Interpreting Essential Security Exceptions in WTO Law in View of Economic Security Interests

Abstract

After the invocation of security exceptions became more common, the first panel report ever on how to apply them has recently been issued in the Russia—Measures Concerning Traffic in Transit case. While this panel addressed the application of the security exception in a situation of threat to international peace and security, the question must be raised whether its approach also applies to the invocation of security exceptions for economic reasons. In this context, the present chapter focuses on the methodical preliminaries to applying security exceptions: Its application in WTO dispute settlement does not only prompt the question of the jurisdiction of WTO panels and the Appellate Body, but also pertains to the issues of standard of proof and standard of review. A related methodical issue concerns the feasibility of the expansive interpretive approach applied to the general exceptions to the security exception. Reading it in the same tune runs the risk of nullifying the concept of multilateral trade regulation altogether, even more so as the security exceptions miss the usual safeguard against abuse, i.e. the requirements of the general exceptions’ chapeau. The lack of such safety valve confirms that security exceptions are of a different character compared to other exceptions. This difference, however, may be difficult to maintain if security exceptions are also used to defend economic security interests. Finally, the application of security exceptions may—as debated with regard to other WTO exceptions—be subject to an inherent limitation against exterritorial application, which would restrain its scope of application in cases in which security measures against a third country intend to affect also the trade of WTO Members, and could become relevant in assessing US sanctions against Iran.