The World Trade Organization (WTO) Panel in Russia – Measures Concerning Traffic in Transit made the first interpretation of Article XXI in WTO history, thereby establishing its jurisdiction and setting relatively strict requirements for invocations. As this interpretation has been followed in subsequent WTO disputes, deeper consideration of its requirements, implications, and limitations is warranted, especially in the global economic context where emerging security challenges and trade orders are intertwined. This article argues that the Panel achieved a balance by being flexible about new forms of ‘emergency in international relations’ and ‘essential security interests’, while remaining conservative on the high level of crises that should be embodied in these two components. This balanced interpretation renders Article XXI(b)(iii) a malleable exception that may accommodate certain evolving security threats. Nevertheless, this article contends that the Panel failed to point out the causal link between the two elements: ‘emergency in international relations’ and ‘essential security interests’. This article proposes that the ‘essential security interests’ proffered by the Member should be either a new occurrence or have increased significantly due to the ‘emergency in international relations’ at hand. Regarding the implications of this case, it has preserved global economic multilateralism, as demonstrated by subsequent cases concerning national security exception clauses, including United States – Certain Measures on Steel and Aluminium Products (China). It will also influence the interpretation of Article XXI(b)(ii) and the national security review of foreign investment. Despite these far-reaching implications, there are also limitations to the Panel’s ruling. A primary limitation is that the Panel’s interpretation cannot respond to many new security needs that emerge in a context where the international economic and trade order is deeply intertwined with national security. The underlying reason is that many new security challenges have different inherent logic from issues intended to be covered under Article XXI(b)(iii), revealing the insufficiency of existing international economic and trade rules in addressing these evolving security challenges. Therefore, international economic and trade rules should be reformed, and a set of approaches ranging from political to legal, as well as hybrid ones, are proposed herein. These approaches could promote one another, and thus a combination of these various approaches is recommended. By exploring these potential methods, international actors could play an active role in reshaping and reforming world trade mechanisms and rules to promote a global economic order capable of addressing multifaceted challenges.

Keywords: International Economic and Trade Rules, National Security, Security Exception, Article XXI, WTO, Russia – Traffic in Transit, National Security Review, Cybersecurity

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The authors declare that they have no conflicts of interest to report regarding the present study.

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The Legal Interpretation of National Security Exception in Russia – Traffic in Transit: Requirements, Implications, and Limitations in a Global Economy Intertwined with National Security