Biden team backs Trump-era ‘Made in China’ rule for Hong Kong exports at World Trade Organisation
- A US delegation said in a statement the international body had no right to mediate on the matter, because it ‘constitutes a threat to national security’
- Before 2016, WTO members generally steered clear of defending their trade actions on the basis of security interests – until Donald Trump came along
“The situation with respect to Hong Kong, China, constitutes a threat to the national security of the United States,” the US delegation said. “Issues of national security are not matters appropriate for adjudication in the WTO dispute-settlement system.”
Before 2016, WTO members generally steered clear of defending their trade actions on the basis of national security because doing so could encourage other nations to pursue protectionist policies that have little or nothing to do with hostile threats.
The Biden administration on Monday said the US has consistently argued that national-security disputes are not subject to WTO review because it would infringe on a member’s right to determine what is in its own security interests.
WTO grants Hong Kong request to escalate ‘Made in China’ labelling dispute
At the same meeting, the Biden administration said it would not agree to appoint new members to the WTO’s appellate body, a seven-member panel of experts who until 2019 had the final say on trade disputes involving billions of dollars worth of international commerce.
The Biden administration said it could not do so because the US “continues to have systemic concerns” with the functioning of the appellate body as have all previous administrations over the past 16 years.
Though the statement was not entirely unexpected, it confirms America’s bipartisan frustration with the functioning of the WTO appellate body and the new administration’s willingness to block new panellists until changes can be agreed.
Once Katherine Tai is confirmed as the US Trade Representative, her office “looks forward to working with” WTO Director-General Ngozi Okonjo-Iweala to tackle the problems with WTO dispute settlement, including the unresolved issues over appellate-body overreach, USTR spokesman Adam Hodge said in an email. “These are long-standing, bipartisan concerns that we hope our trading partners will work with us to address,” he said.
The Trump administration broke precedent when it refused to consider any nominees to fill vacancies on the panel until there weren’t enough to sign off on new rulings. As a result, the WTO’s dispute-settlement system has been critically damaged because WTO members are now free to veto any adverse dispute rulings by appealing them into a legal void created by the appellate body’s paralysis.