WT/DS597/R/Add.1  
 
21 December  2022 
(22-9287) Page: 1/100 
  Original: English  
 
  
UNITED STATES - ORIGIN MARKING REQUIREMENT  
REPORT OF THE PANEL  
Addendum  
This addendum  contains Annexes A to C to the Report of the Panel to be found in document  
WT/DS597/R . 
 
_______________  
 
 
 
 
 
 
 
 
 
 WT/DS597/R/Add.1  
 
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LIST OF ANNEXES  
ANNEX  A 
WORKING PROCEDURES OF THE PANEL  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  4 
Annex  A-2 Additional Working Procedures concerning Business Confidential Information 
(BCI) 11 
Annex  A-3 Additional Working Procedures concerning Substantive Meetings with Remote 
Participation  13 
ANNEX B  
ARGUMENTS OF THE PARTIES  
Contents  Page  
Annex  B-1 Integrated executive summary of the arguments of Hong Kong, China  18 
Annex  B-2 Integrated executive summary of the arguments of the United States  39 
ANNEX  C 
ARGUMENTS OF THE THIRD PARTIES  
Contents  Page  
Annex  C-1 Integrated executive summary of the arguments of Brazil  63 
Annex  C-2 Integrated executive summary of the arguments of Canada  66 
Annex  C-3 Integrated executive summary of the arguments of China  71 
Annex  C-4 Integrated executive summary of the arguments of the European Union  73 
Annex  C-5 Integrated executive summary of the arguments of Japan  77 
Annex  C-6 Integrated executive summary of the arguments of Norway  80 
Annex  C-7 Integrated executive summary of the arguments of the Russian Federation  84 
Annex  C-8 Integrated executive summary of the arguments of Singapore  89 
Annex  C-9 Integrated executive summary of the arguments of Switzerland  94 
Annex  C-10 Integrated executive summary of the argument s of Ukraine  99 
 
 
 
 
 WT/DS597/R/Add.1  
 
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  ANNEX  A 
WORKING PROCEDURES OF THE PANEL  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  4 
Annex  A-2 Additional Working Procedures concerning Business Confidential Information 
(BCI) 11 
Annex  A-3 Additional Working Procedures concerning Substantive Meetings with Remote 
Participation  13 
 
 WT/DS597/R/Add.1  
 
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  ANNEX  A-1 
WORKING PROCEDURES OF THE PANEL  
Adopted on 21 May 2021  
 
General  
 
1. (1) In this proceeding, the Panel shall follow the relevant provisions of the Understanding 
on Rules and Procedures Governing the Settlement of Disputes ("DSU").  In addition, the 
following Working Procedures apply.   
(2) The Panel reserves the right to modify t hese procedures as necessary, as well as any 
additional working procedures, after consultation with the parties.  
Confidentiality  
2. (1) In accordance with the DSU, t he deliberations of the Panel  shall be confidential,  and the 
documents submitted to it  shall be treated as  confidential. Members  shall treat as confidential 
information  that is submitted to the Panel  which the submitting Member has  designated as 
confidential.   
(2) In accordance with  the DSU , nothing  in thes e Working Procedures shall preclude a party 
or third party from disclosing statements of its own positions to the public.  
(3) If a party submits a confidential version of its written submissions to the Panel, it shall 
also, upon request of a Member, provi de a non -confidential summary of the information 
contained in its submissions that could be disclosed to the public.  Non-confidential summaries 
shall be submitted no later than ten days after the written submission in question is presented 
to the Panel, un less a different due date is granted by the Panel upon written request of a 
party showing good cause.  
(4) Upon request, the Panel may adopt appropriate additional procedures for the treatment 
and handling of confidential information after consultation with  the parties.  
Submissions  
 
3. (1) Before the first substantive meeting of the Panel with the parties, each party shall 
submit a  written submission in which it  presents the facts of the case and its arguments, in 
accordance with the timetable adopted by th e Panel.  
(2) Each party shall also submit to the Panel, before  the second substantive meeting of the 
Panel, a written rebuttal, in accordance with the timetable adopted by the Panel.  
(3) Each third party that chooses to make a written submission before t he first substantive 
meeting  of the Panel with the parties shall do so in accordance with the timetable adopted by 
the Panel.  
(4) The Panel may invite the parties or third parties to make  additional submissions during  
the proceeding, including with respect to requests for preliminary rulings in accordance with 
paragraph 4 below.   
Preliminary rulings  
4. (1) If the United States  considers that the Panel should make a ruling before the issuance 
of the Report that certain measures or claims in the panel request or the complainant's first 
written submission are not properly before the Panel , the following procedure applies . 
Exceptions to this procedure shall be granted upon a showing of good cause.     WT/DS597/R/Add.1  
 
