CYIL vol. 9 (2018)

VIKTORIIA LAPA CYIL 9 ȍ2018Ȏ the United States’ export controls on certain products to Czechoslovakia was the first one to bring the GATT security exception in the limelight of the world trade system. The dispute, though, led nowhere in terms of interpreting the security exception since the GATT Contracting Parties stated without further reasoning that the US had met its obligations under GATT. The decision was not unusual for that time due to the nature of the GATT and its dispute settlement system, coupled with its political climate. One could claim that by not interpreting the security exception the Czechoslovakian case introduced the element of chaos in the world trade system. This element of chaos had been kept untouched till 2017 when the security exception issue floated up again in the case brought against Russia by Ukraine. 1 This time with the transformation of the GATT into the WTO, judicialization of its dispute settlement system and the changed political climate, this element of confusion had at last to be interpreted. The case might have systemic implications for the WTO and urged the WTO Members to address broader problems before the WTO as well. This article begins with a brief overview of the Czechoslovakian complaint of 1949 against the US export controls at the GATT. It then explains the outcome of the case political arrangements, taking into account the status quo of the GATT in 1949. The third part demonstrates that by not interpreting the GATT security exception, this case led to the introduction of the element of disorder in the world trade system which had been kept dormant till 2017. The fourth part delves into the WTO’s institutional structure, dispute settlement mechanisms and political environment to explain that presently it is high time to bring the clarity into the security exception issue. The decision on Article XXI should take place under different circumstances than in 1949 since with the development of the WTO system new problems have arisen with a new concept for sovereignty closely intertwined with the security exception concept. The fifth part claims that all solutions to present problems before the GATT have the common traits to be factored in, such as leadership and cooperation of the WTO Members. The final part concludes that premised on manifestation of leadership and cooperation, the interpretation of the security exception is most likely to encourage the WTO Members to solve other problems as well. At the end, the misfortune of the Czechoslovakian case of 1949 could be transformed into the luck of 2018. The Czechoslovakian Case – a Misfortune? In 1947 when the Cold War was still in its initial phase, the United States of America tried to offer the Soviet Union the help under the Marshall Plan. 2 The Soviet Union, 1 Russia-Traffic in Transit, for all developments of the case see Russia – Measures Concerning Traffic in Transit, DS512 (WTO). The Panel report has not been released yet as of 10 August 2018. Although Russia seems to be the first state recently to invoke Article XXI GATT, there are also other cases where the security exception could be dealt with, for example, cases, brought by Qatar amidst the Gulf diplomatic crisis (DS526, DS527, DS528) see here a brief description – Johannes Fahner, ‘Qatar under Siege: Chances for an Article XXI Case?’ ( European Journal of International Law , 9 January 2018) . Other Russia/Ukraine cases – DS525, DS532 and recently, as of 10 of August 2018, the cases have been brought against the US steel and aluminum tariffs (DS544, DS547, DS548, DS550, DS551, DS552, DS554, DS556). 2 More on politics behind see ROBERTS, Geoffrey. ‘Moscow and the Marshall Plan: Politics, Ideology and the Onset of the Cold War, 1947’ (1994) 46 Europe-Asia Studies 1371. It should be mentioned that there were proposals to engage the Soviet Union, instead of blocking trade with it. See X., ‘The Sources of Soviet Conduct’ (1947) 25 Foreign Affairs 566. On political context of the case from the view of Czechoslovakia see 1.

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