Fitting China-Us Trade Into Wto PDF
Fitting China-Us Trade Into Wto PDF
Fitting China-Us Trade Into Wto PDF
2021-25
2022 Mich. St. L. Rev 319 (2022)
INTRODUCTION............................................................................... 320
I. THE POST-2016 CHINA–US TRADE RELATIONSHIP ................ 329
II. GATT ARTICLE XXI AND SOME HYPOTHETICAL TRADE
RESTRICTIONS ......................................................................... 336
A. GATT Article XXI .......................................................... 336
B. Seven Hypothetical China–U.S. Trade Restrictions ....... 342
III. INTERPRETATION OF ARTICLE XXI IN RUSSIA – TRAFFIC IN
TRANSIT AND THESE HYPOTHETICALS ..................................... 345
A. A Coda—What the Americans Intended in 1947 ............ 354
B. Russia – Traffic in Transit and U.S. Essential Security
Interests ........................................................................... 355
C. Russia – Traffic in Transit and “Emergencies in
International Relations”................................................... 357
IV. DECADES OF DISCUSSION ON ARTICLE XXI—AND WHAT IT
MIGHT SAY ABOUT THESE SCENARIOS................................... 360
A. Scenarios of Banning Imports for Safety Reasons .......... 362
B. Other “War or Other Emergency” Scenarios .................. 363
C. Scenarios of Strategic Import Restrictions Under XXI(b)365
D. Scenarios of Strategic Export Restrictions Under
XXI(b)(iii) ....................................................................... 369
E. Total Relationship Disputes ............................................ 373
V. CHINA’S RIGHT TO A NON-VIOLATION IMPAIRMENT CLAIM AND
A ‘WAIVER’ FOR CHINA–U.S. TRADE ..................................... 376
A. China’s Responsive Article XXIII Claim ....................... 377
B. A Comprehensive Waiver for China–U.S. Trade? .......... 383
CONCLUSION .................................................................................. 385
INTRODUCTION
During the four years of the Trump presidency, there was much
Sturm und Drang over the destruction of the rules-based international
trading system. That system—first as the General Agreement on
Tariffs and Trade (GATT), then as the World Trade Organization
(WTO), as well as hundreds of preferential trade agreements among
countries—has been one of the centerpieces of the post-World War
II order.1 The Trumpian tempest battered these institutions, but did
not break them. Even the Trans-Pacific Partnership survived—
without the United States and with a different name.2
But the institutions and norms of international trade are
questioned in 2022 in a way they were not in 2000, 2010, or 2015.
The received wisdom about trade no longer looks as wise as it once
did. Broadly raising tariffs on Chinese imports did not produce
calamity; if it produced some higher prices, the needle on the
consumer price index hardly oscillated.3 The COVID-19 pandemic
has forced a hard look at the balance between maximally-efficient
global supply chains and national capacity for essential products.4 An
1. The foundational agreement for the “GATT” system being the General
Agreement on Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-11, 55 U.N.T.S. 194
[hereinafter GATT].
2. According to the Australian Government, the renamed Comprehensive
and Progressive Agreement for Trans-Pacific Partnership “is a separate treaty that
incorporates, by reference, the provisions of the Trans-Pacific Partnership (TPP)
Agreement (signed but not yet in force), with the exception of a limited set of
suspended provisions.” See Comprehensive and Progressive Agreement for Trans-
Pacific Partnership (CPTPP), AUSTRALIAN GOV’T DEP’T OF FOREIGN AFFS. &
TRADE, https://www.dfat.gov.au/trade/agreements/in-force/cptpp/comprehensive-
and-progressive-agreement-for-trans-pacific-partnership (last visited Apr. 11, 2022).
3. The Consumer Price Index rose 2.1% in 2016, the last year before the
Trump Administration’s confrontation with China over trade. In 2017, 2018, and
2019, the Consumer Price Index rose 2.1%, 1.9%, and 2.3% respectively. The index
fell in 2020 (to 1.4%) in the wake of the coronavirus pandemic. See BUREAU OF LAB.
STAT. U.S. DEP’T OF LAB., NEWS RELEASE (Jan. 2017).
4. See, e.g., Travis J. Tritten, Defense Supply Chain Fixes Coming from
House Task Force by June, BLOOMBERG NEWS (Mar. 10, 2021, 12:59 PM),
https://news.bloomberglaw.com/tech-and-telecom-law/defense-supply-chain-fixes-
coming-from-house-task-force-by-june [https://perma.cc/FBG7-WCSM]; Chris
Megerian, With Computer Chips Scarce, Biden Orders Supply Chain Review, L.A.
TIMES (Feb. 24, 2021, 4:51 PM), https://www.latimes.com/politics/story/2021-02-
24/biden-to-order-review-of-critical-u-s-supply-chains [https://perma.cc/DN7Z-
LGZG]; Neil Irwin, It’s the End of the World Economy as We Know It, N.Y. TIMES
(Apr. 16, 2020), https://www.nytimes.com/2020/04/16/upshot/world-economy-
restructuring-coronavirus.html [https://perma.cc/L8RS-E7YS] (noting that the
COVID-19 pandemic “accelerate[s] [this] type of thinking . . . that there are critical
7. See Terry Jeffrey, US Has Run Up $5.5 Trillion in Trade Deficits with
China, TOWNHALL (Apr. 29, 2020 12:01 AM), https://townhall.com
/columnists/terryjeffrey/2020/04/29/us-has-run-up-55-trillion-in-trade-deficits-with-
china-n2567824 [https://perma.cc/JN3E-EC3Y]; Foreign Trade, supra note 6.
8. See generally Dominic Barton, Yougang Chen & Amy Jin, Mapping
China’s Middle Class, MCKINSEY Q. (June 1, 2013),
https://www.mckinsey.com/industries/retail/our-insights/mapping-chinas-middle-
class [https://perma.cc/9KV3-WVQG].
9. See generally OFF. OF THE SEC’Y OF DEFENSE, MILITARY AND SECURITY
DEVELOPMENTS INVOLVING THE PEOPLE’S REPUBLIC OF CHINA (2021); China
Defends Sweeping Maritime Claims After US Criticism, ASSOCIATED PRESS INT’L,
(Jan. 13, 2022), https://apnews.com/article/china-beijing-international-law-south-
china-sea-70b7c83936f7f59aaf9b1baba572bce5 [https://perma.cc/DK3P-9MEJ].
10. For raw numbers, see Employment, Hours, and Earnings from the
Current Employment Statistics Survey, U.S. BUREAU OF LAB. STATS.,
https://data.bls.gov/cgi-bin/surveymost?ce [https://perma.cc/6PMV-NZAM] (choose
“Manufacturing Employment” from the list; then Click “Retrieve data”; then choose
“1980” in the “from” box and “1999” in the ““to” box; then click “go”).
11. See Justin R. Pierce & Peter K. Schott, The Surprisingly Swift Decline
of US Manufacturing Employment, 106 AM. ECON. REV. 1632, 1632 (2016); Kerwin
Kofi Charles et al., The Transformation of Manufacturing and the Decline in U.S.
Employment, (Nat’l Bureau of Econ. Rsch., Working Paper No. 24468, 2018),
https://www.nber.org/system/files/working_papers/w24468/w24468.pdf
[https://perma.cc/W96V-BLA3]; David H. Autor et al., The China Syndrome: Local
Labor Market Effects of Import Competition in the United States, 103 AM. ECON.
REV. 2121, 2121 (2013); Paul Krugman explains:
Does the surge in the trade deficit explain the fall in employment? Yes, a lot of it. A
reasonable estimate is that the deficit surge reduced the share of manufacturing in
GDP by around 1.5 percentage points, or more than 10%, which means that it
explains more than half the roughly 20% decline in manufacturing employment
between 1997 and 2005.
Paul Krugman, What Economists (Including Me) Got Wrong About Globalization,
BLOOMBERG OP. (Oct. 10, 2019, 5:00 AM) (emphasis added),
https://www.bloomberg.com/opinion/articles/2019-10-10/inequality-globalization-
and-the-missteps-of-1990s-economics [https://perma.cc/VQX3-V2XL]; see also
Robert E. Scott, Trump’s ‘Blue-Collar Boom’ is Likely a Dud, ECON. POL’Y INST.
(Feb. 4, 2020, 2:29 PM), https://www.epi.org/blog/trumps-blue-collar-boom-state-
of-the-union/ [https://perma.cc/RG8P-6WNV] (“In addition, more than half of the
U.S. manufacturing jobs lost in the past two decades were due to the growing trade
deficit with China, which eliminated 3.7 million U.S. jobs, including 2.8 million
manufacturing jobs, between 2001 and 2018. In fact, the United States lost 700,000
jobs to China in the first two years of the Trump administration . . . .”).
