On January 26, 2023, the United States filed a communication notifying the World Trade Organization’s (WTO) dispute settlement body of its intent to appeal the recent Panel Decision finding that Section 232 steel and aluminum tariffs, imposed under the Trade Expansion Act of 1962, do not qualify for national security exceptions and thus violate WTO rules. The complaint, brought by China in 2018, is the latest development in a series of accusations between the United States and China over dispute settlement and the fair use of national security exceptions permitted under Article XXI of the General Agreement on Tariffs and Trade (GATT).
Security exemptions have existed as part of the GATT since 1947, but procedural guidelines for the invocation of Article XXI first came into existence in the early 1980s, with full adjudication by a dispute settlement panel occurring for the first time in 2019 related to the Russia-Ukraine Transit Dispute. This landmark Panel Report established panel jurisdiction in determining whether members’ invocation of national security exceptions is covered by Article XXI of (GATT 1994). While the United States and China continue to disagree, the U.S. appeal to the WTO Appellate Body further complicates the matter. Since 2019, the Appellate Body has had too many vacancies to decide cases, placing the case in limbo.
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