The United States’ First Submission for United States-Certain Measures on Steel and Aluminum Products is out. Similar to its third-party submissions in the Russia-Traffic in Transit dispute, the United States argues the drafting history of the International Trade Organization (ITO) supports an understanding that Article XXI GATT is, and has always been meant to be, “explicitly” self-judging. The U.S. declares, “[t]his has been the consistently expressed view of the United States for more than 70 years.” (U.S. First Submission, para. 2). Elsewhere, I explain why the U.S. history on this subject is complicated, and not as consistent as suggested. The U.S. also offers a new argument since the Russia-Traffic in Transit dispute - that the makers of the exception believed the only appropriate recourse was non-violation nullification or impairment claims by those members affected by measures taken under the security exception.
This post is limited to consideration of a bulleted list of statements meant to confirm that the exception was purely self-judging (U.S. First Submission, para. 169):
* In a July 1947 meeting, the U.S. delegate observed that in situations such as times of war, “no one would question the need of a Member, or the right of a Member, to take action relating to its security interests and to determine for itself—which I think we cannot deny—what its security interests are.
* In the same meeting, the Chairman stated “in defence of the text,” that, when the ITO was in operation, “the atmosphere inside the ITO will be the only efficient guarantee against abuses” of the essential security exception. 211
* A November 1947 summary of the draft ITO charter states that the essential security exceptions would permit members to do “whatever they think necessary to protect their essential security interests relating to” the circumstances presented in that provision. 212
* In January 1948, a representative from India “expressed some doubt” about whether “the bona fides of an action allegedly coming within [the essential security exception] could be questioned.” 213
* Also in January 1948, the ITO charter negotiators declined to incorporate an explicit reference to nullification or impairment into the essential security provision. 214 As the United States noted at the time, a reference to nullification or impairment in the essential security provision was “unnecessary” in light of the existing text. 215
* Around the same time, a Working Party of ITO negotiators decided to retain the nonviolation provision based on their conclusions that essential security actions “would be entirely consistent with the Charter, but might nevertheless result in the nullification or impairment of benefits accruing to other Members,” and that “[s]uch other Members should, under those circumstances, have the right to bring the matter before the Organization, not on the ground that the measure taken was inconsistent with the Charter, but on the ground that the measure so taken effectively nullified benefits accruing to the complaining Member.”
The goal of this post is to expand and comment on the context of the historical references made by the U.S. I think the question now is whether it appears that the drafters of the ITO Charter/GATT believed that the availability of non-violation nullification or impairment claims meant the exception was never subject to review to determine whether an action was of the type mentioned in the security exception. Moving forward, with the language of the exception the same, but the WTO quite different from the intended ITO, do we – or should we – still think the same way? As Nicolas Lamp asks: Is the nullification or impairment of benefits what really matters?
First bullet:
This quote was later corrected in the verbatim report. When asked the meaning of the phrase “In time of war or other emergency in international relations,” John Leddy of the U.S. delegation replied that in time of war, “I think no one would question the need of a Member, or the right of a Member, to take action relating to its security interests in time of war and to determine for itself– which I think we cannot deny – what its security interests are.” The corrigendum to the verbatim report clarified a crucial caveat to Leddy’s words, which I underlined: “in time of war.” Moreover, Leddy emphasized “the limitation I think, is primarily in the time.” E/PC/T/A/PV/33/Corr.3.
Leddy continued: “As to the second provision, “or other emergency in international relations,” we had in mind particularly the situation which existed before the last war, before our own participation in the last war, which was not until the end of 1941.” He goes on to explain: “It is really a question of balance. We have got to have some exceptions. We cannot make it too tight, because we cannot prohibit measures which are needed purely for security reasons. On the other hand, we cannot make it so broad that, under the guise of security, countries will put on measures which really have a commercial purpose.” E/PC/T/A/PV/33 at 20.
It also bears mention that Leddy had explained that the U.S. negotiators “thought it well to draft provisions which would take care of real security interests and, at the same time, so far as we could, to limit the exception so as to prevent the adoption of protection for maintaining industries under every conceivable circumstance.” E/PC/T/A/PV/Corr.3 [emphasis mine].