12. As Kevin Rudd, former Prime Minister of Australia, put it “[f]or all the
eccentricities and flaws of the Trump administration, its decision to declare China a
strategic competitor, formally end the doctrine of strategic engagement, and launch a
trade war with Beijing succeeded in making clear that Washington was willing to
put up a significant fight.” Kevin Rudd, Short of War, 100 FOREIGN AFFS. 58, 69
(2021).
13. See, e.g., Bernie Sanders, Washington’s Dangerous New Consensus on
China, FOREIGN AFFS. (June 17, 2021), https://www.foreignaffairs.com/
articles/china/2021-06-17/washingtons-dangerous-new-consensus-china
[https://perma.cc/53LB-EGCW] (noting “a fast-growing consensus is emerging in
Washington that views the U.S.-Chinese relationship as a zero-sum economic and
military struggle” and “[i]t is quite remarkable how quickly conventional wisdom on
this issue has changed”); Yeling Tan, How the WTO Changed China, 100 FOREIGN
AFFS. 90, 91 (2021) (“WTO membership, the new consensus goes, has allowed
China access to the American and other global economies without forcing it to truly
change its behavior, with disastrous consequences for workers and wages around the
world.”); Eli Stokols & Don Lee, In First Call with Xi, Biden Looks to Reset U.S.-
China Relationship, L.A. TIMES (Feb. 10, 2021, 6:17 PM),
https://www.latimes.com/politics/story/2021-02-10/biden-has-first-call-with-xi-of-
china [HTTPS://PERMA.CC/4ANR-Z4WX] (reporting that President Biden says U.S.
will have “extreme competition” with China but is “committed to pursuing practical,
results-oriented engagements [with China] when it advances the interests of the
American people and those of our allies”); John R. Bolton, Trump Didn’t Think, or
Act, Strategically About China. Biden Needs to do Both., WASH. POST (Jan. 24,
2021), https://www.washingtonpost.com/opinions/2021/01/24/trump-didnt-think-or-
American leadership in the 2000s and 2010s was naïve about China
and ignored Beijing’s mercantilism for too long.14
In 2018, Ken Hassett, then chairman of the White House
Council of Economic Advisers, suggested that the United States and
other countries might kick China out of the WTO; in his own words,
“do we continue to let them stay in the WTO?”15 In 2018, the Wall
Street Journal was still exploring the idea of “threaten[ing] China
with expulsion from the WTO.”16 On the left flank of the political
spectrum, there were over 31,000 signatures on a petition at
act-strategically-about-china-biden-needs-do
both/?utm_campaign=wp_todays_headlines&utm_medium=email&utm_source=ne
wsletter&wpisrc=nl_headlines [https://perma.cc/R59B-DZM3] (discussing mistaken
“premise that economic reform would produce increased domestic freedom” in
China); Michael Schuman, The World is Splitting in Two, THE ATLANTIC, (Mar. 28,
2022), https://www.theatlantic.com/international/archive/2022/03/323kraine-war-
china-covid-lockdowns/629401/ [https://perma.cc/JR3F-T82Q] (describing “a shift
that is taking the world in a dangerous direction, splitting it into two spheres, one
centered on Washington, D.C., the other on Beijing.”).
14. See, e.g., Marco Rubio, China is Exploiting U.S. Capital Markets and
Workers. Here’s What Biden Should Do., WASH. POST (Jan. 28, 2021),
https://www.washingtonpost.com/opinions/global-opinions/marco-rubio-biden-
china-us-markets/2021/01/28/67038abc-6191-11eb-9061-07abcc1f9229_story.html
[https://perma.cc/G5VD-LVU3] (criticizing “the naïve consensus that allowed
China’s rise at America’s expense”); Marco Rubio, China is Complicit in Russia’s
War on Ukraine, WASH. POST (Mar. 18, 2022), https://www.washingtonpost.com/
opinions/2022/03/18/rubio-china-complicit-russia-ukraine/ [https://perma.cc/J3YX-
THLT] (“It is naïve and dangerous to believe the United States has ‘shared interests’
with a genocidal communist regime.”). See generally Justin Hughes, Globalization,
Revising the Terms of Trade, and the Return of ‘History,’ 14 OHIO ST. BUS. L.J. 15
(2020) (describing the national security concerns surrounding China’s economic
rise).
15. See Pete Kasperowicz, White House: We May Have to Kick China Out
of the WTO, WASH. EXAM’R (Aug. 13, 2018, 9:02 AM),
https://www.washingtonexaminer.com/news/white-house-we-may-have-to-kick-
china-out-of-the-wto [https://perma.cc/VQ26-LTEF] (reporting that during a Fox
Business interview, Hassett asked, “do we continue to let them stay in the WTO”);
Andrew Walker, US Adviser Hints at Evicting China from WTO, BBC NEWS (Nov.
21, 2018), https://www.bbc.com/news/business-46280318 [https://perma.cc/6JKJ-
PJ4B] (reporting that during a BBC interview, Hassett floated the idea of “evicting
China” from the WTO).
16. Greg Ip, For U.S. to Stay in WTO, China May Have to Leave, WALL ST.
J. (Aug. 22, 2019, 7:00 AM), https://www.wsj.com/articles/for-u-s-to-stay-in-wto-
china-may-have-to-leave-1534935600 [https://perma.cc/R2U3-QVG2].
21. There are other national security exceptions peppered throughout the
WTO Agreements, including Article 73 of the TRIPS Agreement (which is an
carbon copy of GATT Article XXI), Article 2.2 of the Agreement on Technical
Barriers to Trade, Article III(1) of the plurilateral Government Procurement
Agreement, and Article 3 of the Agreement on Trade-Related Investment Measures,
which simply carries over the GATT exceptions.
22. See GATT, supra note 1, art. XXI (emphasis added).
23. See, e.g., Daniel W. Drezner, When Disgraced Theories are
Respectable Again, WASH. POST (May 26, 2021, 7:00 AM),
https://www.washingtonpost.com/outlook/2021/05/26/when-disgraced-theories-are-
respectable-again/ [https://perma.cc/KY6T-ND4B] (discussing how “partisanship
played a huge role in marginalizing” the theory that the COVID-19 virus leaked
from a Wuhan lab and how “the Trump administration pushing the lab leak
hypothesis” actually hurt its credibility).
24. Martin Wolf, Davos 2019: Globalisation Faces Bumpy Road Ahead,
FIN. TIMES (Jan. 20, 2019), https://www.ft.com/content/c1846c4e-ffbf-11e8-b03f-
bc62050f3c4e [https://perma.cc/SJ9W-PMNC] (stating that the Trump
Administration “actions violate WTO rules, which define the national security
loophole very restrictively”); Antoine Martin & Bryan Mercurio, Trade Insights:
Trump, China, and a Tale of Aluminum and Steel Tariffs, ASIAPACIFICCIRCLE.ORG
(Apr. 27, 2018), https://asiapacificcircle.org/asia-pacific-insights-trends/trump-
china-a-tale-of-aluminum-steel-tariffs/ [https://perma.cc/28AE-PJ4W] (“It is also
unlikely that the U.S. national security defence will be upheld, given the lack of
evidence of a security threat and that the clause is intended to be used in situations
of war or threat of war.”); JENNIFER HILLMAN, THE BEST WAY TO ADDRESS CHINA’S
UNFAIR POLICIES AND PRACTICES IS THROUGH A BIG BOLD MULTILATERAL CASE AT
THE WTO, Testimony before the U.S.-China Econ. And Sec. Rev. Comm’n at 15,
June 8, 2018 (“[T]he definition of national security under 232 is broad while the
definition under WTO law is limited to trade in nuclear materials, or arms and
ammunition or actions taken during a time of war, [and] there is a high likelihood
that any U.S. actions taken under Section 232 will violate the WTO.”). Hillman is a
former American appointee to the WTO Appellate Body and a former General
Counsel at USTR. See id.
25. Michael J. Hahn, Vital Interests and the Law of GATT: An Analysis of
GATT’s Security Exception, 12 MICH. J. INT’L L. 558, 589 (1991) (emphasis
omitted).
26. See James Bacchus et al., Disciplining China’s Trade Practices at the
WTO: How WTO Complaints Can Help Make China More Market‐Oriented, CATO
INST. POL’Y ANALYSIS NO. 856, (Nov. 15, 2018), https://www.cato.org/policy-
analysis/disciplining-chinas-trade-practices-wto-how-wto-complaints-can-help-
make-china-more (discussing possible non-violation claims against China).
27. See Hillman, supra note 24, at 2.
28. See Brewster, supra note 19, at 1424 n.21 (suggesting “a waiver from
the WTO membership” for a wide-ranging China–US trade deal).
