1. Legal Review on TPEA Section 232
20 September 2019 (Fri)
Hongik University
Professor. JUNHA KANG
No citation without author’s permission

2. Contents Spread of protectionism Main elements of the TPEA section 232
Reactions of major economies
Review on WTO consistency
National security exceptions
Assessment and implications

3. Protective measures by Trump Administration
Safeguards on Large Residential Washers and Solar Panels
Section 232 Investigation on steel and aluminum products
AFA(Adverse Facts Available)/PMS(Particular Market Situation)

4. Main Findings under the investigation of Section 232
Steel is important to US National Security.
- Steel is needed for National Defense Requirement
- Steel is Required for U.S. Critical Infrastructure
- Domestic steel production is essential for National Security
Applications
- Steel Consumed in Critical Industries

5. Main Findings under the investigation of Section 232
Imports in Such Quantities as are Presently Found Adversely Impact the Economic Welfare of the U.S. Steel Industry
- Imports of Steel Products Continue to Increase
- Steel Mill Closures
- Declining Employment
- More Trade Actions – AD and Countervailing Duties

6. Main Findings under the investigation of Section 232
Displacement of Domestic Steel by Excessive Quantities of Imports has the Serious Effect of Weakening US Internal Economy
- Domestic Steel Production Capacity is Stagnant and
Concentrated
- Production is Well Below Demand
- Utilization Rates are Well Below Economically Viable Levels
- Declining Steel Production Facilities Limits Capacity Available for
a National Emergency

7. Main Findings under the investigation of Section 232
Global Excess Steel Capacity is a Circumstance that Contributes to the Weakening of the Domestic Economy
- Free markets globally are adversely affected by substantial
chronic global excess steel production led by China
- Increasing global excess steel capacity will further weaken
the internal economy as U.S. steel producers will face
increasing import competition

8. Recommendations and Measures
Tariff Measures
- 25% on Steel Products
- 10% on Aluminum Products
Quotas for certain countries including Korea

9. Consistency with the SG Rules
Claims by China, India, EU, Canada, Mexico, Russia, etc.
The US measures  safeguards
Inconsistent with the SG agreement
Serious injury / causation
Irrespective of its source
Most suitable measures
Duration not exceeding four yrs
Procedural Issues (Notification of relevant information / opportunity for consultation)

10. Consistency with the GATT rules
MFN (Art.I)
Tariff Concessions (Art.II 1(a)(b))
Transparencty (Art.X)
Emergency Action on Imports of Particular Products (Art.XIX)

11. US Position The measure at hand is not a SG
The measure may be justified under the security exceptions of GATT XXI
Self-judging Clause

12. Security Exceptions (1)
Article XXI (Security Exceptions)
Nothing in this Agreement shall be construed
(a)  to require any contracting party to furnish any information the disclosure of which it considers contrary to its essential security interests; or  

13. Security Exceptions (2)
(b)  to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests  
(i)   relating to fissionable materials or the materials from which they are derived;
(ii)  relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment;
(iii)   taken in time of war or other emergency in international relations;

14. Security Exceptions (3)
(c)  to prevent any contracting party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.

15. Looking Ahead
Current WTO case: Indonesia-Safeguard on certain Iron or Steel Products
Controversy over National Security Exceptions
Bottleneck in WTO Dispute Settlement Process

16. Thank You!