“WTO Security Exceptions: A Sliding Scale Approach to Protect the Rules- Based System for Global Free Trade” | Article by Dr. T S Somashekar & Kanchan Yadav

NLS faculty member Dr. T.S. Somashekar has co-authored an article titled “WTO Security Exceptions: A Sliding Scale Approach to Protect the Rules- Based System for Global Free Trade,” which has been published in Aarthika Charche (Volume 7, No 1), FPI Journal of Economics and Governance. It is a research journal published by the Fiscal Policy Institute, Government of Karnataka.

Authors

T.S. Somashekar, Professor of Economics, NLSIU
Kanchan Yadav, Doctoral Research Scholar, NLSIU

Abstract

Since the enforcement of the General Agreement on Tariffs and Trade (GATT) in 1947 and subsequently with the establishment of the World Trade Organization, the global community has been moving towards a more secure and rule-based international trade law regime. The cornerstones of the system are predictability and transparency, which ensure that a state, no matter how powerful, cannot undertake a discriminatory trade measure against another going above and beyond the rules. However, the recent instances of unilateral invocation of the security exceptions found in the various trade agreements endanger the very basis of the WTO system. The very first WTO Panel report that directly dealt with this exception was circulated in the 2019 Russia – Traffic in Transit case, closely followed by the 2020 Saudi Arabia – Protection of IPRs case. The standard of burden of proof applied against the invoking nations in these two cases leaves a giant void, rife for exploitation by more and more nations throughout the world. The already increasing trend of invoking these provisions and implementing the strictest possible trade measures for dubious ‘emergency’ scenarios, as evidenced in the US steel and aluminium tariffs dispute, has the potential of causing a gradual degradation of the rule-based global trade system. Under this backdrop, this paper examines the national security exception provisions, their intent and scope with respect to their negotiating history, their jurisprudential developments in the pre and post WTO era and points out specific gaps in interpretation via the most recent Russia – Traffic in Transit and Saudi Arabia – Protection of IPRs cases. Further, an alternate methodology, a sliding scale system, is proposed for identifying the essentialness of the claimed security interest, to determine the level of burden of proof that may be applied in such disputes to reduce the probability of their abuse. The paper then explains how this methodology would impact on few crucial ongoing disputes involving the security exception provisions. India is a founding-member of WTO and an important beneficiary from the stability of this organisation. The analyses and implications of the WTO security exceptions enforcement, in this paper, are of importance and relevance for the design of India’s international trade policies and formulating a comprehensive approach to security concerns.

The journal is available here.