Separating the political from the economic : the Russia-traffic in transit panel report

Abstract

This paper reviews the World Trade Organization (WTO) Panel Report “Russia-Measures Concerning Traffic in Transit” of April 2019. It constitutes the first attempt to disentangle the legal and political aspects related to the invoked essential security interests from the economic considerations underlying the measures imposed on the transit through Russia of goods exported from Ukraine to the Republic of Kazakhstan and Kyrgyzstan. One the one hand, the Panel’s analytical framework for the interpretation of Article XXI of the GATT denied Members unilateral determination over the security exceptions. It further enables future WTO panels a pathway for reviewing possible abuses of the security exceptions, a growing concern with the rising complexity of transnational economic relations. On the other hand, our economic analysis suggests a stricter assessment of Russia’s transit restrictions was necessary to satisfy this framework. In particular, the economic analysis argues the Panel adopted a circular assessment when considering the plausibility of whether Russia implemented its measures for the protection of its essential security interests in time of emergency in international relations. Ultimately, the Panel's attention to finding a diplomatic and legal path forward failed economic scrutiny; still, a legal assessment argues that the Panel's findings fit the legal design of Article XXI:b of the GATT.