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  a. The United States  shall s ubmit any such request for a preliminary ruling at the earliest 
possible opportunity and in any event no later than in its first written submission. Hong 
Kong, China, shall submit its response to the request before the first substantive meeting 
of the Pane l, at a time to be determined by the Panel in light of the request.  
b. The Panel may issue a preliminary ruling on the issues raised in such a preliminary ruling 
request before, during or after the first substantive meeting , or the Panel may defer a  
ruling on  the issues raised by a preliminary ruling request until it issues its Report to the 
parties.   
c. If the Panel finds it appropriate to issue a preliminary ruling before  the issuance of its 
Report, the Panel may provide  reasons for the ruling at the time that the ruling is made, 
or subsequently in its Report.   
d. Any request for such a preliminary ruling by the respondent before  the first meeting, and 
any subsequent submiss ions of the parties in relation thereto before  the first meeting, 
shall be  served on all third parties. The Panel may provide all third parties with an 
opportunity to provide comments on any such request, either in their submissions as 
provided for in the timetable or separately. Any preliminary ruling issued by the Panel 
before  the first substantive meeting on whether certain measures or claims are properly 
before the Panel shall be shared with  all third parties.   
(2) This procedure is without prejudice to  the parties' right to request other types of 
preliminary or procedural rulings during  the proceeding, and to the procedures that the Panel 
may follow with respect to such requests.  
Evidence  
5. (1) Each party shall submit all evidence to the Panel no later  than during the first 
substantive meeting, except evidence necessary for purposes of rebuttal, or evidence 
necessary for answers to questions or comments on answers provided by the other party. 
Additional exceptions may be granted upon a showing of good c ause.  
(2) If any new evidence has been admitted upon a showing of good cause, the Panel shall 
accord the other party  an appropriate period of time to comment on the new evidence 
submitted.  
6. (1) If the original language of an exhibit  or portion thereof i s not a WTO working language, 
the submitting party or third party shall simultaneously submit a translation of the exhibit or 
relevant portion into the WTO working language of the submission . The Panel may grant 
reasonable extensions of time for the transl ation of exhibits upon a showing of good cause.  
(2) Any objection as to the accuracy of a translation should be raised promptly  in writing, 
preferably no later than the next submission  or meeting (whichever occurs earlier) following 
the submission which c ontains the translation in question. Any objection shall be accompanied 
by an explanation of the grounds for the  objection and an alternative translation.  
7. (1) To facilitate the maintenance of the record of the dispute and maximize the clarity of 
submis sions, each party and third party shall sequentially number its exhibits throughout the 
course of the dispute, indicating the submitting Member and the number of each exhibit on its 
cover page. Exhibits submitted by Hong Kong, China  should be numbered HKG-1, HKG-2, etc. 
Exhibits submitted by the United States  should be numbered USA -1, USA-2, etc. If the last 
exhibit in connection with the first submission was numbered HKG-5, the first exhibit in 
connection with the next submission thus would be numbered HKG-6. If a party withdraws an 
exhibit or leaves one or more exhibits intentionally blank, it should indicate this on the cover 
page that provides the number of the blank exhibit "exhibit withdrawn" or "exhibit left 
intentionally blank", as the case may be.    
(2) With each submission, oral statement, and response to questions attaching new 
exhibits, a party shall provide an updated list of exhibits in Word or Excel format . WT/DS597/R/Add.1  
 
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  (3) If a party submits a document that has already been submitted as an exhibit by the 
other party, it should explain why it is submitting that document again.  
(4) If a party includes a hyperlink to the content of a website in a submission, and intends 
that the cited content form part of the official record, the cited content of the website shall be 
provided in the form of an exhibit along with an indication of the date that it was accessed.  
Editorial Guide  
8. In order to facilitate the work of the Panel, each party and third party is invited to make its 
submissions in accordance with the WTO  Editorial Guide for Panel Submissio ns (electronic copy 
provided).  
Questions  
 
