 1994, Article XXI. 44 GATT 1994, Article XXI(b). 45 GATT, Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment, EPCT/A/PV/33 (24 July 1947) 20–21. See also EPCT/A/SR/33 (24 July 1947) 3, as cited in WTO, Analytical Index: Guide to GATT Law and Practice (‘GATT Analytical Index’), 6th ed. (Geneva: WTO, 1995), 600, fn. 1; Michael Hahn also stated that Article XXI is not an unrestricted or open-ended provision allowing nations to escape their GATT obligations. Hahn, ‘Vital Interests and the Law of GATT: An Analysis of GATT's Security Exception' 12 Michigan Journal of International Law (1991) 558-620, at 579. 46 US Department of Commerce, The Effect of Imports of Steel on the National Security: An Investigation Conducted Under Section 232 of the Trade Expansion Act of 1962, as Amended (11 January 2018) (‘Steel Report’) and The Effect of Imports of Aluminum on the National Security: An Investigation Conducted Under Section 232 of the Trade Expansion Act of 1962, as Amended (17 January 2018) (‘Aluminum Report’). 47 Steel Report, ibid, at 23–24 48 Aluminum Report, supra note 46, at 24. 49 Supra note 45. 50 See Communication From the United States, WT/DS548/13 (6 July 2018). 51 See supra note 8. 52 Ibid. 53 ‘Rust Belt’, known to be the political base for President Trump, refers to the large area from the Great Lakes to the upper Midwest States, including western New York, Pennsylvania, West Virginia, Ohio, Indiana, parts of Michigan, northern Illinois, eastern Iowa, and southeastern Wisconsin. The term signifies the economic decline, deindustrialization, population loss, and urban decay caused by the decline of its once-prospered manufacturing sector. This region has lost more than 1.2 million manufacturing jobs since 1990 and 2.2 million since 1970. Yoaf Hagler, ‘Introduction: Identifying Underperforming Regions’, in Petra Todorovich and Yoav Hagler (eds) America 2050: New Strategies for Regional Economic Development (Cambridge, MA: Lincoln Institute of Land Policy and Regional Plan Association, 2009) 9. 54 Supra note 12. 55 Ibid. 56 Ibid. 57 See supra note 8. 58 WTO doc. G/SG/N/12/EU/1 (18 May 2018). 59 Ibid. 60 Communication From the United States, supra note 50. 61 Ibid. The United States stated that ‘issues of national security are political matters not susceptible to review or capable of resolution by WTO dispute settlement.’ Id. 62 SA, Article 8.3. 63 Ibid, Article 8.2. 64 See supra note 10. They made notifications of their retaliatory measures under Article 12.5 of the SA. 65 United States—Certain Measures on Steel and Aluminum Products—Request for Consultations by the European Union, WT/DS548/1 (6 June 2018). In addition, the EU also claimed that the USA had breached GATT Articles XIX:1(a) and XIX:2 and SA Articles 2.1, 2.2, 3.1, 4.1, 4.1, 5.1, 7, 9, 11.1(a), 12.1, 12.2, and 12.3. Id. 66 WTO Committee on Safeguards, Minutes of the Regular Meeting Held on 23 April 2018, G/SG/M/53 (25 July 2018)10–12. 67 Ibid, at 11. However, the reports do not include a specific reference to injury. 68 Communication From the United States, supra note 50. 69 Ibid. 70 Report of the Appellate Body, Indonesia—Iron or Steel Products, WT/DS496/AB/R, 15 August 2018, para 5.49. 71 Ibid. 72 Ibid, para 5.60. 73 See supra note 70. 74 Supra note 1. 75 Ibid. 76 Communication From the United States, supra note 50. 77 Ibid. 78 Supra note 1. 79 Ibid. 80 WTO Report of the Panel, European Communities—Measures Affecting the Approval and Marketing of Biotech Products (EU—Biotech Products), WT/DS291/R, WT/DS292/R, WT/DS293/R, 29 September 2006, at 617–623. 81 Ibid, at 356–360. 82 Ibid, para 7.164. 83 Ibid, para 7.165. 84 Ibid, para 7.164. 85 Communication From the United States, supra note 50. 86 Report of the Panel, Korea—Definitive Safeguard Measure on the Imports of Certain Dairy Products, WT/DS98/R, 21 June 1999, para 7.30 and Report of the Panel, Argentina—Safeguard Measure on the Imports of Footwear (Argentina—Footwear), WT/DS121/R, 25 June 1999, para 8.124. The Appellate Body affirmed this approach, and the subsequent panels also followed it. Report of the Appellate Body, United States—Argentina, WT/DS121/AB/R, 14 December 1999, paras 116–122; Report of the Panel, United States—Definitive Safeguard Measures on Imports of Wheat Gluten From the European Communities, WT/DS166/R, 25 June 1999, para 8.5; Report of the Panel, United States—Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat From New Zealand and Australia, WT/DS177/R, WT/DS178/R, 21 December 2000, para 7.3; and Report of the Panel, Dominican Republic—Safeguard Measures on Imports of Polypropylene Bags and Tubular Fabric, WT/DS415, WT/DS418/R, 31 January 2012, para 7.7. 