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Trade Retaliation in the Time of Trump

Published on August 3, 2018        Author: 
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A week ago the Editor-in-Chief of this Journal published a piece titled Black Lies, White Lies and Some Uncomfortable Truths in and of the International Trading System. Prof. Weiler’s argument can be summarised in two-steps: the steel tariffs imposed by the US arguing national security reasons were a gross violation of the WTO system — the black lie. The EU response establishing countermeasures did not follow the letter — or the spirit — of WTO Dispute Settlement System (Article 23). This may seem like a minor political issue, but, from a legal point of view, it undermines the system that the EU is declaring to uphold — the white lie.

Prof. Weiler — who I hold in utmost respect and appreciation as an academic and a person — does an excellent job in explaining the limitations of the WTO Dispute Settlements Understanding (DSU) to provide an adequate response to these cases. He cites the Internet Gambling saga and explains how the party violating the agreement has all the incentives to continue the violation until told by the final voice within the DSU (the Appellate Body) to cease in its conduct. In my view, this is an accurate description of a well-known problem within international trade law, since, pretty much, the creation of the WTO in 1994.

On paper, I would have nothing to add to his excellent editorial. In practice, there are a few elements that, I believe, could enrich the readers understanding of what is at stake here and how a system can organically evolve to address some of these shortcomings. Read the rest of this entry…

 
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