9. The Panel may pose questions to the parties and third parties at any time, including:  
a. Before any meeting, the Panel may send written  questions , or a list of topics it inten ds 
to pursue in questioning orally during a meeting. The Panel may ask different or additional 
questions at the meeting.   
b. The Panel may put questions to the parties and third parties orally during  a meeting, 
and in writing following the meeting, as pro vided for in paragraph s 15 and 22  below.   
Substantive meetings  
 
10. The Panel shall meet in closed session.  
11. The parties shall be present at the meetings only when invited by the Panel to appear before 
it.  
12. (1) Each party has the right to determine the composition of its own delegation when 
meeting with the Panel.  
(2) Each party shall  have the responsibility  for all members of its delegation and shall 
ensure that each member of its delegation acts in accordance with the DSU and these Working 
Procedures, particularly with regard to the confidentiality of the proceeding and the 
submissions of the parties and th ird parties.  
13. Each party shall provide to the Panel the list of members of its delegation no later than 
5.00 p.m. (Geneva time ) three working days before  the first day of each meeting with the Panel.   
14. A request for interpretation  to a WTO working l anguage  by any party should be made to the 
Panel as early as possible, preferably at the organizational stage, to allow sufficient time to ensure 
availability of interpreters.  
15. The first substantive meeting of the Panel with the parties shall be conduct ed as follows:  
a. The Panel shall invite Hong Kong, China to make an opening statement to present its 
case first. Subsequently, the Panel shall invite the United States to present its point of view. 
Before each party takes the floor, it shall provide the P anel and other participants at the 
meeting with a provisional written version of its statement. If interpretation is needed, each 
party shall provide additional copies for the interpreters before taking the floor.  
b. Each party should avoid lengthy repetition of the arguments in its submissions. Each 
party is invited to limit the duration  of its opening statement to not more than 75 minutes. If 
either party considers that it requires more time for its opening statement, it should  inform 
the Panel and the other party at least 10 days before  the meeting, together with  an estimate 
of the expected duration  of its statement. The Panel will accord equal time to the other party.   WT/DS597/R/Add.1  
 
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  c. After the conclusion of the opening statements, the Pa nel shall give each party the 
opportunity to make comments or ask the other party questions.  
d. The Panel may subsequently pose questions to the parties.  
e. Once the questioning has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with Hong Kong, China presenting its statement first. Before 
each party takes the floor, it shall provide the Panel and other participants at the meeting with 
a provisional written version of its closing statement , if available . 
f. Following the meeting:  
i. Each party shall submit a final written version of its opening statement no later than 
5.00 p.m. (Geneva time) on the first working day following the meeting.  At the same 
time, each party should also submit a final written version o f any prepared closing 
statement that it delivered at the meeting.   
ii. Each party shall send in writing, within the timeframe established by the Panel before 
the end of the meeting, any questions to the other party to which it wishes to receive 
a response in writing.  
iii. The Panel shall send in writing, within the timeframe established by the Panel before  
the end of the meeting , any questions to the parties to which it wishes to receive a 
response in writing.  
iv. Each party shall respond in writing to the questions from the Panel, and to any 
questions posed by the other party, within the time -frame established by the Panel 
before  the end of the meeting . 
16. The second substantive meeting of the Panel with the parties shall be conducted in the same 
manner as the first  substantive meeting with the Panel, except that the United States shall be given 
the opportunity to present its oral statement first. The party that presented its opening statement 
first shall present its closing statement first.  
17. The Panel reserves th e right to adopt additional working procedures governing substantive 
meetings with remote participation, as necessary.  
Third party session   
 
18. Each third party may present its views orally during a session of the first substantive meeting 
with the parties set aside for that purpose.  
19. Each third party shall indicate to the Panel whether it intends to make an oral statement during 
the third -party session,  along with the list of members of its delegation, in advance of this session 
and no later than 5.00  p.m. (Geneva time) th ree working day s before  the third -party session of the 
meeting with the Panel.   
20. (1) Each third party has the right t o determine the composition of its own delegation  when 
meeting with the Panel.  
(2) Each third party shall have the responsibility for all members of its delegation and shall 
ensure that each member of its delegation acts in accordance with the DSU and the se Working 
Procedures, particularly with regard to the confidentiality of the proceeding and the 
submissions of the parties and third parties.  
21. A request for interpretation by any third party  to a WTO working language  should be made to 
the Panel as ear ly as possible, preferably upon receiving the working procedures and timetable for 
the proceeding, to allow sufficient time to ensure availability of interpreters.  
22. The third -party session shall be conducted as follows:  WT/DS597/R/Add.1  
 
