The Security Exception In International Trade Law:Challenges And Solutions

The security exception was incorporated into the multilateral trading system so that a rulesbased trade and economic relationship would not sacrifice the parties’ right to take precautions when their respective security was or could be in jeopardy.The success of this bargain depends chiefly on whether it is realistic to maintain a balance between the protection of security concerns and the enforcement of trade rules so as to ensure that the rights and obligations of Members are upheld.This thesis presents a thorough analysis of the legal issues that come along with the incorporation of the security exception into the multilateral trading system.The analysis assesses the legal texts of the security exception and reviews actual cases where the exception has been invoked.This task is undertaken in a quest to ascertain whether there are genuine grounds to question the value of the security exception from a theoretical perspective and the operation of this exception from a practical standpoint.Based on the result of that analysis,this thesis then puts forward possible solutions to the problems identified and,additionally,considers the mechanics of how best to put them into effect.Essentially,the security exception is framed so as to grant WTO Members the prerogatives to protect themselves when their essential security interests are involved.At its simplest,it allows Members to withhold ’essential information’ but,more broadly,it authorizes Members to derogate from basic trade rules to protect themselves in relation to fissionable materials or traffic in arms,or in time of war or other emergency in international relation.Lastly,the security exception ensures that nothing in the WTO prevents Members from taking actions to fulfill their United Nations obligations regarding international peace and security.While it is fair to say that Members enjoy some flexibility to act when their security is at stake there is no direct indication of the meaning of the "essential security interest" Consequently,Members could hide behind this opacity and invoke the exception in obscure instances.The WTO system however has never had to worry about what "essential security interests"could entail nor does it have to envision the wider impacts of the actions taken to protect what one could consider "essential security interests".Since the 1996 US-Helms Burton case(DS38),Members had long tacitly agreed not to invoke this exception.The tacit agreement was broken in YEAR when Russian security measures were challenged before the WTO dispute settlement system in the Russia-Traffic in Transit case(DS512).Since then,the security exception has been invoked at a rate never seen since the establishment of the WTO in 1995 nor the inception of GATT in 1947.The fundamental problem is that this new development puts the efficiency and the survival of the Organization at stake.The main issues that sustain this state of affairs revolve around whether the security exception is justiciable,what are the consequences if the exception is not justiciable,and what can be considered the scope of essential security interests,or a threat to those interests,for the purpose of trade rules.This thesis considers that the drafters of the security exception did not establish a legal text that could unequivocally dispel these concerns at the outset.Differently put,the text of the security exception does not clarify critical issues that can undermine the efficiency of the trading system.The thesis come to this finding by contrasting the different aspects of security as a concept with core principles of the multilateral trading system,and then applying the different aspects of each to the legal text in order to ascertain their availability and sustainability.The establishment of the Organization in 1995 provided the ideal opportunity to remedy these critical issues that can undermine the trading system.The provision can be traced back to GATT 1947,the predecessor of the Organization.This is to say,the critical issues were transported from the GATT 1947 period into the WTO era without elaboration.Some of the early literature has argued that the opacity surrounding the security exception can provide an incentive to settle security-driven disputes less formally without adjudication.However,this argument is only true as long as Members exercise restraint in submitting security-related disputes to the WTO dispute settlement system,which they no longer do.Given that new trend,the problems inherent in the security exception are bound to become acute especially when the "dispute settlement system"-"jewel" starts slipping away from the "WTO"-"crown."The WTO dispute settlement system is tasked to deal with complex substantive issues.This has inflicted deep scratches on the so-called "jewel in the crown.”But the scratches may become cracks in the system if the critical issues regarding the security exception are left unresolved.Indeed,the uncertainty of the exception is now a factor that drives the current trend to initiate security exception cases.In other words,the uncertainty of the security exception,once a virtue,has now become a vice.Hence,this thesis further argues that the flood of security exception cases brought before the WTO dispute settlement system could have been avoided if the drafters had laid down clearly the substance of the exception.This finding was reached after conducting an analysis of the justification behind the invocations of the exception and the nature of the actions taken by Members on that basis.The problems attached to the lack of clarity regarding the legal text of the security exception are discussed throughout this thesis.Overall,this research on the security exception during this new development at the multilateral rules-based trading system came up with some critical findings-summarizing the deriving challenges regarding the incorporation of the security exception into the international trading system.The thesis founds that the unresolved question of the justiciability of the exception that were transported into the WTO era that is supported by a compulsory dispute settlement system puts the system in an uncomfortable position.The research demonstrates that the question regarding the justiciability of the security exception is not equally addressed across the WTO system,at least from a nullification or impairment non-violation claim.The thesis also demonstrates that this state of affair has implications for novel security exception provision,potentially the exception in Trade-Related Aspects on E-Commerce,or future Agreement negotiated under the auspices of the WTO.As regards the application of the exception,the thesis found that the scope of the ’essential security interests’’ is limitless.The research understands that there are some instances where the actions taken pursuant the protection of one essential security interests can be available concurrently under the exception and existing rules in other Agreements.Yet,Members would invoke the exception instead,chiefly based on the wider protection granted by the exception.This on contestation over the role of the ’jewel in the crown."The thesis notices that an obscure substantive rule that is allegedly essential to Members but interpreted by a dispute settlement system that is under pressure because of its interpretative function could be perceived as menacing by Members individually.However,the multilateral rules-based system could be at stake if there is no restriction regarding the invocation and application of the exception.The effectiveness and sustainability of the international trading system is at stake.And the significance of this research could not be higher.Therefore,the thesis examines some perspectives to tackle the challenges identified.Precisely,through exploration of novel security exception texts in recent FTAs,drawing lessons from practice,and digging into the reservoir of the multilateral agreements,this thesis developed a strategy in order to anticipate further disputes regarding the security exception.The thesis postulates that the option in FTAs not to challenge the invocation of the exception could be adopted at the multilateral level.However,in order to reach that outcome,there are several prerequisites that need to be satisfied.Primarily,the thesis proposes that actions against security concerns that are already available under existing rules should be withdrawn from the scope of application of the exception.Ultimately,the scope of the security exception can be expanded to cover novel concerns that are not yet available at the multilateral text,but present in several FTAs.Further,the thesis proposes to upgrade the role of the WTO Councils,be they in trade in goods,trade in services,or TRIPS,so as to make them a forum for the invocation of a security exception.Drawing inspiration from the TBT Agreement,especially Articles 2.10 and 5.7,and Article XIV bis of GATS,the thesis conceives of requirements that Members could satisfy upon the invocation of the exception.Briefly,Article 2.10 of the TBT Agreement provides that upon adoption of technical regulation,Members should notify immediately the particular measures,supplemented with a description of the rationale behind their problems with the urgent nature of the issues.It also provides that the imposing Members should be willing to receive written comments and take them into accounts.These requirements can be adopted,synthesized and adapted to the invocation of the security exception.And the Councils can be called upon to oversee this task.In fact,one Council is already mandated to monitor security exception cases.Paragraph 2 of Article XIV-bis of GATS provides that "the Council for Trade in Services shall be informed to the fullest extent possible of measures taken under paragraphs 1(b)and 1(c)and of their termination."Accordingly,this proposal expands this model and reinforces it,giving the Councils more tools to tackle the issues regarding the security exception.