US Position on GATT Nat'l Security Exemption Untenable, Lawyers Argue

The U.S. interpretation of the General Agreement on Tariffs and Trade's Article XXI(b) -- which governs trade moves made for national security -- as being wholly self-judging "is unsupported by the text, context, object and purpose, and negotiating history" of the article, four Akin Gump lawyers said in a working paper under the auspices of the Geneva Graduate Institute Centre for Trade and Economic Integration.

Following the government's interpretation would give countries license to evade their WTO obligations under the "guise of national security," which is a "clearly undesirable outcome" for all World Trade Organization members, wrote Akin partners Stephen Kho and Yujin McNamara, counsel Sarah Kirwin and associate Brooke Davies. The international trade lawyers discussed the U.S. interpretation of ArticleXI(b) in the context of the government's hobbling of the Appellate Body, making the justifiability of Article XXI(b) a "key sticking point in the negotiations" over the dispute settlement function.

The U.S. adopted a "hard-line position" that the article "must be wholly self-judging and thus non-justiciable under the WTO." The paper said this "heavy-handed position" is clearly in the minority of WTO members and is "concerning" since the U.S. has made it a precondition for further dispute settlement reform talks. This position is "misguided," the paper said, noting the position is incorrect on a "purely factual basis" and will lead other WTO members to adopt the same position, which would, counterintuitively, lead to an "increasingly large loophole" where any member could justify any measure for which they want to avoid WTO review.

Also, sticking by this principle "would run counter to the very principles the United States has defended globally up to this point, i.e., the importance of the rule of law over strongarm tactics, the social and economic benefits of collaboration among the global trading community, and the stability and longevity of the multilateral trading system as a means to negotiate and peacefully resolve economic disagreements," the paper said.