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  a. The parties and third parties may be present during the entirety of this session.  
b. The Panel shall first hear the oral statements of the third parties. Each third party making 
an oral statement at the third -party session shall provide the Panel and other participants 
with a provisio nal written version of its statement before it takes the floor . If interpretation 
of a third party's oral statement is needed, that third party shall provide additional copies 
for the interpreters  before taking the floor .  
c. Each third party should limit the duration of its  statement to 15 minutes, and avoid 
repetition of the arguments already in its submission . If a third party considers that it 
requires more time for its opening statement, it should inform the Panel and the parties 
at least seven  days before the meeting, together with an estimate of the expected duration  
of its statement. The Panel will accord equal time to all third parties for their statements.    
d. After the third parties have made their statements, the parties shall be given the 
oppor tunity to pose questions to any third party, for clarification on any matter raised in 
that third party's submission or statement.  
e. The Panel may subsequently pose questions to any third party.  
f. Following the third -party session:  
i. Each third party shall submit the final written version of its oral statement, no later 
than 5.00  p.m. (Geneva time) on the first working day following the meeting.  
ii. Each party may send in writing, within the timeframe to be established by the Panel 
before the end of t he meeting, any questions to one or more third parties to which it 
wishes to receive a response in writing.  
iii. The Panel may send in writing, within the timeframe to be established by the Panel 
before  the end of the meeting , any questions to one or more  third parties to which it 
wishes to receive a response in writing.  
iv. Each third party choosing to do so shall respond in writing to written questions from 
the Panel or a party, within a timeframe established by the Panel before  the end of the 
meeting . 
23. The Panel reserves the right to adopt additional working procedures governing third -party 
sessions with remote participation, as necessary.  
Descriptive part and executive summaries  
 
24. The description of the arguments of the parties and third parties in the descriptive part of the 
Panel report shall consist  of executive summaries provided by the parties and third parties, which 
shall be annexed  as addenda to the report. These executive summaries shall not in any way serve 
as a substitute for th e submissions of the parties and third parties in the Panel's examination of the 
case.  
25. Each party shall submit a single integrated executive summary. The integrated executive 
summary shall summarize, in separate sections pertaining to each submission,  only those facts and 
arguments as presented to the Panel in its written submissions and oral statements in accordance 
with the timetable adopted by the Panel . This summary may also include a summary of its responses 
to written questions from the Panel and any comments to the responses of the other party, where 
applicable.  
26. The integrated executive summary shall not exceed 30  pages.   
27. Each third party shal l submit an integrated executive summary of its arguments as presented 
in its written submission and statement in accordance with the timetable adopted by the Panel. This 
integrated executive summary may also include a summary of responses to questions. Th e executive 
summary to be provided by each third party shall not exceed six  pages. If a third -party submission WT/DS597/R/Add.1  
 
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  and/or oral statement does not exceed six pages in total, this shall serve as the executive summary 
of that third party's arguments  unless that t hird party indicates that it does not wish for the 
submission and/or oral statement to serve as its executive summary, in which case it shall submit 
a separate executive summary . 
28. The Panel may request the parties and third parties to provide executive summaries of facts 
and arguments presented in any other submissions to the Panel for which a deadline may not be 
specified in the timetable.  
Interim review  
 
29. Following issuance of the interim report, each party may submit a written request to review 
precise aspects of the interim report and request a further meeting with the Panel, in accordance 
with the timetable adopted by the Panel. The right to request such a meeting shall be exercised no 
later than at the time the written request for review is submi tted.  
30. Each party may submit written comments on the other party's written request for review. 
Such written comments shall be limited to the other party's written request for review and shall be 
submitted in accordance with the timetable adopted by the  Panel.  
Interim and Final Report  
31. The interim report, as well as the final report before its official circulation, shall be kept strictly 
confidential and shall not be disclosed.  
Service of documents  
 
