After formally reopening US government consideration for the Keystone XL and Dakota pipelines, President Trump has expressed a determination that US–produced steel, materials and equipment will be used “to the maximum extent possible and to the extent permitted by law”. While the approach is consistent with the newly elected President’s campaign promises, it is bound to be challenged as a result of various ongoing international treaties.
A key reason is that it contradicts existing precedent found in international trade law. Policies set by the World Trade Organization (WTO), and its forerunner the General Agreement on Tariffs and Trade (GATT), are largely based upon a principle of non-discrimination between domestic producers and foreign suppliers. Member nations are required to treat imported goods and services no less favourably than domestically produced items once they have cleared customs. In requiring that the pipeline project source only US-made products, President Trump has challenged fundamental existing trade laws.
According to sources close to SteelOrbis, some individuals who are in the steel industry and close to the Trump administration are recommending revisiting aspects of the WTO in relation to US trade and are encouraging a re-evaluation of whether it is the best venue to address US trade disagreements.