32. See, e.g., Alan Rappeport & Jim Tankersley, Trump Gets First Major
Trade Deal as South Korea Looks to Avoid Tariffs, N.Y. TIMES (Mar. 26, 2018),
https://www.nytimes.com/2018/03/26/business/south-korea-us-tariffs.html
[https://perma.cc/K9D8-22Y8]; Don Lee, NAFTA is History as Senate Gives Final
Approval to USMCA, L.A. TIMES (Jan. 16, 2020, 9:04 AM),
https://www.latimes.com/politics/story/2020-01-16/hold-nafta-is-history-as-senate-
gives-final-passage-to-usmca [https://perma.cc/S6H9-W74Z].
33. See, e.g., Stuart Lau & David M. Herszenhorn, EU and US Look to
Gang Up on China After Trade War Truce, POLITICO (Oct. 31, 2021, 3:40 PM),
https://www.politico.eu/article/eu-us-trade-war-truce-import-tariffs-steel-aluminum-
g20-summit-2021-china/ [https://perma.cc/D28D-VTCH]; Katie Silver, China’s
Trade Practices Come Under Fire, BBC NEWS (Oct. 21, 2021),
https://www.bbc.com/news/business-58991339 [https://perma.cc/CH64-D5SK]
(describing Australia, Canada, EU, Great Britain, Japan, and US all criticizing China
at WTO).
34. See U.S. DEP’T. OF COM., THE EFFECT OF IMPORTS OF
ALUMINUM ON THE NATIONAL SECUIRTY (2018),
https://www.commerce.gov/sites/default/files/the_effect_of_imports_of_aluminum_
on_the_national_security_-_with_redactions_-_20180117.pdf (stating that the
investigations were conducted pursuant to 19 U.S.C. § 1862 (Safeguarding national
security)). See also U.S. DEP’T. OF COM., THE EFFECT OF IMPORTS OF STEEL
ON THE NATIONAL SECURITY (2018),
https://www.commerce.gov/sites/default/files/the_effect_of_imports_of_steel_on_th
e_national_security_-_with_redactions_-_20180111.pdf.
35. See generally Heather Long, Trump Has Officially Put More Tariffs on
U.S. Allies Than on China, WASH. POST (May 31, 2018),
https://www.washingtonpost.com/news/wonk/wp/2018/05/31/trump-has-officially-
put-more-tariffs-on-u-s-allies-than-on-china/ [https://perma.cc/37A4-C3V8]; Jim
Brunsden & Shawn Donnan, US Grants Last-Minute Exemptions to Looming Steel
Tariffs, FIN. TIMES (Mar. 22, 2018), https://www.ft.com/content/fac4f67a-2db7-
11e8-a34a-7e7563b0b0f4 [https://perma.cc/VF7C-H423]; John Fritze, Canada, EU,
Mexico Balk as Trump Imposes Tariffs on Steel, Aluminum, USA TODAY, June 1,
2018, at 4B; The Editorial Board, Trump’s Steel Destruction, WALL ST. J. (June 1,
2018, 7:26 PM), https://www.wsj.com/articles/trumps-steel-destruction-1527809177
[https://perma.cc/RGY8-55CE].
36. James Hohmann, The Daily 202: Toothless Trade Resolution
Demonstrates Congress’s Unwillingness to Check Trump, WASH. POST (July 12,
2018), https://www.washingtonpost.com/news/powerpost/paloma/daily-
202/2018/07/12/daily-202-toothless-trade-resolution-demonstrates-congress-s-
unwillingness-to-check-trump/5b46a5d81b326b3348adde6a/
[https://perma.cc/UF7W-DD26] (“Trump has dubiously invoked Section 232 of the
Trade Expansion Act, which allows a president to slap duties on imports if U.S.
national security is threatened. The administration is literally claiming, for legal
purposes, that our nation’s safety is jeopardized by steel from Canada, Mexico and
the European Union.”).
37. Long, supra note 35 (quoting Matthew Rooney, managing director of
the Bush Institute, that “[t]o do tariffs in the name of national security is absurd”);
Id. (“Opponents of the tariffs say that the national security claim is bogus since the
U.S. has military ties with these nations.”).
38. Steve Charnovitz, EU Can Retaliate Immediately Against Trump’s
Metal Tariffs, INT’L L. & ECON. POL’Y BLOG (Mar. 9, 2018),
https://ielp.worldtradelaw.net/2018/03/eu-can-retaliate-immediately-against-trumps-
metal-tariffs.html [https://perma.cc/UCM7-A45V].
39. The L.A. Times Editorial Board, Trump Wants to Wield Tariffs Like a
Weapon. But Who Will He Actually Wound?, L.A. TIMES, July 5, 2018, at A10 (“By
misusing the ‘national security’ exception, Trump is only encouraging other
countries to do the same as a way to shield of their own goods and services.”)
40. Asma Khalid, Biden is Keeping Key Parts of Trump’s China Trade
Policy. Here’s Why, NPR.ORG (Oct. 4, 2021, 3:36 PM),
https://www.npr.org/2021/10/04/1043027789/biden-is-keeping-key-parts-of-trumps-
china-trade-policy-heres-why [https://perma.cc/6XNK-8VME]. The Biden
Administration has also maintained some of the other tariff hikes imposed by the
Trump Administration. See Ana Swanson, Biden Reinstates Aluminum Tariffs in
One of His First Trade Moves, N.Y. TIMES (Feb. 2, 2021),
https://www.nytimes.com/2021/02/02/business/economy/biden-aluminum-
tariffs.html [https://perma.cc/3T6A-5JJT].
41. Implemented from April to December 2018, the retaliatory measures
included tariff increases from 5% to 50% on a variety of agricultural, industrial, and
steel and aluminum products exported from the United States (e.g., sweet corn, rice,
fruits, nuts, liquor, cigarettes, cloth and clothes, steel products, aluminum waste and
scrape, wine, meat, alcohol, coal, plastic products, wood, paper, machinery, motor
cars, and motor cycles). See G/SG/N/12/EU/1 (May 18, 2018); G/SG/N/12/RUS/2
(May 22, 2018); G/SG/N/12/CHN/1 (April 3, 2018); G/SG/N/12/TUR/6 (May 22,
2018); G/SG/N/12/IND/1/Rev.1 (June 14, 2018), Customs Notice 18-08: Surtaxes
Imposed on Certain Products Originating in the United States (June 29, 2018,
Revised July 11, 2018) (Canada); Decree Modifying the Tariff Schedule of the Law
of General Import and Export Taxes, the Decree establishing the General Import
Tax Rate applicable during 2003 for goods originating in North America, and the
Decree establishing Various Sectoral Promotion Programs (enacted June 5, 2018;
effective June 5, 2018) (Mexico).
42. See World Trade Organization, Immediate Notification Under Article
12.5 of the Agreement on Safeguards to the Council for Trade in Goods of Proposed
Suspension of Concessions and Other Obligations Referred to in Paragraph 2 of
Article 8 of the Agreement on Safeguards, WTO Doc. G/SG/N/12/EU/1 (adopted
May 18, 2018).
47. See United States to Impose Third Set of Section 301 Tariffs on $200
Billion of Chinese-Made Products, DORSEY & WHITNEY LLP (Sept. 13, 2018),
https://www.dorsey.com/newsresources/publications/client-alerts/2018/09/us-third-
set-tariffs-on-products-from-china [https://perma.cc/LHT3-L72D] [hereinafter
DORSEY & WHITNEY]; see also Request for Comments Concerning Proposed
Modification of Action Pursuant to Section 301: China’s Acts, Policies, and
Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83
Fed. Reg. 33,608 (July 17, 2018).
48. See DORSEY & WHITNEY, supra note 47.
49. See Press Release, USTR Finalizes Tariffs on $200 Billion of Chinese
Imports in Response to China’s Unfair Trade Practices, USTR (Sept. 18, 2018),
https://ustr.gov/about-us/policy-offices/press-office/press-
releases/2018/september/ustr-finalizes-tariffs-200 [https://perma.cc/H7DL-7U8S]
(stating that the 10% increase was applied to “5,745 full or partial lines of the
original 6,031 tariff lines that were on a proposed list of Chinese imports announced
on July 10, 2018”). See generally USTR, TARIFF LIST PART 1 (Sept. 17, 2018)
(describing the tariff list as of Sept. 17, 2018).