32. The following procedures regarding service of documents apply to all documents submitted by 
parties and third parties during  the proceeding:  
a. Each party and third party  shall submit all documents to the Panel via the Disputes On -
Line Registry Application (DORA) https://dora.wto.org  by 6:00  p.m. (Geneva time) on the 
due dates established by the Panel. The electronic  version uploaded into DORA shall 
constitute the official version for the purposes of submission deadlines and the record of 
the dispute. Upload of a document into DORA  shall constitute electronic service on the 
Panel, the other party, and the third parties.  
b. By 5:00 p.m. (Geneva time) the next working day following the electronic submission, 
each party and third party  shall deliver one paper copy of all documents it submits to the 
Panel, including the exhibits, to the DS  Registry (Office No. 2047)  for the DS Registry's 
archive. The DS  Registrar shall stamp the documents with the date and time of delivery 
of the paper c opy. If an exhibit is in a format that is impractical to deliver as a paper copy, 
then the party may deliver such exhibit in electronic format (email or on a CD -ROM, DVD 
or USB key). In this case, the cover page of the exhibit should indicate that the exhi bit is 
only available in electronic format.1  
c. The Panel shall provide the parties with the Descriptive Part of the Report, the Interim 
Report and the Final Report, as well as all other documents or communications issued by 
the Panel during the proceeding,  via DORA .  
d. For any ad hoc  communications (i.e. communications other than those identified in the 
Panel's timetable) made by the Panel through DORA, the Panel shall notify the parties and 
third parties via email of such a communication. Likewise, for any s uch communication 
sent by a party through DORA, the party shall notify the Panel, the other party, and the 
third parties of such a communication via email . The Panel and the parties would 
nonetheless follow the procedures set forth in paragraphs 30B a., b. , and c. above.    
 
1 If the DS Registry office is unavailable for the service of paper copies on account of restrictions 
relating to the current COVID -19 pandemic, the "next working day" shall mean the day following the 48 hours 
after which the Panel informs the parties that normal operations have resumed.  WT/DS597/R/Add.1  
 
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  e. If the parties or third parties have any questions or technical difficulties relating to DORA, 
they are invited  to contact the DS Registry (DSRegistry@wto.org ).2  
f. If any party or third party is u nable to meet the 6:00 p.m. deadline because of technical 
difficulties in uploading these documents into DORA, the party or third party concerned 
shall inform the DS Registry ( DSRegistry@wto.org ) without delay and provide an electronic 
version of all documents to be submitted to the Panel by email including any exhibits. The 
email shall be addressed to DSRegistry@wto.org , the Panel Secretary, the other party 
and, if appropriate, the third parties. The documents sent by email  shall be submitted no 
later than 7:00 p.m. on the due date established by the Panel . If the file size of specific 
exhibits makes transmission by email  impossible, or it would require more than five email  
messages, owing to the number of exhibits to be filed, to transmit all of them by email , 
the specific large file size exhibits, or those that cannot be attached to the first five email  
messages, shall be fi led with the DS Registry ( Office No. 2047) and provided to the other 
party and, if appropriate, the third parties by no later than 9:30 a.m. the next working 
day on a n electronic medium acceptable to the recipient .3 In that case, the party or third 
party concerned shall send a notification to the DS Registr ar, copying the Panel Secretary, 
the other party, and the third parties, as appropriate , via email , identifying the numbers 
of the exhibits that cannot be transmitted by email . 
g. In case any party or third  party is unable to access a document filed through DORA because 
of technical difficulties, it shall promptly, and in any case no later than 5 :00 p.m. on the 
next working day after the due date for the filing of the document, inform the DS  Registrar , 
the Panel Secretary, and the party or third party that filed the document, of the problem 
by email  and shall, if possible, identify the relevant document(s). The DS  Registrar will 
promptly try to identify a solution to the technical problem. In the meantime, th e party or 
third party that filed the document(s) shall, promptly after being informed of the problem, 
provide an electronic version of the relevant document(s) to the affected party or third 
party by email , with a copy to the DS Registry ( DSRegistry@wto.org ) and the Panel 
Secretary to allow access to the document(s) while the technical problem is being 
addressed. The DS Registrar may provide an electronic version of the relevant 
document(s) by email  if the affected  party or third party so requests. The DS Registrar 
shall in that case copy the party or third party that filed the document(s) on the email  
message.  
Correction of clerical errors in submissions  
33. The Panel may grant leave to a party or third party to correct clerical errors in any of its 
submissions (including paragraph numbering and typographical mistakes). Any such request should 
identify the nature of the errors to be corrected and should be mad e promptly following the filing of 
the submission in question.  
 
