The World Trade Organization on Friday issued its first-ever ruling in a dispute where national security was invoked to justify otherwise illegal trade restrictions, setting a precedent that could have implications for Washington.
The global trade body said that Russia had the right to invoke national security concerns as justification for imposing restrictions on road and rail transit of Ukrainian goods.
Kiev had brought the case against Moscow in September 2016, complaining that the Russian restrictions, imposed following fighting that broke out in 2014 after a popular uprising ousted the pro-Kremlin president and Russia annexed Crimea, violated a range of international trade agreements.
In Friday''s ruling, a panel of experts set up by WTO''s Dispute Settlement Body acknowledged that if Russia had imposed the restrictions during normal times Ukraine would have had a case.
But it found that in light of the clear tensions between the two countries, Russia had the right to invoke national security concerns, meaning that Ukraine''s objections were moot.
"As of 2014, there has existed a situation in Russia''s relations with Ukraine that constitutes an emergency in international relations," and "each of the measures at issue was taken in time of this emergency in international relations," the panel concluded. Some 13,000 people have been killed in the fighting in eastern Ukraine since 2014.
Friday''s ruling is significant because it marks the first time the WTO''s Dispute Settlement Body has arbitrated a case that involved its national security clause - known as Article 21 - which was first enshrined after World War II in the General Agreement on Tariffs and Trade (GATT). GATT was a predecessor to the WTO, which was established in 1995.
The fact that the WTO panel determined in Friday''s ruling that the agency has the "jurisdiction" to rule in cases where national security concerns are invoked could also have implications for a slew of cases brought against the United States. Marking a departure from a decades-long US-led drive for free trade, President Trump has justified slapping steep tariffs on some imports from a long line of countries with claims they threaten US national security.
He has based his move on a rarely used procedure in US trade legislation: article 232 which allows him to limit the import of certain products to protect national security.
The US maintains that the WTO does not have the authority to review countries'' claims that their national security is threatened. Washington also warned late last year that if the organisation did review the invocation of Article 21, the WTO would undermine the legitimacy of its dispute settlement system, a Geneva trade official said at the time.
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