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The Perils of Pandemic Exceptionalism

Published online by Cambridge University Press:  20 October 2020

Julian Arato
Professor of Law, Brooklyn Law School.
Kathleen Claussen
Associate Professor of Law, University of Miami School of Law.
J. Benton Heath
Assistant Professor of Law, Temple University Beasley School of Law.


In response to the pandemic, most states have enacted special measures to protect national economies and public health. Many of these measures would likely violate trade and investment disciplines unless they qualify for one of several exceptions. This Essay examines the structural implications of widespread anticipated defenses premised on the idea of “exceptionalism.” It argues that the pandemic reveals the structural weakness of the exceptions-oriented paradigm of justification in international economic law.

The International Legal Order and the Global Pandemic
Copyright © 2020 by The American Society of International Law

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1 G. John Ikenberry & Charles A. Kupchan, Global Distancing, Wash. Post (May 21, 2020).

2 Franco Ordoñez, Trump Pushes “America First” Approach to Boost Medical Stockpile, NPR (May 14, 2020).

3 See, e.g., World Health Organization (WHO), Responding to Community Spread of COVID-19 (Mar. 7, 2020) (recommending that states consider workplace closures and other distancing measures).

4 Chad P. Bown, Trump's Curbs on Exports of Medical Gear Put Americans and Others at Risk, Peterson Inst. Int'l Econ. (Apr. 9, 2020).

5 Global Airlines Slam Tit-for-Tat Quarantine Rules, Reuters (May 26, 2020).

6 Caroline Simson, COVID-19 Claims May Test Tribunals with Thorny Questions, Law360 (Apr. 30, 2020).

7 Id.

8 21st Century Tracking of Pandemic-Era Trade Policies in Food and Medical Products, Global Trade Alert (2020).

9 General Agreement on Tariffs and Trade, Arts. I, III, V, XI, Oct. 30, 1947, 55 UNTS 194 [hereinafter GATT 1947]; General Agreement on Trade in Services, Arts. II, XVI, XVII, Apr. 15, 1994, 1869 UNTS 183 [hereinafter GATS].

10 E.g., Appellate Body Report, EC—Measures Prohibiting the Importation and Marketing of Seal Products, paras 5.90, 5.117, WTO Doc. WT/DS400/AB/R (May 22, 2014); Panel Report, China—Measures Related to the Exportation of Various Raw Materials, para. 7.224, WTO Doc. WT/DS394/AB/R (July 5, 2011); see also Russia—Measures Concerning Traffic in Transit, para. 7.173, WTO Doc. WT/DS512/R (Apr. 5, 2019).

11 Howse, Robert, The World Trade Organization 20 Years On: Global Governance by Judiciary, 27 Eur. J. Int'l L. 9, 4748 (2016)CrossRefGoogle Scholar.

12 There is a robust literature on exceptions that we do not rehearse here. See, e.g., Exceptions in International Law (Lorand Bartels & Federica Paddeu eds., 2020); Voon, Tania, The Security Exception in WTO Law: Entering a New Era, 113 AJIL Unbound 45 (2019)CrossRefGoogle Scholar; Lorand Bartels, The Chapeau of the General Exceptions in the WTO GATT and GATS Agreements: A Reconstruction, 109 AJIL 95 (2015); Robert Howse, From Politics to Technocracy—and Back Again: The Fate of the Multilateral Trading Regime, 96 AJIL 94 (2002).

13 GATT 1947, supra note 9, Art. XX; see also GATS, supra note 9, Art. XIV bis. The WTO Agreement on Sanitary and Phytosanitary Measures (SPS) provides that any health measure that affects trade should be applied “only to the extent necessary to protect human, animal or plant life or health” and should be “based on scientific principles.” Agreement on Sanitary and Phytosanitary Measures, Art. 2.2, 1867 UNTS 493; see also Arts. 2.3, 5.6. The SPS Agreement does not follow a rule/exception paradigm. See Appellate Body Report, EC—Measures Concerning Meat and Meat Products, para. 104, WTO Docs. WT/DS26/AB/R, WT/DS48/AB/R (Jan. 16, 1998). But it follows much of the logic of the GATT Article XX model, and extends that logic to even nondiscriminatory measures.

14 GATT 1947, supra note 9, Art. XX.

15 Id. Art. XXI.

16 See generally Ratner, Steven R., Regulatory Takings in Institutional Context, 102 AJIL 475 (2008)CrossRefGoogle Scholar; Rudolf Dolzer & Christoph Schreuer, Principles of International Investment Law (2d ed. 2012).

17 See Nicholas DiMascio & Joost Pauwelyn, Nondiscrimination in Trade and Investment Treaties: Worlds Apart or Two Sides of the Same Coin?, 102 AJIL 48 (2008).

