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The First WTO's Ruling on National Security Exception: Balancing Interests or Opening Pandora's Box?

Published online by Cambridge University Press:  14 February 2020

Daria Boklan  and
Amrita Bahri
Daria Boklan
Affiliation:
Faculty of Law, National Research University Higher School of Economics, Moscow, Russia
Amrita Bahri*
Affiliation:
Instituto Tecnológico Autónomo de México (ITAM), Mexico City, Mexico
*
*Corresponding author. Email: amrita.bahri@itam.mx
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Abstract

For a multilateral system to be sustainable, it is important to have several escape clauses which can allow countries to protect their national security concerns. However, when these escape windows are too wide or ambiguous, defining their ambit and scope becomes challenging yet crucial to ensure that they are not open to misuse. The recent Panel Ruling in Russia – Measures Concerning Traffic in Transit is the very first attempt by the WTO to clarify the scope and ambit of National Security Exception. In this paper, we argue that the Panel has employed a combination of an objective and a subjective approach to interpret this exception. This hybrid approach to interpret GATT Article XXI (b) provides a systemic balance between the sovereign rights of the members to invoke the security exception and their right to free and open trade. But has this Ruling opened Pandora's box? In this paper, we address this issue by providing an in-depth analysis of the Panel's decision.

Keywords

World Trade OrganizationNational Security ExceptionRussia – Traffic in TransitObjective InterpretationSubjective InterpretationMultilateral Trading System
Type
Snipings
Information
World Trade Review , Volume 19 , Issue 1 , January 2020 , pp. 123 - 136
Copyright
Copyright © Daria Boklan and Amrita Bahri 2020

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Footnotes

The rubric ‘Snipings’ is intended for contributions which, while rigorous, offer early analyses of issues of immediate policy relevance for the multilateral trading system. They would normally be shorter and possibly be less extensively documented than our standard articles with a view to stimulating current debates. They are subject to standard, albeit expedited, refereeing procedures. Further submissions under this heading are welcome.

Thanks to our research assistant, Guillermo Moad, for his help with citations and proof reading. All errors or omissions are authors’ own.

References

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12 Russia – Measures Concerning Traffic in Transit (Russia–Traffic in Transit), WT/DS512/R (14 September 2016). This Panel decision was not appealed and hence adopted as such.

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23 Panel Report, Russia–Traffic in Transit (5 April 2019), para. 7.59.

24 Vienna Convention on the Law of Treaties, 1155 UNTS 331, 8 I.L.M. 679.

25 China – Measures Related to the Exportation of Various Raw Materials (China–Raw Materials), WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R (30 January 2012).

26 Ibid., para. 275.

27 China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (China–Publications and Audiovisual Products), WT/DS363.

28 China–Raw Materials, para. 275.

29 Ibid., para. 307.

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31 Multiple scholarly works support this analogy such as: Hahn, M. J., ‘Vital Interests and the Law of GATT: An Analysis of GATT's Security Exception’, 12(3) Michigan Journal of International Law (1991) 558Google Scholar, at 584; Akande, D. and Williams, S., ‘International Adjudication on National Security Issues: What Role for the WTO?’, 43 Virginia Journal of International Law (2003) 402Google Scholar, at 365; Schloemann, L. and Ohlhoff, S., ‘‘Constitutionalization’ and Dispute Settlement in the WTO: National Security as an Issue of Competence’, 93 American Journal of International Law (1999) 444CrossRefGoogle Scholar, at 424; Piczak, C., ‘The Helms-Burton Act: US Foreign Policy Toward Cuba, The National Security Exception to the GATT and the Political Question Doctrine’, 61(1) University of Pittsburgh Law Review (1999) 326Google Scholar, at 287.

32 Panel Report, Russia–Traffic in Transit, para. 7.34.

33 Ibid., para. 7.28.

34 Ibid.

35 Ibid., para. 7.52 (United States' response to Panel question 1, at 18 and 22).

36 Summary Record of the Twenty-Second Meeting, US–Export Restrictions (Czechoslovakia), CP.3/SR.22 (Contracting Parties Third Session, 8 June 1949).

37 Trade Restrictions Affecting Argentina Applied for Non-economic Reasons, GATT L/5319/Rev.1 (1982).

38 ‘Minutes of the Meeting of the GATT Council’ [C/M/191 (1985)], at 44, https://docs.wto.org/gattdocs/q/GG/C/M191.PDF (accessed 17 July 2018).

39 Ibid., at 45.

40 Dispute Settlement Body, Minutes of Meeting (20th February 2018, WT/DSB/M/403), para.4.4, www.wto.org/english/news_e/news17_e/dsb_23oct17_e.htm (accessed 8 August 2019).

41 P. Lindsay, ‘The Ambiguity of GATT Article XXI: Subtle Success or Rampant Failure?’, 52 Duke Law Journal (2003) 1282.

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44 Ibid., para 27.

