Russian Trade Sanctions and WTO Law — Now It’s Really Getting Interesting.

Russia and Wto Flags

Do U.S. trade sanctions imposed on Russia because of its annexation  Crimea violate WTO law?
The general question of trade sanctions for foreign policy or national security concerns and WTO law has never been litigated by the WTO. Are such sanctions consistent with or inconsistent with WTO obligations?
Article XXI of the GATT is dispositive of this issue. It allows sanctions for the protection of essential security interests, those taken in time of war or other emergency in international relations, or pursuance to obligations under the U.N. Charter.
So here are a few questions when applying trade sanctions for geopolitical reason.
Are U.S. trade sanctions imposed for the protection of essential U.S. security interests? Does this territorial dispute amount to a war or an emergency? Hasn’t the U.N. Security Council refused to take Article VII enforcement action?
My only point here is that the imposition of trade sanctions on Russia, as in many other cases, is a violation of WTO rules unless they fall within the security and related exceptions. The U.S. has trade sanctions on a long list of countries, from Belarus to Cuba to  Zimbabwe. They have have never been litigated before the WTO.
The Obama administration argues that Russian actions should be assessed in terms of the 21st century  rules of inter-state relations. But in addition to the rules contained in the U.N. Charter, treaties  and customary international law, WTO rules area also at the center of the 21st century global system.
WTO rules regulate trade and commerce. To the extent that those rules apply to state actions (trade sanctions) when relying on foreign policy or national security concerns is a critical issue. This has never been decided by the WTO dispute resolution system. Maybe it’s time for such legal clarification. The next question is of course the effectiveness of trade sanctions. That’s another question.
….. “Russia Threatens US with WTO Action Over Crimea Sanctions.” Financial Times (April 17, 2014).

About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
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