Just last Friday, mister World Trade Organizationwhich should be there to enforce the rules by which world trade operates, denounced as illegal the official rationale for some of the tariffs imposed by the US during the administration’s tenure. Trump. According to her arguments Washingtonthese tariffs are still considered necessary to protect their national security United States.

OUR World Trade Organization for its part (in the context of the United States – Certain Measures on Steel and Aluminum Products case regarding tariffs imposed by Washington on steel and aluminum products imported into the United States) to disagree with the American rationale, a fact that, however, caused a sharp reaction from the American side.

“United States categorically reject erroneous interpretation and conclusions in the reports of the Committee of the World Trade Organization […] The United States takes a clear and unequivocal position that national security issues cannot be taken into account in WTO dispute settlement and that the WTO does not have the power to challenge a member’s ability to respond to a wide range of threats to its security“Adam Hodge, U.S. Trade Representative (USTR) Catherine Tai, said in a statement released Dec. 9.

This is a very big problem,” writes the Nobel Prize-winning American economist. Paul Krugman in the New York Times, claiming that the government Biden it has become extremely tough on the trade front, so much so that it is subtly changing the basic foundations of the global economic order.

Since 1948 trade has been regulated General Agreement on Tariffs and Trade (GATT), which gradually, starting in 1994, was included in its rules. World Trade Organization (WTO). The GATT-WTO system does not set any specific tariff level. However, it prohibits countries from imposing new tariffs or other restrictions on international trade unless certain conditions are met. According to one of these conditions, defined in Article XXIa country may take action “as it deems necessary to protect its vital security interests”.

Paul Krugman argues that Trump clearly abused this privilege on the grounds that the US needed to impose tariffs on steel and aluminum as a hedge against the threat of… imports from Canada.

Since then, US tariffs on Canadian metals have been eliminated, as have most similar tariffs on European goods. However, obligations still apply to China.

But the Biden administration has also signaled something else that Krugman sees as important: that the World Trade Organization has no jurisdiction over this issue, and that, in other words, it is up to Washington to decide whether its trade actions are necessary for American policy. national security and that an international organization like the WTO has no right to question its judgment.

Paradoxically, Biden and his entourage are considered by the American right to be too “cosmopolitan” and too “soft” towards China, which in reality, however, in this case with tariffs and the conflict with the WTO, is not so.

Examining the reasons why the Biden administration has taken such a tough stance, Krugman argues that politicians in the US are now more aware of the threats that authoritarian regimes can pose, even more so in light of Russian politics. invasion of Ukraine and Russian blackmail of Europe in its sphere natural gas.

OUR China is not Russia but it is also “absolutism” that becomes more, not less, authoritarian over time, as Krugman mentions.

The Biden administration is trying to limit China’s potentially negative influence on the international stage by focusing on semiconductors who play such a central role in today’s world.

On the one hand, America is now subsidizing domestic semiconductor production to reduce dependence on China and other countries. At the same time, the US is introducing other new rules aimed at restricting China’s access to advanced semiconductor technology.

Beijing could appeal to the WTO, arguing that these US actions violate the rules of international trade. The United States, however, has already made it clear that the WTO has no jurisdiction over decisions that Washington approaches through the prism of protecting national security.

The Biden administration recently also brought Inflation Reduction Act (law to reduce inflation), which caused a reaction, but not in China, but in Europe. In the context of this law, the US government promotes “clean” forms of energy, “green” technologies and, more broadly, “made in americaby giving financial incentives to companies to move their production, or part of their production, to the US.

Paul Krugman talks about economic nationalism. Nobel Laureate American Economist Wonders How US Leadership Could Protect This economic nationalism if required to do so before the World Trade Organization. The answer, however, to some extent has already been given through the developments themselves. Washington could defend its positions, citing issues of national security. Through her lens National security but one could even see to deal with it climate crisis and environmental protection, on the basis of which, for example, “climate tariffs” could be justified.

But if United Stateswho essentially created the post-war trading system, are now willing to change some of its rules in order to achieve their own other strategic goals, is there a danger that we will see the rise of protectionism around the world? Yes, there is, Krugman replies, but argues that the Biden administration is doing the right thing. Because the General Agreement on Tariffs and Trade is important, but no more important than democracy and saving the planet.

Source: New York Times.