Second bullet:
Erik Colban, Chairman of the Committee, observed: “when the ITO is in operation I think the atmosphere inside the ITO will be the only efficient guarantee against abuses of the kind to which the Netherlands Delegate has drawn our attention.” E/PC/T/A/PV/33 at 21. The U.S. argues this reference meant the Members would “police each other’s use of the essential security through a culture of self-restraint.” (U.S. First Submission, para. 66). I will note that Colban’s remarks do not suggest non-reviewability. Drawing from Robert Hudec and Andrew Lang, the reference to “atmosphere” signals how the delegations recognized the need to embed diplomacy within the institution for the embryonic dispute settlement mechanism. However, “atmosphere” may not be an alternative to a review via the ITO dispute settlement procedure. Rather, the “atmosphere” was an assumed aspect of the structure that supported the formal process. I did not see it as a sign that the ITO bodies (the Executive Board or Conference of Members) could never review the legality of the measure.
Third bullet:
The informal summary of the draft ITO Charter (November 1947) certainly seems to accord significant deference to the Members to determine what they believe is “necessary” in taking security actions. I remain cautious that this single summary does not evidence that the exception is self-judging in nature and non-justiciable. A few pages before this quote, the summary explains that “the Preparatory Committee gave only a limited time to the study [of the Settlement of Differences – Interpretation chapter] and that a full re-examination by the World Trade Conference will be desirable.” Moreover, there is no specific exclusion of the general exception from the scope of the dispute settlement mechanism. A final observation is that the summary was designed “for the non-technical reader” and “does not claim to deal with every aspect of every Article of this highly complex document.” E/Conf.2/Inf.8.
Fourth bullet:
In January 1948, the UK delegation submitted an amended draft security exception. Sub-committee I (Article 94) was composed to review it, and there were nine meetings held (eight meeting notes were found by the WTO library). In the fourth meeting, there was elaboration of the UK draft Article 94(2):
If any action taken by a Member under paragraph 1 of this Article nullifies or impairs any benefit accruing to another Member directly or indirectly the procedure set forth in Chapter VIII of this Charter shall apply and the Organization may authorize such other Member to suspend the application to the Member taking the action of such obligations or concessions under or pursuant to this Charter as the Conference deems appropriate; provided that where the action is taken under paragraph 1(d) of this Article the procedure set forth in Chapter VIII of this Charter shall not apply until the United Nations has made recommendations on or otherwise disposed of the matter.
The draft proposed stemmed from the UK desire to confirm applicability of the nullification or impairment procedure (then Articles 89, 90 of the Charter) to the security exception. Later in the discussion, the UK delegation explained it would be satisfied if “the applicability of Articles 89 and 90 [were] written into the record rather than incorporated in the actual text of Article 94.” The UK delegation also confirmed there was no desire to “exclude the ITO from participation in the ultimate solution of a matter after the United Nations had acted.”
The U.S. delegation offered a preliminary opinion that Article 94(2) was “unnecessary” because “the [language was] in effect [] a repetition of paragraph (b) of Article 89 [the dispute settlement procedure that would apply, regardless of whether or not a measure conflicts with the provisions of the ITO Charter].” There is no further confirmation from the U.S. that their comment on the UK draft confirmed or denied the possibility of review of security-related actions, whether as a violation or a non-violation of the Charter. The emphasis on “unnecessary” may not signal the exception was self-judging. The UK draft was just repetitive. This was not the first time the U.S. refused to tie a provision to the dispute resolution procedure; and the reason was the same as cited here: there was no need to repeat the dispute resolution procedure in every area of the Charter. E/Conf.2/C.6/W.60.
Fifth bullet:
In the same fourth meeting of Sub-Committee I (Article 94), the Indian representative “expressed some doubt” as to whether under the UK’s draft Article 94(2) “the bona fides of an action allegedly coming within Article 94 could be questioned and also whether such an action could be countered collectively by Members of the Organization or only by affected Members individually.” While agreeing to consider the text, the Indian delegation added that it was their understanding that the “intention” of the UK proposed draft was to confirm that “counteraction” was limited to “compensatory action” and not “punitive action.” Yet, it is unclear whether the Indian position was that there should be review of the security exception and the UK draft failed to guarantee that, or whether there the security exception should be purely self-judging in nature. E.Conf.2/C.6/W.60.