50. See Robyn Dixon & Don Lee, The U.S.-China Trade War Just Got a
Lot Worse. And There’s No Quick Fix for Relations, L.A. TIMES (May 10, 2019,
11:21 AM), https://www.latimes.com/world/la-fg-trade-war-tariff-hike-20190510-
story.html [https://perma.cc/VFF6-TYCT]; David J. Lynch & Damien Paletta,
Trump Doubles Tariffs on $200 Billion of Chinese Imports, Escalating U.S.-China
Trade War, WASH. POST (May 10, 2019),
https://beta.washingtonpost.com/business/economy/ahead-of-us-china-trade-talks-
xi-writes-to-trump/2019/05/09/4adb6f10-727f-11e9-9eb4-
0828f5389013_story.html?noredirect=on [https://perma.cc/B2FZ-LWPD].
press reports say, it is likely that the full cost of the additional tariff
will not be passed onto consumers. First, as the tariffs on Chinese-
produced goods cause production to shift to other jurisdictions, the
cost of producing the goods may not be higher in the new production
locale (Vietnam, Thailand, Mexico, India, the United States) than it
was in China.51 In that case, prices rise little if at all. Second, even if
the production costs are higher in the new production locale, the
increased cost may not be as high as the tariff, especially over time.
For example, increasing tariffs on Chinese widgets from 3% to 25%
may cause widget production to move to Vietnam, where (let’s
imagine) widgets are 4% more expensive to manufacture. Even if the
full cost of the new place of production is passed onto consumers,
that is a 4% increase, not a 22% increase.
In December 2019, China and the United States reached a
“Phase 1” trade deal in which the United States dialed back some of
its tariff increases in exchange for a Chinese commitment to “import
various U.S. goods and services over the next two years in a total
amount that exceeds China’s annual level of imports for those goods
and services in 2017 by no less than $200 billion.”52 The Phase 1 deal
also included Chinese commitments to curb forced technology
transfers, to strengthen intellectual property, and to address a host of
nontariff barriers in everything from financial services to genetically-
modified foods.53 Some commentators noted the irony that mandated
purchase targets meant the agreement required more, not less, central
government intervention in the Chinese economy—and that much of
51. See Yan Zhang, Apple, Dell Consider Moving China Production in
Trade War. Who Else?, USA TODAY (July 24, 2019),
https://www.usatoday.com/story/money/2019/07/24/trade-war-tariffs-prompt-
companies-pull-china-production/1768515001/ [https://perma.cc/3XSE-BSXS]
(reporting that this is exactly what happened, “[a]bout 41% of American companies
are considering shifting manufacturing from China, or have already done so, the
American Chamber of Commerce in China said in a recent survey”). By 2021, the
U.S. trade deficit with China was shrinking and our deficit with other Asian
countries growing. Ken Robert, China Accounting for Lowest Percentage of U.S.
Imports Since 2008, FORBES (Dec. 23, 2021, 5:00 AM),
https://www.forbes.com/sites/kenroberts/2021/12/23/china-accounting-for-lowest-
percentage-of-us-imports-since-2008/?sh=e0559cc32927 [https://perma.cc/687R-
JDEH] (“[T]he U.S. trade deficit with China is like to be the lowest total since 2014,
excluding 2020. While it will still be three times the size of the deficit with Mexico,
it was about five times greater in 2018.”).
52. See U.S. TRADE REPRESENTATIVE, FACT SHEET: ECONOMIC AND TRADE
AGREEMENT BETWEEN THE UNITED STATES OF AMERICA AND THE PEOPLE’S REPUBLIC
OF CHINA (Jan. 15, 2020).
53. See id.
the rest of the deal were reforms that Beijing was already
undertaking and/or promises that Beijing had made before.
Whether or not Beijing could have met the deal’s purchase
commitments in normal times, COVID-19 plunged the international
economy into the deepest recession since the 2008 financial crisis.
Whereas China had committed to increase its importation of U.S.
agricultural products by 60% over the 2017 levels, the 2020 increase
was only 30%—an increase of $6.5 billion in U.S. agricultural
exports to China instead of the target of a $12.5 billion increase.54
According to calculations by Chad Bown at the Peterson Institute,
China’s 2020 purchase of products covered by the agreement
reached only 59% of the agreement target.55
As of fall 2021, the Biden administration has shown little
interest in returning to pre-2017 business-as-usual with Beijing.
Instead, as Richard Haas noted at the end of 2021, “U.S. policy
toward China has hardly changed since Biden became president.”56 A
more diplomatic, less erratic, equally tough line has been adopted57
and elevated tariffs have been left in place.58 Indeed, the constant
drumbeat from Beijing of human rights abuses, aggressive behavior
54. See U.S., China Phase One Agreement – Year One, MKT. INTEL (Feb.
10, 2021), https://www.fb.org/market-intel/u.s.-china-phase-one-agreement-year-one
[https://perma.cc/QX4J-MWSD].
55. See Chad P. Bown, US-China Phase One Tracker: China’s Purchases
of US Goods, PETERSON INST. FOR INT’L ECON. (Dec. 23, 2021),
https://www.piie.com/research/piie-charts/us-china-phase-one-tracker-chinas-
purchases-us-goods [https://perma.cc/WGY8-BFNK].
56. Richard Haas, The Age of America First, FOREIGN AFFS. (Nov./Dec.
2021), https://www.foreignaffairs.com/articles/united-states/2021-09-29/biden-
trump-age-america-
first?utm_medium=newsletters&utm_source=twofa&utm_campaign=The%20Age%
20of%20America%20First&utm_content=20211001&utm_term=FA%20This%20
Week%20-%20112017 [https://perma.cc/4QYR-HPNT].
57. See Olivier Knox, The Daily 202: Iran Tests Biden as He Joins First
International Summit as President, WASH. POST (Feb. 19, 2021),
https://www.washingtonpost.com/politics/2021/02/19/daily-202-iran-tests-biden-he-
joins-first-international-summit-president/ [https://perma.cc/HLP7-5L4L] (reporting
that President Biden has spoken of extreme competition and “long-term strategic
competition with China”); see also Josh Rogin, China Threw Down the Gauntlet to
the Biden Team on Day One, WASH. POST (Jan. 21, 2021),
https://www.washingtonpost.com/opinions/global-opinions/china-threw-down-the-
gauntlet-to-the-biden-team-on-day-one/2021/01/21/2e5a84a8-5c24-11eb-a976-
bad6431e03e2_story.html [https://perma.cc/GW9B-4WC7] (reporting that Secretary
of State Blinken “told senators Trump’s ‘basic principle was the right one’ and the
Trump administration was ‘right in taking a tougher approach to China’”).
58. See Stokols & Lee, supra note 13 (reporting that Biden is leaving
Trump administration tariffs in place).
Among its many trade disciplines that form the core disciplines
of the international trading system, GATT has two important
exception provisions—Article XX covering “general exceptions”
and Article XXI addressing “security exceptions.” Article XX
permits defections from the trade rules for a variety of different
concerns—ranging from safeguarding human health to protecting
gold reserves to addressing other countries’ use of prison labor.59 The
last of these provides some grounding for the Biden administration’s
decision to restrict solar panels and other products using silica
produced with forced labor in Xinjiang.60
Some of the hypothetical trade restrictions presented here might
be justified on some Article XX grounds, but our project is to test
these theoretical trade restrictions against what we know about
GATT’s national security exceptions.
(c) to prevent any contracting party from taking any action in pursuance of
its obligations under the United Nations Charter for the maintenance of
international peace and security.64
In 1949, one of the U.S. negotiators for the ITO (and the
GATT) described this language as a place where the proposed
multilateral trading rules “had touched the raw nerve of security
questions.”65 In the years since, while many countries justified their
own potentially GATT-inconsistent behavior on national security
grounds, Article XXI claims were absent from GATT/WTO dispute
resolution until they appeared in a rash of cases beginning in 2016.66
There is widespread agreement that the “which it considers
necessary” wording is to address those raw nerve sensitivities and
80. And just as the ICJ concluded that different words in different treaties
mean different things, WTO decisions have assumed that different words in the
same or different WTO agreements mean different things. See, e.g., Appellate Body
Report, European Communities – Measures Concerning Meat and Meat Products
(Hormones), para. 164, WTO Doc. WT/DS26/AB/R, WT/DS48/AB/R (adopted Jan.
16, 1998) (“The implication arises that the choice and use of different words in
different places in [a WTO Agreement] are deliberate, and that the different words
are designed to convey different meanings.”).
81. See, e.g., Lester & Zhu, supra note 68, at 8 (“Second, as explained
earlier, WTO dispute settlement probably cannot help here. A ruling that the Section
232 measures violate GATT obligations and are not justified under Article XXI is
unlikely to make the United States comply, and retaliation is already being imposed
by many countries even without authorization.”); Stuart Malawer, Trump, Trade and
National Security -- Blowing Up the WTO? 2, https://ssrn.com/abstract=3133770
(discussing 2018 steel and aluminum tariffs, “[t]he U.S. would likely be unable to
meet the requirements of Article XXI. . . . a global glut of steel and aluminum exists,
and the U.S. is neither in a time of war nor facing an international relations
emergency”).