45 Certain Questions of Mutual Assistance in Criminal Matters (Djibouti v. France, ICJ Reports 2008), paras 135, 145.

46 DSU Agreement (note 21).

47 Villiger, M. E., Commentary on the 1969 Vienna Convention on the Law of Treaties (Brill-Nijhoff, 2009), 425CrossRefGoogle Scholar.

48 Ibid.

49 Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/RW (22 October 2001), para. 158.

50 Akande, D. and Williams, S., ‘International Adjudication on National Security Issues: What Role for the WTO?’, 43 Virginia Journal of International Law (2003) 365Google Scholar, at 392.

51 Panel Report, Russia–Traffic in Transit, para.7.21.

52 Ibid., para.7.27.

53 Ibid., para.7.28.

54 Ibid., para. 7.57.

55 Ibid., para. 7.8.1.

56 Ibid., paras. 7.57, 7.58, 7.66.

57 Ibid., para. 7.64.

58 Ibid., para. 7.82.

59 Ibid., para. 7.70.

60 Ibid., para. 7.72.

61 Ibid., para. 7.74.

62 Ibid., para. 7.75.

63 Ibid., para. 7.111.

64 Ibid., para. 7.79.

65 Ibid., para. 7.83.

66 Ibid., para. 7.101.

67 Ibid., para. 7.97.

68 Ibid., para. 7.104.

69 Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R (29 April 1996) 21; Panel Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/R, WT/DS10/R, WT/DS11/R (1 November 1996), as modified by the Appellate Body Report, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R.

70 Panel Report, Russia–Traffic in Transit, para. 7.105.

71 Ibid., para. 7.108.

72 Ibid., para. 7.122.

73 Schloemann, H. L. and Ohlhoff, S., ‘Constitutionalization and Dispute Settlement in the WTO: National Security as an Issue of Competence’, 93(2) American Journal of International Law (1993), 424Google Scholar.

74 Mona Pinchis-Paulsen, ‘Trade Multilateralism and US National Security: The Making of the GATT Security Exception’ (Draft paper), at 11, 76, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3353426 (accessed 9 September 2019).

75 Hahn, M. J., ‘Vital Interests and the Law of GATT: An Analysis of GATT's Security Exception, 12(3) Michigan Journal of International Law (1991), 589Google Scholar.

76 Ibid.

77 Ibid.

78 Panel Report, Russia–Traffic in Transit, para. 7.128.

79 Ibid., para. 7.98.

80 Oil Platforms (Zslamic Republic of Iran v. United States of America), Judgment, I.C.J. Reports 2003, p. 161, www.icj-cij.org/files/case-related/90/090-20031106-JUD-01-00-EN.pdf (accessed 8 August 2019).

81 Ibid., para. 73.

82 European Commission v. Republic of Finland (ECJ Case C-284/05); European Commission v. Sweden (ECJ Case C-372/05); European Commission v. Italian Republic (ECJ Case C-239/06)

83 CMS Gas Transmission Co. v. Republic of Argentina (ICSID ARB/01/8); Commission of the European Communities v. Kingdom of Spain (Case C-414/97, 16 September 1999); European Commission v. Italian Republic (Case C-239/06).

84 LG&E Energy Corp. v. Argentine Republic (ICSID ARB/02/1, 2006); CMS Gas Transmission Co. v. Republic of Argentina (ICSID ARB/01/8).

85 Ibid., para. 238.

86 M/V Saiga No. 2, International Tribunal for the Law of the Sea, 1 July 1999, www.worldcourts.com/itlos/eng/decisions/1999.07.01_Saint_Vincent_v_Guinea.pdf (accessed 8 August 2019).

87 Panel Report, Russia–Traffic in Transit, para. 7.130.

88 Ibid., para. 7.135.

89 Ibid., para. 7.108.

90 Ibid., para. 7.137.

91 Ibid., para. 7.138.

92 Ibid., para. 7.136.

93 Appellate Body Report, Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R (10 January 2001), paras. 166 and 163.

94 Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R (12 March 2001), para. 172.

95 Panel Report, Russia–Traffic in Transit, para. 7.43.

96 Ibid., para. 7.138.

97 Ibid., para. 7.103.

98 Ibid., para. 7.65.

99 Ibid., para. 7.103.

100 Ibid., para. 7.130.

101 Ibid., paras. 7.132–134.

102 Ibid., paras. 7.132–137,138.

103 These ongoing litigations include the following: United Arab Emirates – Measures Relating to Trade in Goods and Services, and Trade-Related Aspects of Intellectual Property Rights (DS526, 31 July 2017); Qatar – Certain Measures Concerning Goods from the United Arab Emirates (DS576, 28 January 2019); Saudi Arabia – Measures concerning the Protection of Intellectual Property Rights (DS567, 1 October 2018).