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A WTO’s “Kompetenz-Kompetenz” Moment

Cho_Sungjoon thumbBy Sungjoon Cho [originally posted on the International Economic Law and Policy Blog on April 5, 2019]

This is a supplemental post to Simon’s earlier one that provides an excellent summary of the Russia – Traffic in Transit panel report. Here are some aspects of the panel report that I found interesting and worth further reflection.

First, one might say that this landmark decision is characteristic of a “constitutional” moment to the WTO. I understand that the use of “c” word here might be frowned upon in some circles, both legal and political. However, GATT Article XXI is not just a mundane, technical interpretive issue to the WTO. It is a matter of allocating power between the WTO as an autonomous institution and its member. If I exaggerate a little bit, this particular dispute echoes potential existential angst from the WTO. What if the panel had accepted Russia’s original claim and declared Article XXI as a “self-judging” provision? Constitutional consequences would have been dire. The WTO would have opened the jurisdictional Pandora’s Box, invited massive abuses and therefore undermined its own rationale (and identity).

Second, the panel report handsomely taps various public international law sources, such as the Vienna Convention on the Law of Treaties (VCLT), the UN General Assembly resolutions, and decisions by the International Court of Justice (ICJ) and the International Criminal Tribunal for the Former Yugoslavia (ICTY). (The panel could have also referred to the ICJ Nicaragua decision (1984) when it rejected the application of the “political question” doctrine.) In particular, the panel’s reference to the “good faith” principle under VCLT Articles 26 and 31(1) seems quite judicious. Note that the chairperson of the panel was Professor Georges Abi-Saab, who served as an ad hoc judge at the ICJ.

Last but not least, the WTO panel offers an objective, and “holistic,” doctrine of GATT Article XXI. Note the sequential nature of a series of interpretations of key languages under the Article (paras. 7.134-146). The panel’s interpretation of “emergency in international relations” is linked to that of “essential security interests,” which is in turn linked by that of “necessary.” Finally, the interpretation of the “necessary” language is linked to that of “which it considers.” In doing so, the panel basically prevents any WTO member from invoking Article XXI as a self-standing “incantation that shields a challenged measure from all scrutiny.” (para. 7.100)

Of course, the panel decision could be appealed and part (or the whole) of it could be modified or reversed. Given the current situation in the Appellate Body, however, we will need to wait long before we see the AB decision, if ever.

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