Legal and policy responses to national security measures in international economic law

In recent years, national security rhetoric has gained particular prominence, partly due to the geo-economic and geopolitical developments that have raised the stakes of international competition and new forms of economic warfare. As these developments unfold, economic interdependence is no longer viewed as a guarantee for growing prosperity and stability in the global order but as a source of threats to national security. While such concerns have provoked many reforms and strategic policies, by attempting to restore their sense of security, states at times enlarge insecurity in the global economy. All in all, the international community is left at a crossroads. If security exceptions under international economic law are drafted and interpreted too narrowly, there is a risk that they will not cover essential emerging security threats, including cyber threats, the vulnerability of critical infrastructure, climate change, and states’ legitimate geo-economic concerns. If, however, such security exceptions are drafted and interpreted too broadly, they can allow anything under the sun, making states’ international commitments meaningless.

The contribution of this Article is twofold. First, it steers a middle path between discipline and flexibility in addressing states’ security concerns, stressing the role of not only adjudicators but also the World Trade Organization (WTO), the United Nations, and national governments in fostering transformation and cooperation in dealing with emerging and re-emerging threats to national security and free trade. Second, it expands the rulebook on the application of security exceptions, including their procedural safeguards, and suggests how to improve cooperation between the WTO and the U.N. and incentivize states to use trade and investment restrictions more efficiently, thereby permitting more policy space for calibrated responses to new externalities while reinforcing the function of security exceptions to shield states from responsibility only in extreme situations. Such reforms can contribute to strengthening the legitimacy of international economic law, rebuilding trust in the multilateral trading system and its dispute settlement function, and overcoming possible deadlocks in regional and bilateral negotiations.