18 See, e.g., Crawford, James, Treaty and Contract in Investment Arbitration, 24 Arb. Int'l 351 (2008)Google Scholar.

19 See Gus van Harten, International Investment Treaty Arbitration and Public Law 89 (2007).

20 See, e.g., Julian Arato, The Private Law Critique of International Investment Law, 113 AJIL 1 (2019); Stratos Pahis, BITs and Bonds: The International Law and Economics of Sovereign Debt, 115 AJIL (forthcoming 2021); Michael Waibel, Opening Pandora's Box: Sovereign Bonds in International Arbitration, 101 AJIL 711 (2007).

21 Vandevelde, Kenneth J., Rebalancing Through Exceptions, 17 Lewis & Clark L. Rev. 449 (2013)Google Scholar; Cho, Sungjoon & Kurtz, Jürgen, Convergence and Divergence in International Economic Law and Politics, 29 Eur. J. Int'l L. 169 (2018)CrossRefGoogle Scholar.

22 See, e.g., UN Conference on Trade & Development, The Protection of National Security in IIAs, UN Doc. UNCTAD/DIAE/IA/2008/5 (2009).

23 Kathleen Claussen, Comment, The Casualty of Investor Protection in Times of Economic Crisis, 118 Yale L.J. 1545 (2009); see also Sykes, Alan O., Economic “Necessity” in International Law, 109 AJIL 296 (2015)CrossRefGoogle Scholar.

24 See Cho & Kurtz, supra note 21, at 191–92.

25 See, e.g., Philip Morris v. Uruguay, ICSID Case No. ARB/10/7, Award, paras. 287, 291 (valid exercise of police powers, including protecting public health, cannot be expropriatory), and para. 399 (with respect to fair and equitable treatment, “[t]he responsibility for public health measures rests with the government and investment tribunals should pay great deference to governmental judgments of national needs . . .”); see also Arato, Julian, The Margin of Appreciation in International Investment Law, 54 Va. J. Int'l L. 545 (2014)Google Scholar.

26 See, e.g., Continental Casualty Co. v. Argentine Republic, ICSID Case No. ARB/03/9, Award, paras. 161, 263–64 (Sept. 5, 2008) (analyzing Argentina's measures first under an “essential security” exception and using that analysis to also frame its application of fair and equitable treatment El Paso Energy Int'l Co. v. Argentine Republic, ICSID Case No. ARB/03/15, Award, paras. 325, 515, 562 (Oct. 31, 2011) (finding that a nonarbitrary, “reasoned scheme to answer a major crisis” so altered the legal framework that it violated fair and equitable treatment, and had to be justified under a security exception).

27 See, e.g., Amelia Keene, The Incorporation and Interpretation of WTO-Style Environmental Exceptions in International Investment Agreements, 18 J. World Trade & Inv. 62 (2017); cf. Céline Lévesque, The Inclusion of GATT Article XX Exceptions in IIAs: A Potentially Risky Policy, in Prospects in International Investment Law and Policy 363, 366–67 (Roberto Echandi & Pierre Suavé eds., 2013) (arguing that express exceptions could shrink, rather than expand, states’ discretion).

28 See, e.g., Federica Paddeu & Kate Parlett, COVID-19 and Investment Treaty Claims, Kluwer Arb. Blog (Mar. 30, 2020), at

29 GATT 1947, supra note 9, Art. XX(b).

30 Id. Art. XXI(b).

31 Responsibility of States for Internationally Wrongful Acts, Art. 25, GA Res. 56/83, Annex (Jan. 28, 2002).

32 Appellate Body Report, United States—Import Prohibition of Certain Shrimp and Shrimp Products, paras. 161–76, WTO Doc. WT/DS58/AB/R (Oct. 12, 1998).

33 Revisiting the Multilateral Trading System: Anatomy of the WTO Impasse, 112 ASIL Proc. 315 (2019).

34 See Daria Davitti, Jean Ho, Paolo Vargiu & Anil Yilmaz Vastardis, COVID-19 and the Precarity of International Investment Law, Medium (May 6, 2020), at

35 This view is shared across a range of ideological perspectives. See generally Anthea Roberts & Nicolas Lamp, Is the Virus Killing Globalization?: There's No One Answer, Barron's (Mar. 15, 2020).

36 Meyer, Timothy, Trade Law and Supply Chain Regulation in a Post-COVID World, 114 AJIL 637 [§ IV.B] (2020)Google Scholar.

37 Cf. Continental Casualty, supra note 26, para. 180 (stressing that the economic crisis at issue was accompanied by a “real risk of insurrection” and “partial breakdown of political institutions,” implying that other crises may not rise to the same level).

38 See, e.g., Lawrence O. Gostin, Global Health Law 296–97 (2016).

39 International Health Regulations (2005), Art. 43, May 23, 2005, 2509 UNTS 79 [hereinafter IHR 2005].

40 Cf. Julien Chaisse, Both Possible and Improbable: Could COVID-19 Measures Give Rise to Investor-State Disputes?, 13 Contemp. Asia Arb. J. 99, 165 (2020).

