Thanks to Bryce Baschuk of Bloomberg, who posted the documents on Twitter, we have a letter written by Ukraine to the Chair of the WTO General Council regarding cutting of trade with Russia, and a letter Russia wrote in response. It's the trade response of other countries to the Russian invasion that will be the most economically important here, but nevertheless it is interesting to see the political/legal arguments from Ukraine and Russia.
Here's the main part of the Ukraine letter:
On 24 February 2022 the Russian Federation committed a blatant act of aggression against Ukraine through its unprovoked and unjustified military invasion, an attack on the sovereignty and territorial integrity of Ukraine in a brutal violation of the UN Charter and basic norms and principles of International law.
The ongoing military attacks by the Russian Federation on the Ukrainian territory have already resulted in the immense losses of human lives, including children, with more than a thousand people injured and inflicted severe damages on Ukraine's infrastructure and economy. The international community has categorically condemned the Russian aggression as a grave breach of international law.
Following Russia's invasion, the Government of Ukraine severed its diplomatic relations with the aggressor state, decided to impose a complete economic embargo and no longer apply the WTO agreements in its relations with the Russian Federation. Ukraine considers that these steps are consistent with its national security rights under, inter alia, Article XXI of the GATT 1994, Article XIVbis of the GATS, and Article 73 of the TRIPS Agreement.
We strongly believe that other WTO Members will stand along with Ukraine in countering Russian military invasion by taking similar measures against the aggresor state. We urge all WTO Members to consider further steps with the view to suspending the Russian Federation's participation in the WTO for its violation of the purpose and principles of this Organization.
Pursuant to the GATT Decision concerning Article XXI of the General Agreement of 30 November 1982, Article XIVbis, paragraph 2, of the GATS, and Article 73 of the TRIPS Agreement, I kindly request that you communicate Ukraine's decision to the Council for Trade In Goods, the Council for Trade in Service, the TRIPS Council, as well as to all WTO Members.
And here is the main part of Russia's response:
The Russian Federation notes that Article XIII of the WTO Agree1nent provides for non-application of the Multilateral Trade Agreements between particular Members. However, conditions set out in the said Article only refer to the non-application as between a Member and any other Member if either of the Members, at the time either becomes a Member, does not consent to such application. Therefore, the conditions set out in this Article do not apply to Russia or Ukraine.
We also note that Ukraine relies on Article XXI of the GATT, Article XIVbis of the GATS and Article 73bis of the TRIPS Agreement as a legal basis of its decision not to apply the WTO Agreements in its relations with the Russian Federation.
The so-called Security Exceptions relied upon are relevant in the context of a limited number of the WTO Agreements, namely Article XXI of the GATT is relevant to the matters covered by the GAIT, Article XIVbis of the GATS only applies to the matters covered by the GATS, while Article 73bis of the TRIPS Agreement can only be applied in the context of matters covered by the TRIPS Agreement. Therefore, none of the Security Exceptions relied upon by Ukraine justify non-application of such Multilateral Trade Agreements as ones contained, inter alia, in Annex 2 to the Marrakesh Agreement (namely, Understanding on Rules and Procedures Governing the Settlement of Disputes), Annex 3 to the Marrakesh Agreement (namely, Trade Policy Review Mechanism), or Marrakesh Agreement itself. As the Appellate Body in China - Rare Earths1 noted "neither obligations nor rights may be automatically transposed from one part of the legal fra1nework into another". Moreover, non-application of an international treaty presumes that all of its provisions are not applied, that would presumably include Security Exceptions referred to in Ukraine's communication as a legal basis of its decision, as well.
The WTO is a rules-based trade organization and shall remain such.
The suggestion of Ukraine to suspend the Russian Federation's participation in the WTO equally has no legal ground. Such action is not provided in the WTO Agreement.
The Russian Federation would like to stress that we should refrain from discussing in the WTO, which is a trade related organization, and its bodies issues and events, which are out of the scope of the WTO and are under the focus of other international organizations and diplomatic agencies.
In numerous international fora, the WTO Members repeatedly expressed their commitment to strengthen multilateralism and support rules-based, nondiscriminatory and transparent multilateral trading system (MTS) with the WTO at its core. Russia notes with regret the efforts of certain Members towards politicization of the WTO and fragmentation of the multilateral trading system instead of engaging constructively in a substantive dialogue on the key issues of the global trade agenda. On the contrary, all Members need to combine their efforts to improve the WTO's functioning, demonstrate its continued relevance for the international trade and ensure the successful MC-12 with the tangible negotiating results to be delivered.
I don't expect any of these issues to be litigated before a WTO panel, but nevertheless it's interesting to see how governments argue about legal issues as part of a political exchange. Many other governments are preparing their domestic trade responses to the Russian invasion right now. I wonder if they will weigh in on the legal issues noted above.