87 Report of the Panel, EU—Biotech Products, supra note 80, para 7.165. 88 WTO Report of the Appellate Body, European Communities—Measures Prohibiting the Importation and Marketing of Seal Products (EC—Seal Products), WT/DS400/AB/R, WT/DS401/AB/R, 22 May 2014. 89 Ibid. See also Joost H.B. Pauwelyn et al., International Trade Law, 3rd ed. (New York: Wolters Kluwer, 2016) 440–443. 90 Ibid. For a further discussion of the multiplicity of competing objectives in this case, see Gracia Marin Duran, ‘Measures With Multiple Competing Purposes After EC—Seal Products: Avoiding a Conflict Between GATT Article XX-Chapeau and Article 2.1 TBT Agreement’, 19 Journal of International Economic Law (2016) 467–495. 91 GATT 1994, Article XX. 92 EC—Seal Products, supra note 88, para 5.313. 93 TBT Agreement, Article 2.1. 94 EC—Seal Products, supra note 88, para 5.310. 95 Ibid. 96 Steel Report, supra note 46, at 27–40. 97 GATT 1994, Article 4.2(b). 98 Steel Report, supra note 46, at 27. 99 Ibid, at 33. 100 Ibid, at 35. 101 Ibid, at 37. 102 Ibid, at 40. 103 The Aluminum Report, supra note 46, at 40–103. 104 Ibid, at 63. 105 Ibid, at 41. 106 Ibid, at 89. 107 Ibid, at 91. 108 Thus, China, at the April 2018 meeting of the Committee on Safeguards, characterized the US measures as safeguards because they were based on the investigations with such similarities. Supra note 67. 109 Steel Report, supra note 46, at 23–27; Aluminum Report, supra note 46, at 23–40. 110 SA, Article 4.2(b). 111 Steel Report, supra note 46, at 41–51. 112 Supra note 70. 113 Article 4.1 of the SA defines ‘serious injury’ as ‘a significant overall impairment in the position of a domestic industry’ and ‘threat of serious injury’ as ‘serious injury that is clearly imminent.’ The Article also provides that [a] determination of the existence of a threat of serious injury shall be based on facts and not merely on allegation, conjecture or remote possibility. SA, Article 4.1(a) and (b). 114 US Department of Commerce, Secretary Ross Releases Steel and Aluminum 232 Reports in Coordination With White House, Press Release, 16 February 2018. 115 Supra note 46. 116 Supra note 113 for the determination of serious injury. See also Lee (2014), supra note 14, at 99–104. 117 For a further discussion of the DSU, see Mitsuo Matsushita et al., The World Trade Organization (New York: Oxford University Press, 2003) 17–44; and Yong-Shik Lee, Reclaiming Development in the World Trading System, 2nd ed. (Cambridge: Cambridge University Press, 2016) 244–269. 118 Ibid. 119 According to the study of welfare economics, the welfare loss to consumers caused by trade restraints is greater than the welfare gain by domestic producers, resulting in a net loss to the society. Dominick Salvatore, International Economics, 11th ed. (Hoboken, NJ: John Wiley and Sons, Inc.) 221–228 and 257–260. 120 See Tom Miles, ‘Diplomats Search for Way to Save Trade System After U.S. Vetoes Judges’, Reuters World News, 27 November 2017, https://www.reuters.com/article/us-usa-trade-wto/diplomats-search-for-way-to-save-trade-system-after-u-s-vetoes-judges-idUSKBN1DR2PR (visited 2 January 2018). 121 For instance, see, ‘International Economic Law and Policy Blog’, http://worldtradelaw.typepad.com/ielpblog/2018/03/eu-can-retaliate-immediately-against-trumps-metal-tariffs.html (visited 2 January 2018). 122 See discussion supra Section II.C. 123 Ibid. 124 Ibid. 125 See discussion supra Section III. © The Author(s) 2019. Published by Oxford University Press. All rights reserved. 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TI - Are Retaliatory Trade Measures Justified under the WTO Agreement on Safeguards?
JF - Journal of International Economic Law
DO - 10.1093/jiel/jgz006
DA - 2019-09-20
UR - https://www.deepdyve.com/lp/oxford-university-press/are-retaliatory-trade-measures-justified-under-the-wto-agreement-on-N6Yl0608LL
SP - 439
VL - 22
IS - 3
DP - DeepDyve
ER -