41 J. Benton Heath, Suspending Investor-State Arbitration During the Pandemic, Int'l Econ. L. & Pol'y Blog (May 12, 2020).

42 See, e.g., Philip Morris v. Uruguay, supra note 25, para. 388 (stressing “. . . the margin of appreciation enjoyed by national regulatory agencies when dealing with public policy determinations”).

43 Howse, supra note 11, at 47.

44 See, e.g., Cosmo Sanderson, Peru Hit with Claim by Road Concessionaire, Glob. Arb. Rev. (June 11, 2020).

45 Kathleen Claussen, Trade's Security Exceptionalism, 72 Stan. L. Rev. 1097 (2020); J. Benton Heath, The New National Security Challenge to the Economic Order, 129 Yale L.J. 1020 (2020); see also James Thuo Gathii, War, Commerce & International Law 182 (2009).

46 Barry Buzan, Ole Wæver & Jaap De Wilde, Security: A New Framework For Analysis 106 (1998).

47 See generally Robert D. Blackwill & Jennifer M. Harris, War by Other Means (2016).

48 See Oona A. Hathaway, After COVID-19, We Need to Redefine “National Security, Slate (Apr. 7, 2020).

49 National Security Strategy of the United States of America, White House 17–20 (Dec. 2017), available at

50 Anthea Roberts, Henrique Choer Moraes & Victor Ferguson, Toward a Geoeconomic Order in International Trade and Investment, 22 J. Int'l Econ. L. 655 (2019).

51 E.g., Jacob M. Schlesinger, How the Coronavirus Will Reshape the Trade World, Wall St. J. (June 19, 2020).

52 J. Benton Heath, Trade and Security Among the Ruins, 30 Duke J. Comp. & Int'l L. 223 (2020).

53 James Bacchus, The Content of a WTO Climate Waiver (Centre for Int'l Governance Innovation Papers No. 204, Dec. 4, 2018).

54 Kyla Tienhaara, Regulatory Chill in a Warming World, 7 Transnat'l Envtl. L. 229 (2018).

55 The Economist Intelligence Unit, Climate Change and Trade Agreements: Friends or Foes? 18 (2019).

56 James Bacchus & Jeffrey Sachs, Why We Need a Moratorium on Investment Disputes During COVID-19, Hill (June 9, 2020).

57 See, e.g., Elizabeth Warren, The Trans-Pacific Partnership Clause Everyone Should Oppose, Wash. Post (Feb. 25, 2015).

58 Josh Hawley, The WTO Should Be Abolished, N.Y. Times (May 5, 2020).

59 There nonetheless appears to be an emerging, if fragile, consensus that the pandemic requires multilateral cooperation. See Extraordinary G20 Leaders’ Summit, Statement on COVID-19, available at

60 This approach, though previously rejected by the Appellate Body, is not inconsistent with the treaty text. Appellate Body Report, EC—Measures Affecting Asbestos and Asbestos-Containing Products, para. 154, WTO Doc. WT/DS135/AB/R (Apr. 5, 2001).

61 See generally Sonia Elise Rolland & David M. Trubek, Emerging Powers in the International Economic Order 104–10, 133–35 (2019).

62 E.g., Kathleen Claussen, The Other Trade War, 103 Minn. L. Rev. Headnotes 1, 13 (2018); Markus Wagner, The Impending Demise of the WTO Appellate Body: From Centerpiece to Historical Relic?, in The Appellate Body of the WTO and Its Reform 67, 74–78 (Chang-fa Lo, Junji Nakagawa & Tsai-fang Chen eds., 2020).

63 See, e.g., Robert McDougall, The Crisis in WTO Dispute Settlement, 52 J. World Trade 867 (2018).

64 E.g., Geraldo Vidigal & Beatriz Stevens, Brazil's New Model of Dispute Settlement for Investment, 19 J. World Inv. & Trade 475 (2018).

65 Cf. Jeffrey L. Dunoff, The Death of the Trade Regime, 10 Eur. J. Int'l L. 733 (1999).

66 See generally Sergio Puig & Gregory Shaffer, Imperfect Alternatives: Institutional Choice and the Reform of Investment Law, 112 AJIL 361 (2018).

67 See generally Harlan Grant Cohen, What Is International Trade Law For?, 113 AJIL 326 (2019).

68 Cho & Kurtz, supra note 21, at 183.

69 See IHR 2005, supra note 39, Art. 2.

70 Dani Rodrik, Globalisation After COVID-19: My Plan for a Rewired Planet, Prospect (May 4, 2020); cf. Michael Fakhri, A History of Food Security and Agriculture in International Trade Law, 1945–2017, in New Voices and New Perspectives in International Economic Law 55 (John D. Haskell & Akbar Rasulov eds., 2020) (taking a similar approach to trade and food security).

71 See Mona Pinchis-Paulsen, Thinking Creatively and Learning from COVID-19, How the WTO Can Maintain Open Trade on Critical Supplies, Opinio Juris (Apr. 2, 2020).

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