Unnecessary delays in the liquefied natural gas (LNG) and coal export permitting process may run afoul of U.S. international treaty obligations under World Trade Organization (WTO) agreements, according to a report by former WTO Appellate Body Chairman James Bacchus.
As a member of the WTO, Bacchus argues, the U.S. is bound to comply with the trade rules contained in the WTO agreements. A key provision of those agreements, Article XI:1 of the General Agreement on Tariffs and Trade 1994 (GATT) forbids export restrictions, including those made effective through licenses or other measures. The U.S. has always been a strong advocate of these rules and has been forceful in challenging export restrictions imposed by other countries, as highlighted recently when the U.S. successfully challenged China’s imposition of export duties, quotas and licenses on a variety of raw materials at the WTO. Consequently, China must now eliminate its export restrictions or be subject to economic sanctions.