82. See Glossary Term – Tariff Binding, WORLD TRADE ORG.,
https://www.wto.org/english/thewto_e/glossary_e/tariff_binding_e.htm#
[https://perma.cc/97FM-637R] (“Commitment not to increase a rate of duty beyond
an agreed level. Once a rate of duty is bound, it may not be raised without
compensating the affected parties.”).
83. The Trump administration half-heartedly tried to draw lines that made
some sense on national security criteria. For example, in waiving additional tariffs
on aluminum from Canada and Mexico in March 2018, Presidential Proclamation
9704 said, “I conclude that Canada and Mexico present a special case. Given our
shared commitment to supporting each other in addressing national security
concerns, our shared commitment to addressing global excess capacity for
producing aluminum, the physical proximity of our respective industrial bases, the
robust economic integration between our countries, the export of aluminum
produced in the United States to Canada and Mexico, and the close relation of the
economic welfare of the United States to our national security, see 19 U.S.C.
1862(d), I have determined that the necessary and appropriate means to address the
threat to the national security posed by imports of aluminum articles from Canada
and Mexico is to continue ongoing discussions with these countries and to exempt
aluminum articles imports from these countries from the tariff, at least at this time.”
Proclamation No. 9704, 83 Fed. Reg. 11620 (Mar. 15, 2018),
https://www.federalregister.gov/documents/2018/03/15/2018-05477/adjusting-
imports-of-aluminum-into-the-united-states [https://perma.cc/3RN3-46RE]
84. See David J. Lynch, Biden to Order Sweeping Review of U.S. Supply
Chain Weak Spots, WASH. POST (Feb. 23, 2021), https://www.washingtonpost.com/
business/2021/02/24/biden-supply-chain/ [https://perma.cc/KJ3K-MKHV]
(describing U.S. efforts “to buttress its limited domestic production capacity and
secure supplies from friendly nations” in rare earth metals); Evan Halper,
California’s Electric Car Revolution, Designed to Save the Planet, Also Unleashes a
Toll on It, L.A. TIMES (July 21, 2021), https://www.latimes.com/politics/story/2021-
07-21/californias-electric-car-revolution-designed-to-save-the-planet-inflicts-a-big-
toll-on-it [https://perma.cc/3K7R-HEPP] (“President Biden in June ordered the
Departments of Energy and the Interior to help industry bolster mining and
semiconductor chips where the United States has identified supply chain
issues.87
(7)Combat climate change scenario
After establishing its own standard for industrial production that slows
then halts American contribution to climate change, the United States
requires imported products from other countries to meet equivalent
standards; the new ‘climate change tariff structure’ effectively imposes
cost prohibitive tariffs on some categories of imports from China.
87. See Jenny Leonard et al., Biden Reassures Chip Summit of Bipartisan
Support for Funds, L.A. TIMES (Apr. 12, 2021),
https://www.latimes.com/business/technology/story/2021-04-12/biden-reassures-
chip-summit-of-bipartisan-support-for-funds; Ana Swanson & Don Clark,
Lawmakers Push to Invest Billions in Semiconductor Industry to Counter China,
N.Y. TIMES (June 11, 2021),
https://www.nytimes.com/2020/06/11/business/economy/semiconductors-chips-
congress-china.html [https://perma.cc/KU5H-9QUV].
88. See Russia – Traffic in Transit, supra note 31. Several parties noted “the
significance of this dispute as the first in which a WTO dispute settlement panel will
address the scope of the WTO security exceptions.” See Panel Report, Russia –
Measures Concerning Traffic in Transit, Addendum, paras. 1.3, 1.13, WTO Doc.
WT/DS512/R/Add. 1 (adopted Apr. 5, 2019) (“This proceeding will, therefore, be
the first occasion on which a WTO dispute settlement panel will interpret Article
XXI(b)(iii) of the GATT 1994.”).
Ukraine’s claims. Russia considers that the Panel lacks jurisdiction to evaluate
measures in respect of which Article XXI of the GATT 1994 is invoked.”).
96. See id. paras. 7.27, 7.29.
97. See id. paras. 7.24–7.28. All participating countries took the view that
Russia’s arguments were not jurisdictional. See id. passim (Australia, para. 7.35);
(Brazil, para. 7.37 (“affirmative defense,” not a jurisdictional argument)); (Canada,
para. 7.39 (no exception to DSU jurisdiction)); (China, para. 7.41); (European
Union, para. 7.42 (no exception to DSU jurisdiction)); (United States, para. 7.52
(panel had jurisdiction even if dispute was non-justiciable)).
98. See id. para. 7.30.
99. See id. para. 7.33.
100. See id. para. 7.34.
101. See id. paras. 7.150–7.154.
108. See, e.g., Geneva Convention (I) for the Amelioration of the Condition
of the Wounded and Sick in Armed Forces in the Field art. 3, Aug. 12, 1949
(“[C]onflict not of an international character”). This understanding of “war” in
GATT Article XXI is important because, as Deborah Pearlstein notes, “[t]he post-
Cold War period has seen wars involving non-state actors (non-international armed
conflicts, or NIACs) eclipse wars between states as the primary source of armed
conflict in the world . . . .” See Deborah Pearlstein, Armed Conflict at the
Threshold?, 58 VA. J. INT’L L. 369, 371 (2019).
109. See Russia – Traffic in Transit, supra note 31, paras. 7.72–.73. Beijing
surely would have preferred the word “primarily” not be there.
110. See id. para. 7.75 (“[T]he reference to ‘war’ in conjunction with ‘or
other emergency in international relations’ in subparagraph (iii), and the interests
that generally arise during war, and from the matters addressed in subparagraphs (i)
and (ii), suggest that political or economic differences between Members are not
sufficient, of themselves, to constitute an emergency in international relations for
purposes of subparagraph (iii).”).
111. See id. para. 7.76.
112. See id. para. 7.81.
113. See id. para. 7.89 (citing KENNETH J. VANDEVELDE, THE FIRST
BILATERAL INVESTMENT TREATIES: U.S. POSTWAR FRIENDSHIP, COMMERCE, AND
NAVIGATION TREATIES 145–54 (Oxford University Press 2017)).
114. See id. para. 7.90. While it appears that the panel did not have the
benefit of Pinchis-Paulsen’s deep research into the inner workings of the U.S.
delegation, she agrees that the panel aligned its views with the outcome of the U.S.
delegation’s internal discussions. See Pinchis-Paulsen, supra note 68, at 113, 176–
77.
115. I say “key phrases” because this particular exchange concerned
“essential security interests” and “emergency in international relations” in the older,
general exceptions clause that the Americans had proposed in the ITO Charter
negotiations. But the revised American proposal for a separate, free-standing
security exception, including the self-judging language, had already been submitted
by the United States delegation to the preparatory committee and was tabled by the
Chairman later in the same meeting.
116. See Russia – Traffic in Transit, supra note 31, para. 7.92.
117. See id. para. 7.92 (quoting Second Session of the Preparatory
Committee of the United Nations Conference on Trade and Employment, Verbatim
Report, Thirty-Third Meeting of Commission A Held on Thursday, 24 July 1947,
E/PC/T/A/PV/33 at 20).
as the time of our own participation approached, we were required, for our
own protection, to take many measures which would have been prohibited
by the Charter. Our exports and imports were under rigid control. They
were under rigid control because of the war then going on.118
118. See id. The travaux preparatoires here was in relation to the ITO
Charter, but the language was reproduced whole cloth in GATT. The Panel noted
that this “version of Article 94 of the Geneva Draft of the ITO Charter, adopted on
22 August 1947, was entitled ‘General Exceptions’ and contained wording nearly
identical to that appearing in Article XXI of the GATT 1947.” See id. para. 7.96.
119. See id. para. 7.76 n.152.
120. See id. paras. 7.100–7.101.
121. See id. para. 7.115.
122. See id. para. 7.121 (“The Panel notes that it is not relevant to this
determination which actor or actors bear international responsibility for the
existence of this situation to which Russia refers. Nor is it necessary for the Panel to
characterize the situation between Russia and Ukraine under international law in
general.”).
