Defining ‘Security’ in today’s time: An Analysis of Article XXI of the GATT, 1994

Security as a concept has managed to evade definition within international law, yet it is a concept which features extensively in International Law.^[1] Under the WTO system of international trade relations and dispute settlement,^[2] contracting nations agreed to give up specific dimensions of their state sovereignty in order to contribute towards international trade liberalisation. Yet, under the same rules based system, there exist exceptions wherein contracting parties may take measures despite them being antithetical to trade liberalisation if such measures qualify certain criteria.^[3] This post examines the Security Exception enshrined under Article XXI of the GATT, 1994 and attempts to determine the place for ‘security’ as a concept in international trade law jurisprudence by, first, exploring the concept’s evolving understanding in contemporary times and then, scrutinising current jurisprudence around Article XXI. This is done by analysing the WTO Panel’s decision in Russia – Traffic in Transit. Through this analysis, the authors wish to provide guidance on two questions, namely:

1. What are the current requirements for a successful invocation of the ‘security exception’ before the WTO?
2. Is the Panel’s decision in Russia – Traffic in Transit in line with the spirit of the GATT as envisaged at the time of drafting?

Conceptualising ‘Security’

The narrow, militarised conceptualisation of security prevalent earlier has become virtually non-existent today. The evolution of ‘security’ has progressed largely due to the adoption of a more liberal interpretation of security at the individual and international levels; the gradual drifting away from looking at security only from the national perspective. The Copenhagen school identifies that while the ‘reference object’ for security has historically been the state, more recent security agendas have revolved around ‘collective concepts’.^[4] Even when security is conceptualised broadly, it is largely concerned with the security of the state. Framing of certain security concerns of humans, in general, as security concerns of states, in specific, allows the the state to use its power to protect itself under the guise of protection of its citizens or other humans.

Security, then, may best be understood through Arnold Wolfers’ conceptualisation as something which ‘may not have any precise meaning at all’. However, he does specify two distinct dimensions within security: objective and subjective dimensions, which allow for a specified set of values a state may pursue to attain security.^[5] Notwithstanding this, a formulation through this perspective places no limits on what would qualify as security. This poses specific problems for WTO jurisprudence due to the exemption under Art. XXI(b)(iii) for actions taken to protect a member’s “essential security interests” in times of “war or other emergency in international relations”.

Looking into the Travaux Preparatoires

Although it is cautioned that the importance of preparatory materials must not be overestimated,^[6] they do provide us with insight for ascertaining common intent among the negotiators, albeit limited. Hence, it is not surprising that the preparatory materials surrounding ‘security’ were quoted extensively by the Panel in Russia – Traffic in Transit.

The delegate from the Netherlands, Dr. Antonius Bernadus Speekenbrink (Ministry of Economic Affairs, Netherlands),raised queries at the Preparatory Commission’s meeting about the meaning of “essential security interests” and “emergency in international relations” within the draft Article.^[7] The original language of the draft Article was contained in the American draft version; Mr. John Marshall Leddy (U.S. State Department), as the American delegate, provided insight into the language of the draft. Leddy explained that it was recognized that the scope of the exception could neither be too wide nor too narrow. Either route would lead to undesirable results. As far as subparagraph (e) of the Draft Charter’s provision was concerned, the limitation was primarily in the time at which the exception is invoked. It was believed that no Member would question another Member’s needs during times of war and the security measures taken to protect its interests. When it came to the phrase “or other emergency in international relations,” Leddy explained:

“As to the second provision, “or other emergency in international relations,” we had in mind particularly the situation which existed before the last war, before our own participation in the last war, which was not until the end of 1941. War had been going on for two years in Europe and, 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.

…

We cannot make it too tight, because we cannot prohibit measures which are needed purely for security reasons. On the other hand, we cannot make it so broad that, under the guise of security, countries will put on measures which really have a commercial purpose.”^[8] (emphasis supplied)

The views of Leddy on what could constitute ‘security’ under the provision were also reflected by the rest of the members in the meeting inasmuch that it was the right of a member nation to choose its security interests. Disagreements within the Preparatory Committee were with regard to the relationship between the security exceptions and the general exceptions. In the New York Draft, both sets of exceptions were included under the same provision, but security exceptions were later relocated to a separate provision of their own.^[9] There was also discussion within the Preparatory Committee about the self-judging nature of the security exceptions. This is something the Panel in Russia – Traffic in Transit discussed elaborately and relied upon before making its final ruling on the nature of security exceptions.^[10] With this contextual background to the relevant provisions of the GATT, the authors now turn their attention to discussing the Panel’s decision in Russia – Traffic in Transit before moving to analyse the same.

