41. The Black Hole of National Security: Striking the Right Balance for the National Security Exception in International Trade
- Author:
- James Bacchus
- Publication Date:
- 11-2022
- Content Type:
- Policy Brief
- Institution:
- The Cato Institute
- Abstract:
- Article XXI of the General Agreement on Tariffs and Trade (GATT) reserves for members of the World Trade Organization (WTO) the legal authority to restrict trade in goods to protect members’ “essential” security interests. Similar exceptions to WTO trade obligations exist in other WTO agreements. For more than seven decades, WTO members exercised self‐restraint in invoking these exceptions, doing so only for narrow purposes and in truly exceptional circumstances to avoid pushing the boundaries of the law too far and thereby upending the delicate balance between members’ legitimate pursuit of their security interests and their obligations to reduce barriers to trade. Yet, trade restrictions justified on national security grounds have proliferated in recent years and are increasingly subject to litigation in WTO dispute settlement. As a result, the national security provisions contained within the WTO agreements, as well as fundamental questions about the nexus between trade and national security, are set to be tested and clarified by WTO jurists—a less than ideal outcome that could lead to the further undermining of WTO dispute settlement and the rules‐based international trading system more broadly. This paper explains the origins of the national security exceptions in the GATT and the WTO agreements and the history of their invocation, summarizes recent litigation that has clarified these exceptions, discusses current developments and upcoming litigation that could prove pivotal to our understanding of the trade‐security nexus and the future of the world trading system, and offers some concluding thoughts on the options available to WTO members for striking a balance between trade liberalization and the defense of national security.
- Topic:
- International Trade and Finance, National Security, World Trade Organization, and Tariffs
- Political Geography:
- Global Focus