Second, the Panel then held that a Member must articulate its
essential security interest.129
At this point, to deal with the Russian refusal to speak of the
occupation of Crimea and parts of eastern Ukraine, the Panel reverts
to a familiar WTO interpretative tool—the accordion nature of
GATT obligations: “[w]hat qualifies as a sufficient level of
articulation will depend on the emergency in international relations
at issue.”130 The less the emergency is akin to armed conflict or the
breakdown of law and public order, the more “a Member would need
to articulate its essential security interests with greater specificity.”131
But despite Russian “allusiveness,” the Panel felt that “Russia’s
articulation of its essential security interests [wa]s minimally
satisfactory,” suggesting what amounts to a very deferential test one
that is some distance along the spectrum towards “self-judging.”132
With the final issue being “necessity,” the Panel itself turned
allusive, avoiding that word all together and simply saying that the
good faith inquiry required “that the measures at issue meet a
minimum requirement of plausibility in relation to the proffered
essential security interests, i.e. that they are not implausible as
‘it considers necessary’ to protect ‘its essential security interests’. This would mean
that a WTO Member has wide latitude to determine: (a) the action taken for the
protection of its essential security interests, including the nature, scope and duration
of the measure; and (b) the necessity of the measure.”).
127. See Russia – Traffic in Transit, supra note 31, para. 7.132.
128. See id. para. 7.133.
129. See id. para. 7.134.
130. See id. para. 7.135.
131. See id.
132. See id. para. 7.137.
138. See Pinchis-Paulsen, supra note 68, at 165 (emphasis omitted and
added) (quoting Harold Neff, ‘Security Exceptions to the ITO Charter,’
Memorandum for the Chairman of the US Delegation, Jul. 10, 1947, A1-704, file
‘US Delegation/Minutes/June 21-July 30, 1947’, RG 43, box 133, NACP at 1).
According to Pinchis-Paulsen, “Neff argued that the ‘content’ of the
exceptions . . . [does] ‘not fall within the power of any individual Member to
determine.’” Id.
139. See Pinchis-Paulsen, supra note 68, at 185.
between the United States and the Argentine Republic.140 In the face
of a near economic collapse, the arbitral panel concluded that for a
two-year period “Argentina was in a period of crisis during which it
was necessary to enact measures to maintain public order and protect
its essential security interests.”141 The panel expressly rejected the
idea that “essential security interests” was “only applicable to
circumstances amounting to military action and war.”142
Since Article XXI concerns state action, one must also consider
differences in capacities. Keeping the Straits of Hormuz open for oil
shipments or preventing offensive capability in space, which could
destroy the global network of GPS satellites, might be an “essential
security interest” of many WTO Members, but very few have the
capacity to be prepared, both short-term and long-term, to defend
those two particular security interests.
More importantly, the essential security interests of the United
States are plausibly unique: no other country has binding treaty
obligations to defend over 1.6 billion people in fifty other countries
covering the bulk of four continents. In service of that defense of 1.6
billion people, the United States maintains around 800 military
facilities of various sorts on foreign territory, a surface navy of 425+
ships, and an air force of 13,000 aircraft.143 In that context, it is
140. See ICSID: LG&E Energy Corp. v. Argentine Republic, para. 3, Oct. 3,
2006, 46 I.L.M. 40 (“The Bilateral Investment Treaty between the United States of
America and the Argentine Republic Concerning the Reciprocal Encouragement and
Protection of Investments was signed on 14 November 1991 . . . (and entered into
force 20 on October 1994).”). “Article XI of the Bilateral Investment Treaty
provides: ‘This Treaty shall not preclude the application by either Party of measures
necessary for the maintenance of public order, the fulfillment of its obligations with
respect to the maintenance or restoration of international peace or security, or the
protection of its own essential security interests.’” Id. para. 204.
141. See id. para. 226.
142. See id. para. 238. (“The Tribunal rejects the notion that Article XI is
only applicable in circumstances amounting to military action and war. Certainly,
the conditions in Argentina in December 2001 called for immediate, decisive action
to restore civil order and stop the economic decline. To conclude that such a severe
economic crisis could not constitute an essential security interest is to diminish the
havoc that the economy can wreak on the lives of an entire population and the
ability of the Government to lead. When a State’s economic foundation is under
siege, the severity of the problem can equal that of any military invasion.”).
143. See Jordan Valinksy, Here’s the Entire U.S. Navy Fleet in One Chart,
POPULAR MECHANICS, (Aug. 22, 2017), (“The United States Navy is a powerhouse.
The fleet consists of roughly 430 ships in active service or reserve.”),
https://www.popularmechanics.com/military/navy-ships/a15297/us-navy-entire-
fleet/. But the Navy itself considers that the “battle fleet” consists of approximately
300 ships. U.S. Navy, Naval Vessel Register, Fleet Size, at
149. See Second Written Submission of the United States, United States –
Certain Measures on Steel and Aluminum Products, WT/DS564 (Apr. 17, 2020).
150. My thanks to several colleagues who are francophone or hispanophone
jurists or diplomats for their input on this point, although the conclusion remains my
own.
151. See U.S. Indo-Pac. Command, Off. of the Staff Judge Advoc., The
South China Sea Arbitration Award, 97 INT’L L. STUD. 62, 63–64 (2021); see also
U.S. Indo-Pac. Command, Off. of the Staff Judge Advoc., China’s Excessive
Maritime Claims, 97 INT’L L. STUD. 18, 23 (2021).
152. See Shannon Osaka, 38 Countries Have Declared a “Climate
Emergency.” Should the U.S. Be Next?, SALON (Jan. 28, 2021, 6:30 AM),
https://www.salon.com/2021/01/28/38-countries-have-declared-a-climate-
emergency-should-the-us-be-next_partner/ [https://perma.cc/38A5-4SPQ]; Ledyard
King, ‘A Moral Imperative:’ AOC, Bernie Sanders Call for Climate Emergency
Declaration, USA TODAY (July 9, 2019, 4:19 PM), https://www.usatoday.com/
story/news/politics/2019/07/09/aoc-bernie-sanders-push-congress-declare-climate-
emergency/1684407001/ [https://perma.cc/DEA4-YZ43].
153. See Osaka, supra note 152.
154. See Russia – Traffic in Transit, supra note 31, para. 7.60.
155. See Trujillo, supra note 68, at 218 (“Would climate change or a global
health pandemic become the type of emergency contemplated by a crisis involving
‘other emergency in international relations,’ as expressed in the GATT national
security exception?” (internal citation omitted)). But see Felicity Deane, Comment,
The WTO, the National Security Exception and Climate Change, 6 CLIMATE &
CARBON L. REV. 149, 149, 155–56 (2012) (arguing that it is unlikely that Article
XXI can be used to excuse GATT-inconsistent climate mitigation measures).
156. See, e.g., Jay Manoj Sanklecha, The Limitations on the Invocation of
Self-Judging Clauses in the Context of WTO Dispute Settlement, 59 INDIAN J. INT’L
L. 77, 31 (2021) (“The Panel noted that political or economic conflicts, unless rising
to military and defence interests or maintenance of public order interests, would not
constitute emergencies in international relations. This appears to be contrary to
practice, where the security exception had been invoked by member States to
address political conflicts. Such an interpretation can also run counter to the
developmental aspirations of third world countries which face unique national
security issues owing to changing geo-political/climatic conditions that cannot be
aligned with the tradition understanding of the term emergency in international
relations. While the Panel appeared to justify this inter alia on the basis of the
negotiating history, it is worth noting that WTO tribunals, have adopted
interpretations of text which have gone much beyond than that originally intended
by the drafters.”); see also Shin-yi Peng, Cybersecurity Threats and the WTO
National Security Exceptions, 18 J. INT’L ECON. L. 449, 470–72 (2015) (considering
whether cybersecurity threats are essential security interests under Article XXI).
157. For example, the 2021 “Climate Risk Analysis” of the U.S. Department
of Defense recognizes that “Climate change is reshaping the geostrategic,
operational, and tactical environments with significant implications for U.S. national
security and defense” and speaks to “[g]lobal efforts to address climate change –
including actions to address the causes as well as the effects.” See DEP’T. OF DEF.,
DEPARTMENT OF DEFENSE: CLIMATE RISK ANALYSIS 2 (2021). France has also
included climate change in its assessment of its national security interests. See FR.
STRATEGIC REV. COMM., DEFENCE AND NATIONAL SECURITY STRATEGIC REVIEW 29
(2017).
standards.158 But that does not mean that the historical record has
been blank—far from it. Over the decades, many countries have
asserted Article XXI as a basis for restricting imports or exports in
fact patterns that may bear on the hypotheticals above. Sometimes
they have made these claims and the other GATT/WTO Members
have not reacted at all; other times, there has been substantial back
and forth in GATT and WTO meetings. For purposes of how Article
XXI might apply to the hypothetical U.S. actions above, let us
organize these “Article XXI episodes” into five clusters: (a)
scenarios where a country banned imports for safety reason; (b)
scenarios of war or international emergency under XXI(b)(iii); (c)
scenarios of strategic import restrictions under XXI(b)(ii); (d)
scenarios of strategic export restrictions under XXI(b)(ii); and (e)
what we might call “total dispute” scenarios where one country
broadly seeks to “decouple” its economic relations from another
country.159
158. See Russia – Traffic in Transit, supra note 31, at para. 7.80 (“In the
Appendix to this Report, the Panel surveys the pronouncements of the GATT
contracting parties and WTO Members to determine whether the conduct of the
GATT contracting parties and the WTO Members regarding the application of
Article XXI reveals a common understanding of the parties as to the meaning of this
provision. The Panel’s survey reveals differences in positions and the absence of a
common understanding regarding the meaning of Article XXI. In the Panel’s view,
this record does not reveal any subsequent practice establishing an agreement
between the Members regarding the interpretation of Article XXI in the sense of
Article 31(3)(b) of the Vienna Convention.”).
