Hostname: page-component-cd9895bd7-q99xh Total loading time: 0 Render date: 2024-12-24T17:42:19.907Z Has data issue: false hasContentIssue false
  • English
  • Français

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: [email protected]
Get access Rights & Permissions [Opens in a new window]

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

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

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

1 Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations (The Modern Library, 1937)Google Scholar Chapter II.

2 WTO ‘The WTO Can Contribute to Peace & Stability’, www.wto.org/english/thewto_e/whatis_e/10thi_e/10thi09_e.htm (accessed 5 August 2019).

3 Often attributed to the nineteenth-century French Liberal economist Frederic Bastiat.

4 General Agreement on Tariffs and Trade 1994 (GATT 1994), 1867 UNTS 187; Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), 1869 UNTS 299; General Agreement on Trade in Services (GATS), 1869 UNTS 183. Other provisions are: Article 3, Agreement on Trade Related Investment Measures, 1868 UNTS 186; Article 24.7, Protocol Amending the Marrakesh Agreement Establishing the World Trade Organization, WT/L/940 (27 November 2014); Article 1.10, Agreement on Import Licensing Procedures, 1868 UNTS 436.

5 E. Rothschild, ‘What is Security’, Daedalus 124(3) The Quest for World Order (Summer, 1995) 53, at 61.

6 Campbell, R. H. and Skinner, A. S. (eds.), Adam Smith: The Theory of Moral Sentiments (Oxford: Clarendon Press, 1976) 156Google Scholar, 290.

7 Ibid., 55–57.

8 S. Osisanya, ‘National Security versus Global Security’ (UN Chronicle, October 2014), https://unchronicle.un.org/article/national-security-versus-global-security (accessed 12 July 2019).

9 Voon, T., ‘Can Interbational Trade Law Recover? The Security Exception in WTO Law Entering a New Era’, 45 American Journal of International Law (2019) 113Google Scholar.

10 Alford, R. P., ‘The Self-Judging WTO Security Exception’, Utah Law Review 697 (2011) 698Google Scholar.

11 Ibid.

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.

13 Bahri, A., ‘Appellate Body Held Hostage: Is Judicial Activism at Fair Trial’, 53(2) Journal of World Trade (2019) 293Google Scholar, at 304–305.

14 Summary Record of the Twentieth Meeting, GATT/CP.3/SR20 (14 June 1949), at 3–4, Contracting Parties: Third Session, 2 June 1949.

15 Summary Record of the Twelfth Session, SR.19/12 (21 December 1961), at 196, Contracting Parties: Nineteenth Session, 9 December 1961.

16 Sweden – Import Restrictions on Certain Footwear, L/4250 (17 November 1975) at 3, https://docs.wto.org/gattdocs/q/GG/L4399/4250.PDF (accessed 8 August 2019).

17 Trade Restrictions Affecting Argentina Applied for Non-Economic Reasons, L/5319/Rev.1 (18 May 1982), www.wto.org/gatt_docs/English/SULPDF/90990462.pdf (accessed 8 August 2019).

18 United States – Trade Measures Affecting Nicaragua, L/5803 (9 May 1985), https://docs.wto.org/gattdocs/q/GG/L5999/5803.PDF (accessed 8 August 2019).

19 Egypt imposes one-year imports ban on motorcycles, tuk-tuks', Ahram Online (12 February 2014), http://english.ahram.org.eg/NewsContent/3/12/94095/Business/Economy/Egypt-imposes-oneyear-imports-ban-on-motorcycles,-.aspx (accessed 8 August 2019).

20 Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment: Thirty-Third Meeting of Commission A, E/PC/T/A/OV/ (24 July 1947) 33, 20–21.

21 Understanding on Rules and Procedures Governing the Settlement of Disputes, 1869 UNTS 401.

22 Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R (20 May 1996), DSR 1996:I, at 17.

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.

30 Mitchell, Andrew D., ‘Sanctions and the World Trade Organization’, in van den Herik, Larissa (ed.), Research Handbook on UN Sanctions and International Law (Edward Elgar, 2017) 293Google Scholar; Bhala, R., ‘National Security and International Trade Law: What the GATT Says, and What the United States Does’, 19(2) University of Pennsylvania Journal of International Economic Law (1998) 273Google Scholar, at 268; Schill, S. and Briese, R., ‘‘If the State Consider’: Self-Judging Clauses in International Dispute Settlement’, 13 Max Planck Yearbook of United Nations Law (2009) 110Google Scholar, at 61.

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.

42 Bossche, P. and Zdouc, W., The Law and Policy of the World Trade Organization (Cambridge University Press, 2013) 596Google Scholar.

43 Accordance with International Law of the Unilateral Declaration of Independence in Respect of Kosovo (22 July 2010), para. 27 [Application for Review of Judgment No.158 of the United Nations Administrative Tribunal, Advisory Opinion, 1073, para 14].

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).