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/1 Just finished a quick first read of the WTO panel decision today on Article XXI (Russia - Traffic in Transit, DS512). Thanks @rdmcdougall @howserob. Some very preliminary reactions for purposes of discussion. (Long thread).
/2 Section 7.5.2 is in some sense as important as the panel's judgment, as it sets out the positions of member states. We already had some sense of the members' positions, and some (US, EU, Australia included) had released their briefs. At least 2 interesting things there:
/3 First, Canada and the EU both accept justiciability of Art XXI, but are on opposite sides on whether the exception has "objective" elements. Notable given that #CETA essentially replicates the Article XXI formulation, as does 2004 Canadian model FIPA.
/4 Second, China's submission reflects its ambiguous position as a rising power seeking flexibility for its own security measures, while also hoping to avoid overbroad application of NatSec policy against Chinese goods & investment. See @AntheaERoberts @choermoraes
/5 The overall arc of the panel's analysis on Art XXI could have been ghostwritten by Dapo Akande & Sope Williams (bit.ly/2OQyBzz), probably the most on the mark of any of the prior articles to propose a detailed framework.
/6 Panel's decision that "emergency in int'l rel." is "objective fact, amenable to objective determination" does not expressly leave room for deference to state declarations of emergency. Thus more intrusive than many advocates of justiciability expected - at least facially.
/7 Para. 7.76 appears to give definition of emergency in international relations. This follows the tendency to treat military/defense as paradigmatic emergencies & security interests. Increasingly in tension with policy developments, which I discuss here: bit.ly/2HGM2S1 
/8 Flexibility will depend on meaning given later to terms like "public order," "heightened tension," and "crisis," in this and other paras. Also unclear whether the emergency need be unexpected, sudden, or requiring urgent action, as suggested earlier in the report.
/9 The first of many paragraphs that appear to be directed at the U.S. and the 232 disputes.
/10 striking back of the hand dismissal of ICJ discussion in Military and Paramilitary Activities case, as well as Oil Platforms. I see also that the report doesn't appear to cite Djibouti v France, which actually would support the approach taken later on good faith review.
/11 This footnote appears to give the EC a pass for its earlier statements in the Falkland Islands dispute, to the effect that exercise of rights under Article XXI "required neither notification, justification, nor approval."
/12 Section 7.5.3.1.2 discusses "negotiating history," drawing on internal US deliberations as reported in Ken Vandevelde's book and, more extensively, in a new paper by @loyaladvisor - bit.ly/2FU5V4D
/13 As @loyaladvisor points out, it's debatable whether internal US deliberations are really VCLT-worthy supplementary means of interpretation.
/14 I had been wondering whether litigants in these cases would go look up the actual US records at NARA, or whether they would just cite the excerpts in Ken's book. It sounds like both the litigants and the panel opted for the latter approach. (Another thread TK later today.)
/15 A key issue in the briefing on this case was whether Russia had the burden to prove an emergency. Paras. 7.111 et seq. are interesting reading on how this gets cashed out, and shows the panel finding an emergency largely using Ukraine's own reports and exhibits, not Russia's.
/16 I'm not surprised that the panel declined to consider whether Russia or Ukraine bore int'l responsibility for the emergency, despite obvious illegality by Russia.
/17 @snlester predicts this bodes well for the US 232 tariffs, but I'm not so sure. bit.ly/2G2bQps. The panel draws a sharp distinction between int'l crisis and "protectionism under the guise of security."
/18 That's also why I don't think we should be too concerned by para. 7.121, which is about determining int'l responsibility, not about bad-faith or similar scenarios where a party creates an emergency or force majeure situation & then attempts to use it to evade obligations.
/19 Para 7.121, rather, seems a politically savvy move to avoid having Art XXI become a backdoor for adjudication or primarily non-trade disputes about the legality of force/occupation. Cf. Oil Platforms.
/20 Moving to the chapeau, did I miss the panel's answer to the question it poses here? It does seem the panel applies "it considers" only to necessity, while applying a more general notion of deference to "security interests." Contrast w/ approach to "emergency."
/21 Here is the panel's general approach to the "good faith" analysis for the chapeau of Art XXI(b). Far narrower approach than some have argued & closer to a subjective standard. But see n.212, noting that Art XX chapeau has been equated with good faith in US-Shrimp.
/22 For those who, like me, are interested in how new or unorthodox security interests would be addressed, this is perhaps the money passage. Leaves room for innovation, but armed conflict is gold standard, the "hard core" of Art XXI.
/23 I'm not sure that's the best framing and think the text shouldn't necessarily be read to bias Art XXI so heavily to armed conflict, but I admire the care and attention to the issue & the flexibility left open by this passage.
/24 This is passage makes the "for the protection of" language do some work.
/25 And then "necessity," it seems, is up to the member state, provided the other conditions are satisfied. This is why I think that the "it considers" language is being read narrowly, but given strong effect.
/26 Takeaways: The panel report seems directed more to managing the WTO as a system of dispute settlement (ironically at a time when that is under severe threat bit.ly/2uLLFwZ) than to resolving the parties' dispute.
/27 All standards are directed toward assuring states that deference is being afforded, while providing maximum flexibility to adjudicators to redress perceived abuse and gaming of the system. Similar to margin of apprec'n, tribunals could ratchet up std of review as time goes by
/28 At the same time, passages like para. 7.121 avoid further detabilizing WTO by inviting claims about, e.g., whether a use of force or occupation is lawful, without resorting to an untenable political question doctrine. h/t @loyaladvisor
/29 Big question for me - the military vs. protectionism dichotomy set up in e.g. para 7.81, pushes against Trumpian "economic security," but does it choke off the exception for potentially legitimate security interests like cyber, transnat'l law enforcement & climate change?
/30 Big question for treaty drafters - what does this do to the trend, noted by Karl Sauvant & Mevelyn Ong @CCSI_Columbia, bit.ly/2WOwJtP, toward broad security clauses that drop the reference to emergency and other objective limitations?
/31 Last big question - what happens when the reasoning in this report is picked up by investors and starts to be invoked in #ISDS cases under supposedly "self-judging" BITs and FTAs?