159. This discussion does not include every known Article XXI or XXI-like
claim; frankly, some are not worth mentioning. For example, in the early 1950s,
Denmark and the Netherlands objected to some U.S. restrictions on cheese
importations that the U.S. had initially justified on “essential security interest”
grounds. Public statements showed that U.S. government officials did not believe
that the restrictions were justifiable on GATT Article XXI grounds. See
Memorandum by the United States Delegation, Item 30 – Restrictions on Imports of
Dairy Products into the United States, Memorandum Submitted by the United States
Delegation, at 6, GATT Doc. GATT/CP.6/28/Add.1 (Sept. 24, 1951) (The Under
Secretary of Agriculture noted to one Senate Committee that “[i]t seems unlikely
that we will be able to convince these [objecting] countries that certain imports,
which would at most have a limited effect on our agriculture, would endanger the
essential security interests and economy of the United States.”). Being unable to get
Congress to remove the restriction, the U.S. agreed to Dutch withdrawal of tariff
concessions on American wheat—a retaliatory action that continued until at least
1959.
argued that Article XXI was an “inherent right” and the “exercise of
these rights . . . required neither notification, [nor] justification, nor
approval, a procedure confirmed by thirty-five years of
implementation of the General Agreement.”167 Australia also took the
view that neither notification nor justification was necessary for
invocation of Article XXI.168 Canada considered its action in line
with prior understandings of Article XXI and argued that, what
would be unprecedented, would be a GATT decision to examine a
member’s Article XXI decision.169
But several Latin American and eastern European countries
along with Pakistan and Zaire opposed the trade sanctions against
Argentina without clearly stating whether they believed the sanctions
legal under Article XXI.170 Interestingly, Brazil took the position that
while the invasions of the Falkland/Malvinas had triggered “an
emergency in international relations,” the crisis was limited to one
region and countries outside the region and countries not directly
involved in the conflict should not invoke XXI(b)(iii).171 Spain
similarly believed that Great Britain could invoke Article XXI, but
not the entire European Community.172 On the other hand, Norway,
New Zealand, and Singapore all adopted positions that supported a
GATT member’s right to self-judge “essential security interests”
under Article XXI.173
While there was some discussion about whether the GATT
Council should attempt a formal interpretation of Article XXI, it was
clear that consensus would be elusive. Eventually, in November
1982, the GATT adopted a Ministerial Declaration concerning
Hungary, Japan, New Zealand, Norway, the Philippines, Singapore, the United
States, and the ten countries of the European Communities (Belgium, Denmark,
France, West Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, and the
United Kingdom). See Minutes of Meeting, Held in the Centre William Rappard on
7 May 1982, at 7–11, C/M/157 (June 22, 1982) [hereinafter GATT Council Meeting
May 1982].
167. See id. at 10–12; Communication to the Members of the GATT
Council, Trade Restrictions Affecting Argentina Applied for Non-Economic
Reasons, para. 1(b), GATT Doc. L/5319/Rev.1 (May 18, 1982).
168. See GATT Council Meeting May 1982, supra note 166, at 11.
169. See id. at 10–11.
170. See id. at 5 (Uruguay, Zaire), at 6 (Colombia, Cuba, Dominican
Republic, Ecuador, Uruguay) at 7 (Pakistan), at 9 (Poland)
171. See id. at 5.
172. See id. at 6.
173. See id. at 7 (Singapore), at 8 (Hungary), at 9 (New Zealand), at 10
(Norway).
183. See Group of Three, Preliminary Report of the Group of Three, at 23,
GATT Doc. W(71)2 (Apr. 23, 1971).
184. See Notes on Individual Import Restriction, supra note 182, at 49.
185. See id.
186. See ESC, Amendment Proposed by the Australian Delegation, Second
Session of the Preparatory Committee of the United Nations Conference on Trade
and Employment, U.N. Doc. E/PC/T/W/264 (Aug. 6, 1947).
187. See ESC, Verbatim Report, Second Session of the Preparatory
Committee of the United Nations Conference on Trade and Employment, at 17,
U.N. Doc. E/PC/T/A/PV/36, WTO Archives (Aug. 12, 1947).
188. See id. at 19.
in 1947 and that Article XXI(b)(ii) now covers any trade restriction
where, as the American delegate said, the Member believes the trade
would “supply a military establishment, immediately or
ultimately.”189
There may also be an overlooked tea leaf to be read in the
Dutch–American exchange about the meaning of “emergency in
international relations” back in 1947. Recall that during the ITO
negotiations the Dutch delegate asked what was meant by
“emergency in international relations.” Commentators have
uniformly focused on the American delegate’s response. But the
Dutch delegate made his query in a question in which he proposed
that an “emergency” might simply be instability prompting a country
to both stockpile food imports and protect its own agricultural
production in GATT-inconsistent ways: the Dutch delegate asked if
Article XXI would cover a situation where the Netherlands “must do
everything to develop [its] agriculture, notwithstanding all the
provisions of this Charter.”190 Neither the American delegation nor
anyone else challenged this understanding of the words. When asked
if the American had provided a satisfactory answer, the Dutch
delegate said he agreed with the text and “certainly could not
improve the text myself”—which makes it sound like the Dutch
delegate believed he had confirmation of what he had presented as
189. See THE WTO ANALYTICAL INDEX: GUIDE TO WTO LAW AND PRACTICE,
GATT ANALYTICAL INDEX (PRE-1995), ARTICLE XXI SECURITY EXCEPTIONS 600
(“During discussions in the Geneva session of the Preparatory Committee, in
connection with a proposal to modify Article 37(g) [XX(g)] to permit export
restrictions on raw materials for long-term defense purposes, the question was put
whether the phrase ‘for the purpose of supplying a military establishment’ would
permit restrictions on the export of iron ore when it was believed that the ore would
be used by ordinary smelting works and ultimately for military purposes by another
country. It was stated in response that ‘if a Member exporting commodities is
satisfied that the purpose of the transaction was to supply a military establishment,
immediately or ultimately, this language would cover it’.”).
190. After asking what “emergency in international relations” and “essential
security interests” meant, the Dutch delegate, Dr. Antonius Bernadus Speekenbrink,
offered “I might say that in a time of emergency we have no Peace Treaties signed,
and I consider that it is essential for me to bring as much food to the country as
possible, so that I must do everything to develop my agriculture, notwithstanding all
the provisions of this Charter. It might be a little bit far-fetched, but as it stands here
it really is worrying me. I cannot get the meaning of it.” Simon Lester, The Drafting
History of GATT Article XXI: The U.S. View of the Scope of the Security Exception,
INT’L L & ECON. POL’Y BLOG (Mar. 11, 2018), https://worldtradelaw.typepad.com/
ielpblog/2018/03/drafting-history-of-gatt-article-xxi.html [https://perma.cc/3E2J-
HE85].
191. See U.N. ESCOR, 2d Sess., 33d mtg. of Comm’n A at 20–21, U.N.
Doc. E/PC/T/A/PV/33 (July 24, 1947).
192. See Bonnan, supra note 76, at 3.
193. See Article XXI(b)(ii) is written in very general terms. As one
commentator noted, “[n]o mention is made of the actuality or imminence of all the
circumstances justifying the measure. No explicit temporal limit is provided. No
mention is made of harm or injury. Neither is there any specific procedural condition
such as the undertaking of a national investigation by the State in question.”
Bonnan, supra note 76, at 5.
1941,” and that during this time, American “exports and imports
were under rigid control.”194
So, what was the American delegate saying was included by
his example? The Export Control Act of July 2, 1940 had authorized
the President, in the interest of national defense, to prohibit or curtail
the export of basic war materials.195 Beginning in August 1940,
licenses were refused for the export to Japan of aviation gasoline and
most types of machine tools.196 In September, that embargo was
extended to iron and steel scrap. In addition to these categories, by
the winter of 1940–1941, the United States had ceased exports to
Japan of aluminum, copper, iron and steel manufactures, lead, zinc,
and “a variety of other commodities [deemed] important to war
effort.”197 Beyond restrictions on exports to Japan, on October 16,
1940, the United States had imposed a total embargo on the export of
iron and steel scrap to countries outside the Western Hemisphere and
Great Britain.198 All that was justifiable in the American mind—and
the Dutch acceptance—in this exchange on what would become
GATT Article XXI(b)(iii).
