National Security Exceptions in WTO Dispute Settlement

This master’s thesis is devoted to the question whether the traditional dispute settlement process within the WTO is indeed suitable and appropriate for national security disputes or there are more effective ways to settle them. The thesis focuses on Article XXI of the GATT, which became a template for similar security exceptions in other WTO agreements as well as many international treaties. The theoretical and practical significance of the research topic is explained by the more frequent invocation of Article XXI in disputes in the past three years. The ambiguity of the language of Article XXI provoked a large number of discussions about the correct interpretation and application of the security provision. The problems related to interpretation of this provision include the issues of jurisdiction of the WTO dispute settlement body, justiciability, and standard of review under Article XXI. Some scholars and WTO Members claim that Article XXI has a self-judging nature, i.e. a WTO Member itself defines its essential security interests and assesses whether the conditions set forth in Article XXI are complied with. The WTO panel or the Appellate Body is then not able to review the invocation of Article XXI by this Member. Consensus still does not exist among WTO Members about the approach to interpretation of the national security provision. In this thesis, the author reviews the drafting history of Article XXI and historical invocations of Article XXI by GATT Contracting Parties. The thesis further compares three interpretative approaches developed in the literature – subjective, objective and hybrid (bifurcated) approaches. Attention is paid to the panel report in Russia — Measures Concerning Traffic in Transit of 2019, where the panel for the first time had the opportunity to analyse Article XXI. The last chapter of the thesis identifies the problems which arise in the resolution of national security disputes and assesses the viability of alternative options of resolving such disputes, including negotiations, reinterpretation of a national security measure as a safeguard measure under Agreement on Safeguards and non-violation complaints. The author concludes that although these alternatives have advantages, they ignore the crucial question how to prevent the potential abuses of Article XXI. Adjudication of national security disputes through panels and Appellate Body is essential as their interpretations contribute to ensuring the security and predictability of the multilateral trading system.