Russia – Traffic in Transit

The Russia – Traffic in Transit was the first dispute wherein the security exception under the GATT was invoked before the WTO adjudicating authorities. It was invoked by Russia in response to Ukraine’s complaint that restrictions had been imposed on goods being transported through Russia. In brief, Ukraine’s complaint was against four measures of Russia which imposed restrictions on the movement of goods by road or rail from Ukraine to Kazakhstan, Kyrgyz Republic and other countries.

With respect to the operation of the security exception, Ukraine contended that there are three steps in an inquiry to be conducted by the Panel, in the following manner:

1. Whether the measure at dispute was “taken in time of war or other emergency in international relations.”
2. Whether the measure at dispute was an action “for the protection of its essential security interests.”
3. Whether the measure at dispute was necessary to reach the stated objective.

It was also contended that unless a member satisfies the Panel at all three stages of inquiry, there cannot be a successful defence under Art. XXI.

On the other hand, Russia contended that under the security exceptions, a Member determines for itself its essential security interests and what action is necessary for the protection of such security interests.^[11] Therefore, Russia argued that the Panel would have to limit its findings only to the extent that Russia has invoked the security exceptions “without engaging in any further exercise.”

Taking note of the arguments made, and considering that this was the first dispute involving the security exception before the WTO dispute settlement system, the Panel Report found that there was discretion afforded to the Member invoking the security exceptions. However this invocation could not act as “an incantation that shields a challenged measure from all scrutiny”.^[12] The Panel divided the inquiry under Art. XXI into three parts in the following manner:

1. A member must make an objective demonstration that the measure at dispute can attract one of the exemptions under XXI(b);
2. A member must then convey to the Panel what essential security interest is being attained through the measure at dispute; and
3. A member must ultimately satisfy the Panel that the measure at dispute and the security interest have a justifiable nexus.

The Panel’s formulation leaves to the discretion of the Member invoking the security exemption the ‘necessity test’ of the measure.^[13]

While articulating their formulation of ‘essential security interests’, the Panel equated ‘security interests’ of a state to its ‘quintessential functions’ of protection of territory and population from external threats and maintenance of internal law and order. The Panel concluded that ‘essential security interests’ would constitute a narrower category than ‘security interests’. The Panel elaborated that exact internal and external threats would vary based on circumstances and “perceptions” of each state. The Panel went on to caution members against ‘elevating’ or disguising trade concerns as security interests. The Panel held that the members must act in good faith and not misuse the exceptions under the GATT. Relying on this, the Panel said that the invoking member must articulate their essential security interests.^[14] Through this finding, the Panel made clear that it believes that Article XXI(b)(iii) of the GATT is not totally “self-judging” to the extent argued by the Russian side. Thus, members seeking to evade the jurisdiction of the WTO could not do so by relying on the interpretation of Article XXI(b)(iii) as totally “self-judging” in nature.^[15]

Analysis

The Panel in Russia – Traffic in Transit set the trend for adjudicating security issues before the WTO dispute settlement bodies. The Panel also removed all assumptions that a mere invocation of the security exceptions, on grounds of them being totally “self-judging” in nature, could prevent a panel’s jurisdiction over the dispute. What is interesting is the Panel’s understanding of how much discretion a member may exercise over their security interests. By requiring members to articulate their security interests and demonstrate that the measure is justifiable in light of such interest, the Panel has significantly curtailed discretion which (up until now) members assumed they enjoyed. It is also important to note that the United States, in their third-party submissions, sided with Russia. It argued against a Panel having jurisdiction over a dispute involving a sensitive political question of security interests. It is important to note USA’s objection because it was the American version of the security exceptions which had reached the New York Draft charter, and it was this version which had the most likeness to the present-day form of the security exceptions. It is also important to note that it is the USA that is currently blocking the Appellate Body’s formation.

While the USA has been generally complaining of overreaching by the Appellate, this Panel Report can be seen as another example of similar overreaching by a Panel wherein members are subjected to the ‘objectivity’ of a Panel over questions of security. The Panel also ignored examples of international jurisprudence on self-judging clauses to reach their conclusion. In a consensual dispute settlement system, members must have the opportunity to avail exceptions which are entirely self-judging. This is not only to uphold the multilateralism which prevailed when the agreements were drafted but also to sustain the adjudicatory system. Compulsory systems of dispute settlement must provide space for a self-judging exception especially when it relates to issues as sensitive as state security.^[16] The authors recognise that there have been certain arguments made in favour of reasonable legal boundaries on self-judging provisions such as the one in this case.^[17] However, it is argued that any such theoretical overreach, stemming not from member states’ intentions but academic or judicial interpretations, will only further debilitate members’ trust in an institution already facing a severe crisis, i.e., the Appellate Body crisis.

