At today's DSB meeting, the U.S. - Origin Marking Requirement (DS597) dispute was on the agenda. This dispute involves a complaint by Hong Kong against various U.S. measures requiring that goods produced in Hong Kong must be marked to indicate that their origin is "China." Hong Kong made claims under the GATT, the Rules of Origin Agreement, and the TBT Agreement. At the meeting, the U.S. invoked the GATT Article XXI national security exception as follows:
• The United States regrets that Hong Kong, China, has chosen to move forward with a request for panel establishment.
• In the U.S. reply to Hong Kong, China’s consultation request, the United States made clear that the Executive Order identified by Hong Kong, China, suspended the application of section 201(a) of the United States-Hong Kong Policy Act of 1992 to section 1304 of title 19 of the United States Code. The Executive Order further determined that the situation with respect to Hong Kong, China, constitutes a threat to the national security of the United States.
• The clear and unequivocal U.S. position, for over 70 years, is that issues of national security are not matters appropriate for adjudication in the WTO dispute settlement system. We therefore do not understand the purpose of this request for panel establishment, seeking WTO findings that the United States has breached certain WTO provisions. The WTO cannot, consistent with Article XXI of the General Agreement on Tariffs and Trade 1994, consider those claims or make the requested findings.
• No WTO Member can be surprised by this view. For decades, the United States has consistently held the position that actions taken pursuant to Article XXI are not subject to review in GATT or WTO dispute settlement. Each sovereign has the power to decide, for itself, what actions are essential to its security, as is reflected in the text of GATT 1994 Article XXI.
• Infringing on a Member’s right to determine, for itself, what is in its own essential security interests would run exactly contrary to the efforts to revitalize and reform the WTO that are necessary to ensure that it lives up to its potential.
• There is no basis for a WTO panel to review the claims of breach raised by Hong Kong, China. Nor is there any basis for a WTO panel to review the invocation of Article XXI by the United States. We therefore do not see any reason for this matter to proceed further.
Given its prior invocations of, and stated position on, GATT Article XXI, today's statement isn't too surprising. But what's intriguing here is the apparent U.S. position that Article XXI can apply to non-GATT goods agreements. Hong Kong's complaint included claims under the Rules of Origin Agreement and the TBT Agreement. Is the U.S. really saying that Article XXI applies beyond the GATT?
If they are, I'm fine with that. I have been making a lonely case that GATT Article XX should apply to non-GATT goods agreements, based on the logic that the non-GATT goods agreements are all derived from some part of the GATT, so it makes sense that the GATT exceptions should apply. But no one seems convinced.
Is it possible that USTR sees it the same way I do? Or would they distinguish Article XXI from Article XX? Or perhaps they didn't really mean what they seemed to be saying today to be taken to its logical conclusion? Not that there's any hope of this happening, but maybe some Congressional staffer reading this post can ask Katherine Tai about this on Thursday!