 
2 Please note that assistance can o nly be provided until 5:00 p.m.  
3 If the DS Registry office is unavailable for the service of the electronic files of large exhibits that 
cannot be sent via email, on account of restrictions relating to the current COVID -19 pandemic, the party or 
third party filing the exhibit shall coord inate with the DS Registry on an acceptable manner for the submission 
of those exhibits as soon as practicable.  WT/DS597/R/Add.1  
 
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  ANNEX A -2 
ADDITIONAL WORKING PROCEDURES CONCERNING  
BUSINESS CONFIDENTIAL INFORMATION (BCI)  
Adopted on 21 May 2021  
 
1. These procedures  are additional to the general protection of confidential information set forth 
in paragraph 2(1) of the Panel's Working Procedures, and  they apply to any business confidential 
information ("BCI") that a party  wishe s to submit to the Panel.  
2. For the purposes of these procedures, BCI is defined as any information that has been 
designated as such by the party submitting the information, that is not available in the public 
domain, and the release of which would seriously  prejudice an essential interest of the person or 
entity that supplied the information to the submitting Member . 
3. No person may have access to BCI except a member of the Panel or the WTO Secretariat  
assisting the panel , an employee of a party or third party , and an outside advisor acting on behalf 
of a party or third party for the purposes of this dispute . However, an outside advisor is not permitted 
access to BCI if that advisor is an officer or employee of an enterprise engaged in the production, 
sale, exp ort, or import of the products at issue  or an officer or employee of an association of such 
enterprises.  
4. A party or third party  having access to BCI shall treat it as confidential, i.e. shall not disclose 
that information other than to those persons author ized to have access to i t pursuant to these 
procedures . Each party and third party shall have responsibility in this regard for its employees as 
well as any outside advisors used  for the purposes of this dispute.  BCI obtained under these 
procedures may be used only for the purpose of providing information and argumentation in this 
dispute  and for no other purpose.  
5. The party or third party submitting BCI  shall mark the cover and/or first page of the document 
contai ning BCI, and each page of the document, to indicate th e presence of such information.  The 
specific information in question shall be placed between double brackets, as follows: [[xx,xxx.xx]]. 
The first page or cover of the document shall state "Contains bu siness confidential information on 
pages xxxxxx", and each page of the document shall contain the notice "Contains Business 
Confidential Infor mation" at the top of the page.  In case of exhibits, the party or third party 
submitting BCI  in the form of an Exh ibit shall mark it as (BCI) next to the exhibit number (e.g.  Exhibit 
HKG-1 (BCI), Exhibit USA -1 (BCI)).  Should the party  or third party  submit specific BCI within a 
document which is considered to be public, the specific information in question shall be pl aced 
between double brackets, as follows: [[xx,xxx.xx]]".  
6. Any BCI that is submitted in an electronic format shall be clearly marked with the terms  
"Business Confidential Information" or "BCI". In addition, where applicable, the  label of the storage 
medium  shall be clearly marked with the terms "Business Confidential Information" or "BCI" . 
7. If a party submits a document containing BCI to the Panel, the other party or any third party 
referring to that BCI in its documents, including written submissions, written versions of oral 
statements , and documents submitted in an electronic format , shall mark the document and any 
storage medium, and use double brackets, as set out in paragraphs 5 and 6.  
8. In the case of an oral statement containing BCI, t he party or third party making such a 
statement shall inform the Panel one week in advance that the statement will contain BCI, and the 
Panel shall ensure that only persons authorized to have access to BCI pursuant to these procedures  
are present to hear t hat statement , subject to any additional working procedures that the Panel may 
adopt for meetings with remote participation .  WT/DS597/R/Add.1  
 
