The national security exception in wto law: emerging jurisprudence and future direction

• Author: Jacob Gladysz
• Position: J.D. Candidate 2022, Georgetown University Law Center
• Pages: 835-861

THE NATIONAL SECURITY EXCEPTION IN WTO

LAW: EMERGING JURISPRUDENCE AND

FUTURE DIRECTION

JACOB GLADYSZ*

ABSTRACT

The original General Agreement on Tariffs and Trade (GATT 1947) was written

with a broadly worded national security exception. This national security exception

was copied into the founding agreements of today’s World Trade Organization

(WTO). The exception allows a contracting party, under certain specified circum-

stances, to take “any action which it considers necessary for the protection of its essen-

tial security interests”notwithstanding other WTO commitments.

Despite the national security exception’s potential as an almost total escape clause

from WTO commitments, it was rarely invoked and even more rarely adjudicated.

That is, until now. Over the past five years, a number of WTO members—includ-

ing the United States—have invoked the national security exception as a defense to

alleged violations of WTO commitments. Additionally, in 2019 and 2020, the

WTO Dispute Settlement Body (DSB) interpreted the scope of the national security

exception for the first time in two landmark decisions: Russia – Measures

Concerning Traffic in Transit and Saudi Arabia – Measures Concerning

the Protection of Intellectual Property.

This Note analyzes the Russia and Saudi Arabia decisions and explores what

they mean for future applications of the national security exception in WTO law.

It suggests that despite the common approach applied in the Russia and Saudi

Arabia cases, the future direction of the WTO’s national security exception is far

from clear. Within the Russia and Saudi Arabia decisions lie significant ambigu-

ities that will condition both the future use and adjudication of the national secu-

rity exception. This Note uses the United States’ invocation of the national security

exception to defend its Section 232 steel and aluminum tariffs to demonstrate the

variety of outcomes that could result from future application of the Russia/Saudi

Arabia decisions. With the collision between national security and trade showing

no signs of abating, navigating the jurisprudential ambiguities of the national se-

curity exception will be a critical task for the WTO.

I. INTRODUCTION .................................... 836

II. NATIONAL SECURITY IN WTO AGREEMENTS ................ 838

* J.D. Candidate 2022, Georgetown University Law Center. The author extends his thanks to

Professor Timothy C. Brightbill for his guidance and encouragement throughout the process of

writing this note. V

C2021, Jacob Gladysz.

835

III. NATIONAL SECURITY IN WTO PANEL DECISIONS ............. 842

A. Russia – Measures Concerning Traffic in Transit ........ 843

B. Saudi Arabia – Measures Concerning the Protection of

Intellectual Property Rights ........................ 846

C. Common Features of WTO Panel Decisions ............. 848

IV. THE BIFURCATED APPROACH OF THE RUSSIA &SAUDI ARABIA

PANELS.......................................... 849

A. Articulation of Essential Security Interests.............. 849

B. Good Faith Requirement .......................... 850

C. Means-Ends Fit ................................ 852

V. PATHS FORWARD FOR THE NATIONAL SECURITY EXCEPTION ...... 854

A. Section 232 Tariffs ............................. 855

B. Application of the “Formal”Approach ................ 857

C. Application of the “Practical”Approach............... 860

VI. CONCLUSION &EVALUATION........................... 860

I. INTRODUCTION

The intersection of national security and trade is an increasingly im-

portant space in international trade law. In recent years, states have

incorporated notions of economic security into existing concepts of

national security. This “securitization”of economic concerns has

caused friction in the global trading order as matters relating to the

international flow of goods, capital, and ideas are fused with security

concerns.

1

The interaction of trade and national security is nothing new in the

history of trade. Both free-traders and trade skeptics have appealed to

national security as a key reason for either expanding or restricting

trade. Free traders tout the role of tradeand international trading rules

in promoting peace between nations.

2

Trade skeptics of both strong

and mild varieties argue that unrestricted imports from abroad can

1. “Securitization”is a term borrowed from the international relations literature, in which it

describes the process by which states incorporate new subjects into existing concepts of “security”

or “national security.”BARRY BUZAN,OLE WÆVER &JAAP DE WILDE,SECURITY:ANEW FRAMEWORK

FOR ANALYSIS 25 (1998).

2. See, e.g.,NORMAN ANGELL,THE GREAT ILLUSION:ASTUDYOF THE RELATIONSHIP OF MILITARY

POWER TO NATIONAL ADVANTAGE (1913) (arguing that the expansion of international trading

networks makes war less likely). For a more modern view of this thesis see Erik Gartzke, Quan Li &

Charles Boehmer, Investing in the Peace: Economic Interdependence and International Conflict,55INT’L

ORGS. 391 (2001).

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