The next meeting only confirmed agreement to create a new provision from Article 94(1)(d) and (2) in a new Article “Relations with the United Nations,” and further discussion on measures brought before the United Nations as directly related to political matters.
There was also a bit more to the story in Sub-Committee I. In the first meeting, the Indian delegation had argued for the expansion of the exception to cover all “essential national interests.” E/Conf.2/c.6/w.26. The Indian delegation explained in the second committee meeting that the delegations should “reach some understanding on the applicability of Articles 89 and 90 [the dispute settlement procedure] to action represented as falling within Article 94.” The Indian delegation continued:
If such action is subject to the procedures of Articles 89 and 90 it would be open to other Members or to the Organization to inquire into the purpose for which the action was taken and, accordingly, to take or authorize counter action if at the time it appeared that the provisions of Article 94 were being abused. The knowledge of the possibility of such counter action would serve as a deterrent to any misuse of the exceptions.” E/Conf.2/c.6/w.32.
In the third meeting the committee accommodated the Indian delegations’ concerns for essential security interests and would suggest that another appropriate committee (tasked with reviewing the commercial policy chapter) consider an exception for actions “necessary for the maintenance of ‘public order or safety’ (this was for Article 43 of the draft Charter which later became Article XX of the GATT). E/Conf.2/c.6/w.40.
The report of the third meeting also provides that “some” delegations believed “that action taken under Article 94 could not be prevented, or questioned, under other articles, but that the effects of that action might be the subject of consultation or complaint, and that a member affected by such action might accordingly seek release from some corresponding obligations.” E/conf.2/c.6/w.40. The meeting closed without further comment, and this question was not picked up again in the materials I was able to review. Other committees did address the relationship between Article 89, 90 and 94, particularly two sub-committees tasked with reviewing the organization and dispute settlement provisions (Sub-Committee G of Committee VI (Organization) and Sub-Committee on Chapter VIII (Settlement of Differences – Interpretation, respectively). Sub-Committee G is the subject of the final bulleted statement.
Sixth bullet:
Sub-committee G of Committee VI (Organization) was tasked with considering the relationship between the draft Charter’s nullification or impairment procedure (Article 89) and the invocation of the security exception. E/Conf.2/C.6/W.30. The report confirmed the committee decision to retain Article 89(b), which permitted non-violation complaints of nullification or impairment. They reported the procedure “would apply to the situation of action taken by a Member[,] such as action pursuant to Article 94 of the Charter.” Sub-committee G confirmed that:
Such action, for example, in the interest of national security in time of war or other international emergency would be entirely consistent with the Charter, but might nevertheless result in the nullification or impairment of benefits accruing to other Members. Such other Members should, under those circumstances, have the right to bring the matter before the Organization, not on the ground that the measures taken was inconsistent with the Charter, but on the ground that the measure so taken effectively nullified benefits accruing to the complaining Member.
Like the other committee described above, sub-committee G focused on the “effects” of Members’ actions to explain recourse to the nullification or impairment procedure. However, the final report of Sub-committee G does not explicitly preclude review of the invocation of the exception.
On a final note, little attention has been paid to the fact that the New York draft Charter made clear that interpretation of the security-related exceptions (then Article 37(c), (d), (e), or (k) or of Article 59(2)) were justiciable. It was also in this limited instance where a Member could directly bring a dispute to the International Court of Justice, rather than first seek a ruling of the Executive Board. This reference was removed in the Geneva draft. However, this may not signal a change in heart. One reading of this is that the delegations had by then worked towards the nullification or impairment procedure, with the phrase “justiciable issue” now gone. (See Seymour Rubin, Judicial Review Problem in the International Trade Organization 63 Harv. L. Rev. 78, 90). A further clue as to why the Geneva text lacked explicit reference to the security-related exceptions within the disputes procedure can be found in a delegates’ meeting in Geneva in 1947. There, Leddy spoke on July 24, 2017 to respond to other delegations’ efforts to amend the security exception (Article 94) to confirm explicit access to the nullification or impairment procedure. Leddy confirmed that the nullification or impairment procedure automatically applied to the entire Charter, and did not require an “addition of a note emphasizing what is clear from the text.” E/PC/T/A/PV/33.Corr.3.