This scenario—restricting exports to diminish the military
capacity of another country or countries—also occurred at least twice
in GATT history when western countries sought to restrict
technology sales to Czechoslovakia.
The GATT had been signed in October 1947 during the Geneva
negotiations for the ITO Charter; although the Americans had
initially held out hope of including the Soviet Union in the post-war
trading system, by the time of the Geneva conference it was evident
that the Soviet Union would not join the ITO.199 Czechoslovakia was
the only eastern European country among the initial twenty-three
194. See U.N. ESCOR, 2d Sess., 33d mtg. of Comm’n A at 19–20, U.N.
Doc. E/PC/T/A/PV/33 (July 24, 1947).
195. See U.S. DEP’T OF STATE, PEACE AND WAR: UNITED STATES FOREIGN
POLICY 1931-1941 97 (1943), https://www.ibiblio.org/hyperwar/Dip/PaW/
index.html [https://perma.cc/KSL3-4WPL].
196. See id.
197. Id. at 98.
198. Id.
199. THOMAS W. ZEILER, FREE TRADE FREE WORLD: THE ADVENT OF GATT
136 (1999) (concluding that by mid-July 1947 it was clear that the USSR would not
participate in the ITO); ROBERT A. POLLARD, ECONOMIC SECURITY AND THE ORIGINS
OF THE COLD WAR, 1945-1950 53 (1985) (noting by Geneva ITO talks it was clear
that the U.S. and the USSR were in “almost irrevocable deadlock”); Jacob Viner,
Conflicts of Principle in Drafting a Trade Charter, 25 FOREIGN AFFS. 612, 626
(1947) (recognizing, in the context of negotiating the ITO Charter, “the tension and
the mutual distrust between the United States and Soviet Russia”).
has Failed to Carry out its Obligations Under the Agreement Through its
Administration of the Issue of export licenses, Summary Record of the Twenty-
Second Meeting of the Contracting Parties, GATT Doc. GATT/CP.3/SR/22 (June 8,
1949) [hereinafter Request of Czechoslovakia]; Hahn, supra note 25, at 569 (“The
United States and its allies interpreted article XXI as a virtually unlimited escape
clause, controlled only by the general policy notion that the GATT system should
not be undermined.”).
206. Request of Czechoslovakia, supra note 205.
207. Id.
208. Id.
209. Comments by Italy, IV.B.17.1, Inventory of Non-Tariff Measures,
GATT Doc. NTM/INV/I-V/Add.10 (May 2, 1985); Comments by United Kingdom,
IV.B.18, Inventory of Non-Tariff Measures, GATT Doc. NTM/INV/I-V/Add.10
(May 2, 1985). Czechoslovakia characterized the measure maintained by Italy as an
“embargo” on exports of electronic systems to Czechoslovakia, and the measure
maintained by the United Kingdom as an embargo on exports of computers and
related equipment. Italy responded that there was no embargo, but an inter-
ministerial Committee which examined each export license application.
210. Comments by Italy, IV.B.17.1, Inventory of Non-Tariff Measures,
GATT Doc. NTM/INV/I-V/Add.10 (May 2, 1985); Comments by United Kingdom,
IV.B.18, Inventory of Non-Tariff Measures, GATT Doc. NTM/INV/I-V/Add.10
(May 2, 1985).
Finally, there are a few historic brushes with Article XXI that
might be called “total relationship” disputes. Conceptualized this
way, these Article XXI disputes have some structural similarity to
what many in the United States feel is the basic incompatibility of
American society based on representative democracy, civil rights,
and a market economy with China’s continuing mercantilism and
increasing authoritarianism.
For example, in a long simmering issue, in 2002, India asserted
that Pakistan had systematically denied India MFN status in violation
of the GATT and other WTO agreements.211 Pakistan responded that
its economic relations with India had to be seen in the context of the
“difficult political relations between the two countries over the
course of the past 50 years”212—a diplomatic understatement given
211. Trade Policy Review Body, Trade Policy Review, Pakistan, WTO Doc.
WT/TPR/M/95 (Mar. 8, 2002).
212. Trade Policy Review Body, Trade Policy Review, Pakistan, WTO Doc.
WT/TPR/M/95/Add.1 (Apr. 11, 2002).
that there have been at least three short wars between Pakistan and
India since the founding of the GATT. Pakistan’s view was that
since the 1965 Indo–Pakistani war, normalization of trade relations
had occurred issue-by-issue and that both countries’ behavior in this
respect was permissible under Article XXI(b)(iii).213
In contrast to the enduring difficulties between Pakistan and
India, in 1999, Nicaragua decided to decouple itself partially from
Honduras and Colombia after the latter two countries entered a
bilateral Treaty on Maritime Delimitation in the Caribbean Sea (the
Ramírez-López Treaty) that Nicaragua considered “expansionist”
and “to the detriment of Nicaragua’s territorial rights.”214 In response
to the treaty, Nicaragua imposed a tax on all goods and services
manufactured in, originating in, or imported from Honduras and
Colombia; Nicaragua also cancelled licenses for all fishing vessels
under Honduran and Colombian flags.215 Nicaragua considered its
actions permissible under “Article XXI of GATT 1994 and Article
XIV bis of GATS, which reflected a State’s inherent right to protect
its security, and therefore constituted a general exception to
multilateral trade rules.”216 Six years later, Nicaragua was still
contending that the restrictions against Colombia were applied in
conformity with Article XXI.217
A third situation happened decades earlier, during Portugal’s
accession to the GATT in the early 1960s. During that period, Ghana
had argued that Portugal’s refusal to decolonize Angola was a threat
to Ghanaian essential security interests; Ghana expressly took the
view that a “country’s security interests may be threatened by a
223. Id.
224. Summary Record of the Fourth Meeting, Recourse to Articles XXII and
XXIII, GATT Doc. SR.43/4 (Jan 12, 1988); GATT Council, United States — Trade
Policy Review Mechanism, GATT Doc. C/RM/G/3 (Nov. 16, 1989); Minutes of
Meeting, Questions from the United States to Viet Nam, GATT Doc. G/LIC/M/41
(Jul. 9, 2015).
225. Most GATT disputes are brought under GATT Article XXIII(1)(a) on
the basis of “the failure of another contracting party to carry out its obligations under
this Agreement,” but Article XXIII(1)(b) provides that a claim “that any benefit
accruing to it directly or indirectly under this Agreement is being nullified or
impaired” can be brought on the basis of “the application by another contracting
party of any measure, whether or not it conflicts with the provisions of this
Agreement.” See GATT art. XXIII. This is a “non-violation” claim.
226. And perhaps what experienced international trade people mean when
they have discussed the idea of “threaten[ing] China with expulsion from the WTO.”
Greg Ip, For U.S. to Stay in WTO, China May Have to Leave, WALL ST. J. (2022).
Photographic Film, supra note 229, para. 10.32 (“[W]e thus consider that the United
States, with respect to its claim of non-violation nullification or impairment under
Article XXIII:1(b), bears the burden of providing a detailed justification for its claim
in order to establish a presumption that what is claimed is true. It will be for Japan to
rebut any such presumption.”).
243. Japan – Photographic Film, supra note 229, paras. 10.79–10.80; Id.
para. 10.61 (“[F]or expectations to be legitimate, they must take into account all
measures of the party making the concession that could have been reasonably
anticipated at the time of the concession.”); European Communities – Asbestos,
supra note 231, paras. 8.283, 8.289.
244. European Communities – Asbestos, supra note 231, para. 8.281.
245. Id. para 8.282. The panel added “Here, it is a question of measures to
protect public health under Article XX(b), that is to say, measures whose adoption is
expressly envisaged by the GATT1994.” Id. at para. 8.291. The same logic would
apply in relation to Article XXI.
246. Japan – Photographic Film, supra note 229, para. 10.77 (emphasis
added).
247. Alford, supra note 74, at 749. As Roger Alford notes in his analysis of
the interaction between GATT Articles XXI and XXIII(1)(b), “[i]n some cases, such
as the Arab League boycott of Israel or the United States boycott of Cuba, it will be
difficult for a Member State to argue that it had any reasonable expectations of
WTO benefits.” Id.
248. Dispute Settlement Understanding, art. 26(1)(b) (“[W]here a measure
has been found to nullify or impair benefits under, or impede the attainment of
objectives, of the relevant covered agreement without violation thereof, there is no
obligation to withdraw the measure.”); see also id. art. 26(1)(c), (d).
CONCLUSION