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WTO dispute over metal tariffs delayed with countries blocking action

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Requests for the World Trade Organization to hear disputes related to the US decision to impose tariffs on steel and aluminum imports were delayed on procedural grounds, putting off any WTO action until November.

[GENEVA] Requests for the World Trade Organization to hear disputes related to the US decision to impose tariffs on steel and aluminum imports were delayed on procedural grounds, putting off any WTO action until November.

In a volley of filings this month, WTO members including the European Union, China and the US escalated disputes over the new US metal duties - justified on national security grounds - and the European response to those levies. Each member can block an initial call for a dispute panel, but can't do so a second time, meaning the applications could be granted at the next meeting in November.

The move sets the stage for a showdown at the Geneva-based trade arbiter that some fear could either lead to a US exit or a flood of new protectionist measures invoking what has until now been a rarely used national security loophole in global trade rules.

The US has disagreed that invoking national security for its tariffs could undermine the international trading system, as many members have declared.

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Market voices on:

"This is erroneous, and completely backwards," Deputy US Trade Representative Dennis Shea wrote in a statement on Monday. "What threatens the international trading system is that China is attempting to use the WTO dispute settlement system to prevent any action by any member to address its unfair, trade-distorting policies."

The conflict puts the trade organization in a difficult position: If it finds in favor of the US it could encourage other members to enact protectionist measures under the guise of national security. If it rules against the US it could draw further ire from the largest economy in the world and a possible withdrawal by the Trump administration.

China, the EU, Canada, Mexico, Norway, Russia and Turkey requested that the WTO investigate the American tariffs, according to an Oct 19 WTO statement. And the US asked for reviews of the retaliatory actions of Canada, China, the EU and Mexico.

BLOOMBERG