Armored Plating and Aluminum Foil Are Not like Products: Consequences of the United States' Overbroad Interpretation of Article XXI of the GATT

By Nardi, Anthony | American University Law Review, January 1, 2019 | Go to article overview

Armored Plating and Aluminum Foil Are Not like Products: Consequences of the United States' Overbroad Interpretation of Article XXI of the GATT


Nardi, Anthony, American University Law Review


INTRODUCTION

Imagine for a moment that you are playing a game of Monopoly with a group of friends. You pass "Go." You collect $200. You land on Park Place. You purchase the property for $350. You land on the "Go To Jail" space. You go to jail. While all of these actions may have positive or negative consequences for you as a player, it is our shared common understanding that we play Monopoly according to the series of rules set forth in the rulebook, else the game descends into strife and conflict.

Now it is your friend Tom's turn. Tom rolls a six and lands on "Community Chest." Tom picks a card and reads it to the group, "Go to Jail. Go directly to jail. Do not pass Go, do not collect $200." Tom picks up his piece, moves it past "Go," collects $200, and places his piece outside of the jail, showing the other players that he has a "Get Out of Jail Free" card. All the other players are aghast. The common understanding is that players cannot use their "Get Out of Jail Free" card until the next turn after they have gone to jail. You tell Tom, "Hey, you cannot collect $200 until your next lap of the board." To which Tom replies, "there is actually an exception in the rules; only the reader of the Community Chest card can interpret its meaning. I believe that a 'Get Out of Jail Free' card can be used immediately when a player is sent tojail, and the other players are not allowed to dispute my interpretation."

The next player, Timmy, also rolls a six. Timmy lands on "Community Chest," and picks up the card. Timmy reads, "Collect $100." Timmy then asks the banker for $50,000, exclaiming "That is my interpretation of the card." From here, the game is over. The interpretive exception has swallowed the rule, and the players now wield the exception as a sword to defeat any attempt to enforce the rules. We learn that when a rule set allows for discretionary exceptions, there must be some institutional oversight; otherwise, the members will use the exception as a tool to evade the established rules.

The rules of Monopoly are analogous to the rules set forth in the General Agreement on Tariffs and Trade (GATT),1 which is the primary treaty that the World Trade Organization (WTO) enforces. WTO Member states are bound to abide by the provisions of the GATT when they engage in international trade with other Members.2 In a similar manner to Monopoly, when one Member abuses its discretionary power under the rules, the other Members follow suit so as not to lose out on a potential economic benefit. This Comment analyzes whether the United States has incorrectly invoked a discretionary exception to the general GATT rules.

On March 8, 2018, President Trump issued two Presidential Proclamations that could have the effect of destroying the GATT. Presidential Proclamations 9704 and 9705, titled "Adjusting Imports of Aluminum into the United States" and "Adjusting Imports of Steel into the United States" respectively, provided for an increase in the import tariffs that are applied to steel and aluminum products imported to the United States after March 23, 2018, in the interest of economic security.3 Under the GATT, a Member can change the value of its import tariffs as long as the Member does not set the tariff rate above the upper limit of its set tariff binding.4 However, Article XXI acts as a discretionary exception to these tariff-binding obligations, which allows Members to raise their tariffs above the bindings when they consider it necessary for the protection of their essential security interest.5

This Comment asserts that the United States' use of economic security instead of national security to justify its increased tariffs violated Article XXI of the GATT, as the drafters of the GATT did not intend for "essential security interests" to encompass tariffs based solely on economic security. Using the applicable treaty interpretation tools provided in the Vienna Convention on the Law of Treaties,6 this Comment shows that the GATT itself does not give a definitive interpretation of Article XXI and that the provision's true meaning can only be deduced from the GATT's negotiating history. …

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