The Panel’s formulation of security as being dependent upon the perceptions of each member could be gleaned from the negotiator’s meeting and the language of the provision itself. Where the Panel deviated from members’ expectations was by requiring demonstrations and articulation before them, which nullifies the effect of having a subjective exception in the first place. Such an interpretation falls afoul of the general rule of interpretation of treaties found in Article 31 of the Vienna Convention on the Law of Treaties. This is both from a plain text perspective as well as a travaux perspective. It is hoped that a future Panel rectifies this mismatch by bringing the ‘Russia – Traffic in Transit’ Panel interpretation closer to what was expected by negotiators representing member states at the time of entering into the GATT.

Conclusion

There are quite a few disputes pending before the WTO where members have invoked the security exceptions. The third-party submissions of the USA in the ‘Russia – Traffic in Transit’ dispute must be appreciated in light of the USA relying on the self-judging interpretation of the exception in one set of disputes involving the USA as respondent over steel and aluminium tariffs.^[18] There was another set of disputes involving Qatar and Saudi Arabia over broadcasting and intellectual property rights which has since been abandoned due to the Al-Ula Declaration.^[19] South Korea had also instituted a case over Japanese restrictions on exports where a Panel had been established but not yet composed.^[20] It remains to be seen if future Panels continue to develop the branch of jurisprudence started by the Panel in Russia – Traffic in Transit and whether this development shall continue straying further from what is discussed in the GATT’s travaux. It would go a long way in bolstering members’ confidence in the WTO to respect their intentions as reflected in the travaux, as opposed to developing the law by judicial development with no grounding in their intentions.

^[1] Dapo Akande & Sope Williams, ‘International Adjudication on National Security Issues: What Role for the WTO’ (2003) 43 Virginia Journal of International Law 365.

^[2] Established by WTO Agreement: Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, 1867 U.N.T.S. 154, 33 I.L.M. 1144 (1994).

^[3] General Agreement on Tariffs and Trade preamble, art. XX and art. XXI, 1994 (GATT 1994), 1867 U.N.T.S. 187 [hereinafter GATT 1994].

^[4] Nigel D. White & Auden Davies-Bright, ‘The Concept of Security in International Law,’in Robin Geiß and Nils Melzer (eds), The Oxford Handbook of the International Law of Global Security (OUP 2021) 19-26.

^[5] Arnold Wolfers, ‘“National Security” as an Ambiguous Symbol (1952)’, in David A Baldwin (ed), Theories of International Relations (1st ed. 2008) 481-502.

^[6] Isabelle Van Damme, Treaty Interpretation by the WTO Appellate Body (OUP 2009) 309, 313.

^[7] Report of the Drafting Committee of the Preparatory Committee of the United Nations Conference on Trade and Employment, E/PC/T/34, pp. 31-32.

^[8] Comm. A., Preparatory Committee, United Nations Conference on Trade and Employment, 2nd Sess., 33rd mtg. at 20-21, GATT Doc. E/PC/T/A/PV/33 (24th July 1947).

^[9] ibid.

^[10] Panel Report, Russia – Measures Concerning Traffic in Transit, WTO Doc. WT/DS512/R (adopted April 26, 2019) [hereinafter Panel Report Russia Traffic or Russia – Traffic in Transit].

^[11] ibid 30-31.

^[12] ibid 50.

^[13] ibid [7.5.6].

^[14] ibid [7.130]-[7.134].

^[15] ibid [7.102]-[7.104].

^[16] Gerlado Vidigal, ‘WTO Adjudication and the Security Exception: Something Old, Something New, Something Borrowed – Something Blue?’ (2019) 46(3) Legal Issues of Economic Integration 203.

^[17] Stuart Davis, ‘Inherent Limits to the World Trade Organization’s Article XXI Self-Judging Security Exception’ 34 (2020) Maryland Journal of International Law 364.

^[18] WT/DS544, WT/DS547, WT/DS548, WT/DS552, WT/DS554, WT/556 and WT/DS564.

^[19] Andrew Mills, ‘Qatar, Saudi Arabia halt WTO efforts to resolve piracy broadcast dispute,’(Reuters, 11 January 2022) <https://www.reuters.com/world/middle-east/qatar-saudi-arabia-halt-wto-efforts-resolve-piracy-broadcast-dispute-2022-01-10/&gt;.

^[20] WT/DS590.