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  9. If a party considers that information submitted by the other party  or a third party  should have 
been designated as BCI and it obje cts to such submission without BCI designation, it shall forthwith 
bring this objection to the attention of the Panel, the other party, and, where relevant, the third 
parties.  The same procedure shall be followed if a party considers that information submi tted by the 
other party  or a third party  with the notice "Contains Business Confidential Information" should not 
be designated as BCI.  The Panel shall decide whether information subject to an objection will be 
treated as BCI for the purposes of these proce edings, as appropriate, in accordance with the criteria 
set out in paragraph 2 of these procedures . The information subject to an objection shall be treated 
as BCI in accordance with these procedures until the Panel issues  its decision. Each party  and third 
party  shall act in good faith and exercise restraint in designating information as BCI. The Panel shall 
have the right to intervene in any manner that it deems appropriate, if it is of the view that restraint 
in the designation of BCI is not bei ng exercised.  
10. The parties, third parties, the Panel, the WTO Secretariat, and any others who have access to 
documents containing BCI under the terms of these Additional Working Procedures shall store all 
documents containing BCI so as to prevent unauth orized access to such information.  
11. The Panel will not disclose BCI, in its report or in any other way, to persons not authorized 
under these pr ocedures to have access to BCI.  The Panel may, however, make statements of 
conclusi on drawn from such informa tion. Before the Panel circulates its final report to the Members, 
the Panel will give each party an opportunity to review the report to ensure that it does not disclose 
any information that the party has designated as BCI.  
12. If (a) pursuant to Article 16.4 of the DSU, the Panel Report is adopted by the DSB, or the DSB 
decides by consensus not to adopt the Panel Report, (b) pursuant to Article 12.12 of the DSU, the 
authority for establishment of the Panel lapses, or (c) pursuant to Article 3.6 of the DSU, a m utually 
satisfactory solution is notified to the DSB before the Panel completes its task, within a period to be 
fixed by the Panel, each party and third party shall return all documents (including electronic material 
and photocopies) c ontaining BCI to the party that designated such information  as BCI , or certify in 
writing to the Panel and the other party  or third party  (or the parties, in the case of a third party 
returning such documents) that all such documents (including electronic material and photocop ies) 
have been destroyed, consistent with the party's record -keeping obligations under its domestic laws. 
The parties and third parties may, however, retain one copy of each of the documents containing 
BCI for their archives, subject to prior written agree ment of the party or third party having 
designated such information as BCI and their continued adherence  to the terms of these Additional 
Working Procedures.  The Panel and the WTO Secretariat shall likewise return all such documents or 
certify to the parti es that all such documents have been destroyed. The WTO Secretariat shall, 
however, have the right to retain one copy of each of the documents containing BCI for the archives 
of the WTO or for transmission to the Appellate Body in accordance with paragraph  13 below.  
13. Submissions, exhibits, and other documents or recordings containing BCI will be included in 
the record forwarded to the Appellate Body in the event of an appeal of the Panel Report.  
14. The Panel reserves the right, after consulting with the parties , to amend and/or supplement 
these Additional Working Procedures concerning BCI.   
 WT/DS597/R/Add.1  
 
- 13 - 
 
  ANNEX  A-3 
ADDITIONAL WORKING PROCEDURES CONCERNING SUBSTANTIVE MEETING S 
WITH  REMOTE  PARTICIPATION  
Adopted on 6 August  2021  
 
General  
 
1. These  Additional  Working  Procedures  set out terms  for holding  the substantive  meeting s of 
the Panel in which participants may attend by remote means . 
 
Definitions  
 
2. For the purposes of these Additional Working  Procedures:  
 
"DORA" means the Disputes Online Registry Application.  
 
"Host" means the designated person within the WTO Secretariat responsible for the 
management of the platform for remote participants to participate in the meeting with the 
Panel.  
 
"Participant" means any authorized person atte nding the meeting, either remotely or from 
the designated room at the WTO premises, including the Members of the Panel, the WTO 
Secretariat staff involved in the dispute and the organization of the meeting, members of 
the parties' and third parties' delega tions, and  interpreters.  
 
"Platform" means the Cisco Webex platform.  
 
Equipment and technical requirements  
 
3. Each party  and third party shall be responsible  for ensuring  that the members  of its delegation 
participating in the meeting with the Panel by remote means join the meeting using the designated 
platform, and meet the minimum equipment and technical requirements set out by the platform 
provider for the effective conduct of the  meeting.  
 
