UPDATE 1-Russia's WTO "national security" victory cuts both ways for Trump

Russia won a dispute about "national security" at the World Trade Organization on Friday, in a ruling over a Ukrainian transit dispute that may also affect global automobile tariffs that could be imposed by U.S. President Donald Trump. The WTO panel ruling, the first ever on the right to a national security exemption from the global trade rules, awarded Russia a legal victory because it had invoked national security, also the basis for Trump's tariffs on steel, aluminium and - potentially - autos.

The panel also confirmed the WTO's right to review national security claims, denting U.S. claims that national security was not subject to review, and said any such claim should be "objectively" true, relating to weapons, war, fissionable materials or an "emergency in international relations". "An emergency in international relations would, therefore, appear to refer generally to a situation of armed conflict, or of latent armed conflict, or of heightened tension or crisis, or of general instability engulfing or surrounding a state," it said.

The ruling, the first ever on national security, can be appealed. Invoking national security was taboo at the WTO for decades after it was founded in 1995. Diplomats referred to it as "Pandora's box" which could never be closed once it was opened, and would undermine the discipline of the WTO's widely accepted rules. But in the past three years, Russia has cited it in the dispute with Ukraine, Trump has used it to justify tariffs on steel, aluminium and -- potentially -- autos, and Bahrain, the United Arab Emirates and Saudi Arabia have cited it in a dispute with Qatar.

Ukraine went to the WTO in 2016, complaining of a huge reduction in trade with Asia and the Caucasus region after Russian President Vladimir Putin banned road and rail transport from Ukraine unless the route also went through Belarus. Russia's Economy Ministry said that Friday's ruling had recognised Ukraine's arguments to be unfounded, and said the issue was of systemic importance for the WTO. 

(With inputs from agencies.)