On April 5, 2019, a World Trade Organization (WTO) dispute settlement panel issued a landmark ruling in a dispute between Russia and Ukraine in which Russia claimed it had taken trade-restrictive measures for the purpose of protecting its national security. Central to the dispute was the so-called “national security exception,” which allows WTO members to breach their WTO obligations for purposes of national security. In the Russia-Ukraine dispute, Russia invoked the exception to justify measures that blocked trade between Ukraine, Kazakhstan, and the Kyrgyz Republic that transited through Russia. Russia claimed it had adopted those measures in response to escalating events in Ukraine after political turmoil there in 2014.
Q1: Why does this dispute matter for the United States and the WTO overall?
A1: The United States has invoked the WTO national security exception, laid out in Article XXI of the General Agreement on Tariffs and Trade (GATT), to justify its tariffs on steel and aluminum. The European Union, Turkey, Switzerland, Russia, Norway, Mexico, Canada, India, and China have filed disputes against the United States at the WTO and claim that there is no legitimate or plausible national security rationale for the tariffs. The Trump administration, however, has an ironclad view that measures taken by members for the purposes of national security cannot be reviewed by a WTO dispute settlement panel. In fact, the Trump administration sided with Russia in the complaint brought by Ukraine for the same reason, despite backing Ukraine in the conflict there. The outcome of the Russia-Ukraine dispute offers a glimpse into how future WTO panels could handle other disputes involving the Article XXI national security exception, including the U.S. steel and aluminum tariffs. Observers of the WTO have long seen a dispute over Article XXI as a lose-lose proposition. There is concern that a ruling upholding the U.S. view of the national security exception could inspire other countries to impose protectionist measures in the name of national security, while a ruling that limits a country’s ability to use the exception could be seen an unacceptable breach of national sovereignty, which would discredit the WTO and perhaps lead members such as the United States to withdraw from the body.