Russia Wins Landmark ‘National Security’ WTO Case over Ukraine

The World Trade Organization (WTO) on Friday ruled in favor of Russia in a “national security” case over a Ukrainian railway dispute, TASS news agency reported. According to analysts, the ruling may also lend support to global automobile tariffs that could be imposed by U.S. President Donald Trump.

The WTO panel ruling, the first ever on the right to a national security exemption from the global trade rules, can be appealed. The panel also confirmed the WTO’s right to review national security claims, denting U.S. claims that such matter were not subject to review by the global trade body.

“An emergency in international relations would, therefore, appear to refer generally to a situation of armed conflict, or of latent armed conflict, or of heightened tension or crisis, or of general instability engulfing or surrounding a state,” it said.

Russia imposed restrictions on the transit of Ukrainian goods to Kazakhstan and Kyrgyzstan in 2016. From January 1, 2016, the free trade zone between Ukraine and the EU came into force. In the circumstances, Russia, according to the Foreign Ministry, was forced to take measures that leveled the risks for its economy and suspended the free trade zone agreement in relation to Ukraine. In September 2016, Ukraine asked the WTO panel to consider its complaints against Russia.

Invoking national security was taboo at the WTO for decades after it was founded in 1995. Diplomats referred to it as “Pandora’s box” which could never be closed once it was opened, and would undermine the discipline of the WTO’s widely accepted rules.

But in the past three years, Russia has cited it in the dispute with Ukraine, Trump has used it to justify tariffs on steel, aluminum and — potentially — automobiles, and Bahrain, the United Arab Emirates and Saudi Arabia have cited it in a dispute with Qatar.