Michael MacKay, Radio Lemberg, 31.07.2018
In a world where Trump calls Canada a threat to US national security and gets away with it, anything can happen. It’s no surprise, therefore, that the Trump regime is backing the Putin regime against Ukraine in the World Trade Organization (WTO). This is despite the fact that Russia is at war with Ukraine and the US formally opposes Russian aggression.
Back up a little bit. The United States imposed punitive tariffs on Canadian steel and aluminum on May 31. This is on top of punitive tariffs on Canadian softwood lumber imposed on 2 November 2017. Trump is sabotaging North American free trade for no discernible reason: the US enjoys a surplus in trade with Canada in general and an annual $2 billion surplus on steel and aluminum products in particular. Furthermore, the Trump tariffs are illegal under North American Free Trade Agreement (NAFTA) rules and under WTO rules. Canada retaliated with $16.6 billion in trade actions against the United States.
Because the Trump regime “doesn’t have a leg to stand on” with its illegal tariffs, it has decided to proclaim that Canada is a threat to US national security. This preposterous assertion is a feeble attempt to fend off the the legal challenges that have already started. Those challenges will take years to resolve, will be decided in Canada’s favour, at which point the US will be free to re-impose the same tariffs but under a different name – that has been the pattern with softwood lumber and it sets the precedent for steel and aluminum.
Nobody believes that Canada is a threat to US national security, but the Trump regime believes saying this gives them a legal “out” in the WTO. Article 21 of the General Agreement on Tariffs and Trade says: “Nothing in this Agreement shall be construed … to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests.” The US chooses to interpret this broadly: that saying the word “security” means that free trade can be destroyed at will.
Putin shares Trump’s contempt for the WTO and for the rules-based international order. Russia invaded Ukraine on 20 February 2014. As part of Putin’s total war against the Ukrainian people, his regime is waging economic warfare. The construction of the Nord Stream 2 natural gas pipeline is one aspect of Russia’s economic warfare against Ukraine. Another aspect is that Russia cut off road transit for Ukrainian exporters to reach key markets in Central Asia and in the Caucuses in January 2016. Russia is doing this to harm the Ukrainian economy, but because erecting trade barriers for economic warfare is illegal the Russians are saying the word “security” just like the Americans.
Ukraine is litigating Russia’s unjustified trade restrictions in the WTO. The Trump regime has decided to intervene on the side of Russia. Trump supports Putin’s ridiculous claim that Ukraine is a threat to the national security of the Russian Federation, because that lends support to Trump's own ridiculous charge against Canada.
It is ironic, to say the least, that the United States supports Ukraine with millions of dollars in aid, including substantial military aid to defend against Russia’s invasion. Now the US is supporting Russia’s efforts to harm Ukraine’s economy and weaken Ukraine’s ability to stop Putin on the battlefield.
The Putin regime and the Trump regime have figured out a way that they hope will destroy the WTO and further damage the rules-based international order. Both the US and Russia have formally declared their less militarily powerful neighbours, Canada and Ukraine respectively, to be threats to their national security. In the opinion of the Putin and Trump regimes, Article 21 of the GATT allows them to ignore any provisions of the WTO, and make otherwise illegal tariffs permissible.
Both Putin and Trump believe that international trade is a zero-sum game. Both men are imbeciles when it comes to comprehending economics. The fact that free and fair trade builds peace at the same time that it builds mutual prosperity is completely over their heads. No one really believes it, but for as long as the bullies Putin and Trump remain in power we are going to hear it: Canada is a ‘threat’ to the US and Ukraine is a ‘threat’ to Russia. Meanwhile, beyond the legal fiction, Canada is subjected to an unjustified trade war by the US and Ukraine is subjected to unprovoked total war by Russia to destroy its independence and freedom.