Global trade operates on trust— and using the loophole of “essential security” erodes the system
Away from the cameras at the Group of Seven summit in Charlevoix, Quebec, Canadian Prime Minister Justin Trudeau was groping for ways to explain to U.S. President Donald Trump that trading with Canada is not a threat to U.S. national security. According to a Canadian official who spoke with the Toronto Star, Trudeau brought up the air base at Bagotville where Air Force One had landed. Trudeau told Trump, “Why is Bagotville there? Bagotville is there to protect aluminum smelters that were building American warplanes in the Second World War.”
Trudeau’s message clearly didn’t stick. Trump continued his pattern of being friendlier with America’s enemies than with its friends. He called Trudeau weak and dishonest on his way from Canada to a convivial meeting with the brutal North Korean leader Kim Jong Un.
A possible explanation for Trump’s behaviour is that in his worldview, national security appears to encompass freedom of action. To him, a great nation is unencumbered. Trump seems to be energised by engaging with world-historical characters like Kim, Russian President Vladimir Putin, and Chinese President Xi Jinping. With them, he can paint in bold colours on a big canvas. He shows less enthusiasm for the quotidian work of maintaining alliances. The web of longstanding relationships with countries such as Canada, Mexico, Germany, France, and the United Kingdom hems him in.
This is a real problem, because no law forces sovereign nations to cooperate. They do it because they trust one another. By destroying trust, Trump could do lasting damage to the international order that supports shared prosperity.
There’s no better example of Trump’s dislike of encumbrances than the U.S. position in a trade case filed by Ukraine against Russia that’s wending its way through the World Trade Organization. Russia is invoking its “essential security” to argue that the WTO has no standing to intervene against it. Canada and the European Union, among others, are arguing that essential security should not be a carte blanche for Russia to act as it wishes against Ukraine.
Only one major nation has taken Russia’s side in this pivotal case, and it is—you guessed it—the U.S.
To exert pressure on Ukraine—which is battling a Moscow backed separatist movement—Russia is preventing it from shipping goods to Kazakhstan, Kyrgyzstan, and other nations directly across Russian territory, insisting that they first pass through Belarus. Ukraine says this and other restrictions cause delays, “effectively ban” some commerce, and violate WTO rules guaranteeing freedom of transit for goods.
Lawyers for Russia cite WTO rules that exempt a defendant nation for “any action which it considers necessary for the protection of its essential security interests.” The WTO’s charter lists three types of actions that qualify for the exemption. The one Russia rests its case on is any action “taken in time of war or other emergency in international relations.”
It’s ludicrous, of course, to argue that Russia’s essential security is threatened by the transit of mundane goods such as malt extract, wallpaper, and steam turbines from Ukraine to Kazakhstan. But Russia says the WTO, according to its own charter, has no right to second-guess it.
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