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1. Introduction
1994 general agreements on tariffs and trade (GATT) legal framework is designed to facilitate its state parties ability to respond to situations beyond international trade (Messerlin, 2005). In situation of emergencies – such as natural disasters, pandemic, financial crisis and war – rules that would apply in normal circumstances cannot always be upheld, especially if the emergency threatened the existence of the State (Garcia-Santaolalla, 2021). GATT facilitates its state parties’ ability to respond to unexpected situation through its “escape clauses,” where conducts that would otherwise be inconsistent with GATT are precluded if acted pursuant to the requirement of the escape clause. This delicate balance between performance of treaty obligation and flexibility to respond to unexpected situation is at the core interest of GATT (Pelc, 2009).
While the escape clause under GATT Article XIX (safeguards) and Article XX (general exception) had developed in the jurisprudence of World Trade Organization (WTO) Dispute Settlement Body (“WTO-DSB”), the security exception contained in Article XXI had not received further discussion. Scholars and WTO member were particularly concerned with the potential misuse and abuse of the article because of the unilateral nature of the article, which reads as follows:
Nothing in this Agreement shall be construed
[…]
(b) to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests:
(i) relating to fissionable materials or the materials from which they are derived;
(ii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment;
(iii) taken in time of war or other emergency in international relations; […].
The provisions above stipulate that if a state party considers its security interests to be threatened, it may take action that would otherwise be inconsistent with its GATT obligations to protect its essential security interests. Article XXI(b) is categorized as a self-judging clause because it contains the adjectival clause “which it considers” (Schill and Briese, 2009). In other words, the article takes into account the State’s subjective determination as its requirement. Debate and discussion among scholars and WTO member were primarily concerned with the...