Waiving Russia Adieu in the WTO?
The global response has been remarkable, but not sufficient, and its effectiveness is (and will remain) unclear. In this blogpost there is no need to survey the extent of condemnation, as by the UNGA’s sweeping Resolution from March 2, 2022 - in emergency session and invoking the almost forgotten “Uniting for Peace” practice - for which 141 states out of 193 UN Members voted in favor. Reasons for the abstaining votes are geopolitically complex; nevertheless this is an impressive critical mass. Likewise, the state of play regarding unilateral state-imposed as well as private divestment and sanctions is relatively clear and broad.
Turning to the WTO, additional responses have arisen, such as condemnations of Russia, and a joint statement by 40 WTO Members that Belarus, complicit in the invasion, cannot expect to continue with accession procedures.
Other steps have included withdrawal of MFN treatment in trade with Russia (that should ideally cover not only tariff treatment but all market access issues, non-tariff barriers and services). Economic sanctions and withdrawal of MFN clearly implicates domestic legal measures, as in the US, EU and other states; and relies, quite justifiably, on WTO security exceptions. Indeed, this has been the path pursued so far, since early March.
Some (e.g., former WTO Appellate Body Member James Bacchus) have advocated taking the severe and indeed unprecedented step of expelling Russia from the WTO or suspending its Membership, on the (somewhat acrobatic) basis of the institutional voting procedures under Article X of the Agreement establishing the WTO. But as Peter Ungphakorn and others have explained, this is not really possible, legally, under the Agreement. It is also highly improbable, given the WTO’s adherence to consensus decision-making, and Members extremely low appetite for voting. Amendments would also require acceptance and ratification, which could take years (as in the case of the TRIPS amendment on public health, which took 14 years until adoption). Indeed, in the long run, it is also not desirable. The expulsion/suspension option, which would directly address not only trade relations, but Russia’s participation in the WTO, is essentially off the table.
Russia, in its response to Ukraine in the WTO, was quick to note that the “non-application” clauses in Article XXXIII GATT and Article XIII of the Agreement establishing the WTO apply only at the time of accession. This is of course true, and enabling non-application would require, similarly to expulsion, a super-majority vote. Given that amendments to multilateral treaties should be of general application to all Members, this path is highly problematic, as it is a large stone that would expose many Members to be living in glass houses, in the sense that there would be grounds for non-application towards them as well. This would potentially severely fragment the system, if post-accession non-application became a matter of ‘free-for-all’ practice.
Hence the suggestion here to take another path: adopting a waiver for withdrawal of concessions, including MFN, export/import bans etc. – in essence a waiver from obligations vis-à-vis Russia, adopted under Article IX:3 of the WTO Agreement. To be sure, the waiver authority is originally granted to the Ministerial Conference (as are amendments under Article X); and yes, voting and a three-quarters majority would still be necessary, on the reasonable assumption that consensus is unreachable. However, this approach has distinct advantages over what has been done and proposed so far. First, although based on the exceptional circumstances of the Russian invasion, it would bypass the messy questions of legal interpretation and application with respect to security exceptions. Although it is more than plausible that most, if not all, sanctions are covered by security exceptions (not least because of the UNGA Resolution mentioned above), a waiver would grant a watertight defense. Second, a waiver would leave Russia’s status as a WTO Member intact, including its obligations, subject to the terms of the waiver. Third, a waiver would not impose any obligations on Members, but give them a right to act and grant them the flexibility to take their measures of choice, taking into account such measures’ effectiveness and the Members’ bilateral concerns vis-à-vis Russia. Fourth, a waiver, in contrast to an amendment, need not be of general application, but can be Russia-specific. Fifth, waivers are in principle limited in time (e.g., one-year) subject to renewal and review. Thus, contingent on developments in the conflict over time, the waiver could expire or be rescinded, returning Russia to the fold. Indeed, a waiver should be adopted with retroactive effect, covering sanctions and measures taken since the invasion commenced. Sixth, a waiver could be adopted much more quickly than an amendment. Seventh, a waiver would have not only symbolic value, but provide a broad base for excommunicating Russia in the WTO, short of formal expulsion.
Perhaps most importantly, the accumulation of the above should make it easier to garner the necessary three-fourths majority for the adoption of a waiver. This would be unprecedented in its scope (although there are conflict-related waivers, such as the waiver relating to the Kimberley process regarding trade in conflict diamonds, and Cuba’s waiver regarding article XV:6 GATT).
Surely in this proposal I am underestimating the procedural technicalities and political sensitivities in a Waiver approach, but it is a path worth closer – and urgent – examination. Moreover, these truly exceptional circumstances may be an opportunity. As Isabel Feichtner wrote more than a decade ago, WTO waivers may contribute to the adaptability, legitimacy and effectiveness of the WTO. Voting, paradoxically, may be what is needed to save multilateralism from itself.
Tomer Broude is the Bessie & Michael Greenblatt, Q.C., Chair in Public and International Law at the Faculty of Law and Department of International Relations at the Hebrew University of Jerusalem.
This blog was first published on the International Economic Law and Policy Blog.