4. Technical questions, including the minimum equipment and t echnical requirements for the 
usage of the platform, will be addressed in the advance testing sessions between the Host and 
remote participants provided for in paragraph 7 below.  
 
Technical support  
 
5. (1) In light of the Secretariat's  limited  ability  to offer remote  assistance  during,  and in 
advance of  the meeting,  each party and third party is responsible  for providing  its own 
technical  support to the members of its  delegation.  
 
(2) The host will assist  participants  in accessing  and using  the platform  in preparation  for, 
and during the course of, the meeting with the  Panel.  The host will prioritize assisting those 
participants designated as main speakers on the delegations' lists.  
 
Pre-meeting  
 
Registration  
 
6. Each party and third party s hall provide to the Panel the list of the members of its delegation  
on the dedicated form in Annex 1 below,  no later than 5  p.m. (Geneva  time) on a date to be 
established by the Panel and communicated to the parties .  
 WT/DS597/R/Add.1  
 
- 14 - 
 
  Advance testing  
 
7. Each group  of remote participants  (members  of each party's  and third party's  delegation)  will 
hold two testing sessions  for each substantive meeting,  with the Secretariat  before  the meeting  with 
the Panel:  a separate  one for each group, and a joint session with all remote participants in the 
meeting. Such test sessions will seek to reflect, as far as possible, the conditions of the proposed 
meeting. Remote participants should make themselves available for the test  sessions.  
 
Confidentiality and security  
 
8. The meeting shall be  confidential.  
 
9. Each party and third party  shall follow  any security  and confidentiality  protocols  and guidelines 
set by the Panel in advance of the  meeting.  
 
10. The remote participants shall connect to the meeting through a secure internet connection 
and shall avoid the use of an open or public internet  connection.  
 
Conduct of the meeting  
 
Recording  
 
11. The meeting  will be recorded  in its entirety  via the platform.  The recording  of the meeting  will 
form part of the panel  record. 
 
12. The parties and third parties are strictly prohibited  from:  
 
(1) recording, through  any means, including audio or video recording, or screenshot, the 
meeting or any part thereof;  and 
 
(2) permitting any non -participant to record, through  any mean s, including audio or video 
recording, or screenshot, the meeting or any part  thereof.  
 
Access to the virtual meeting room  
 
13. The participants shall access the virtual meeting room remotely in accordance with these 
Additional Working Procedures.  
 
14. (1) The host will invite remote participants via email to join the virtual meeting  room.  
 
(2)  For security  reasons,  access  to the virtual  meeting  will be password -protected  and 
limited to participants. Participants shall not forward or share the virtual meeting link or 
password with unauthorized  persons.  
 
(3) Each party and third party shall ensure that only participants from its delegation join 
the virtual meeting  room.  
 
Advance log -on 
 
15. (1) The virtual meeting room will be accessible 60 minut es in advance of the scheduled 
start time of the  meeting.  
 
(2) In order to ensure that the meeting will start as scheduled, participants accessing the 
meeting remotely must login to the platform at least 30 minutes in advance of the scheduled 
start time of  the meeting.  
 
(3) Participants accessing the meeting remotely will be placed in a virtual lobby where they 
will remain until the Panel is ready to start the meeting, at which time the host will admit 
them to the  meeting.  
 WT/DS597/R/Add.1  
 
- 15 - 
 
  Document sharing  
 
16. (1) Before each party or third party takes the floor, it shall provide the Panel and other 
participants at the meeting with a provisional written version of its statement through  DORA.  
 
(2) Any participant  wishing  to share  a document  with the other  participants  during  the 
meeting will do so through  DORA , before first referring to such document at the meeting . 
 
Communication breakdown  
 
17. Each party  and third party will designate  a contact  person  who can liaise with the host during 
the course of the meeting to report any technical issues that arise with respect to the platform. The  
parties  and third parties  shall immediately  notify  the Panel  of any technical  or connectivity  issues 
affecting  the participation  of their delegation,  or a member  of their delegation,  in the meeting.  To 
do so, the party or third party that experiences the technical or connectivity issue  shall:  
 
(1) if possible, immediately intervene at the meeting and briefly state the nature of the 
issue experienced;  or 
 
(2) if doing  so is not possible,  immediately  contact  the host and explain  the nature  of the 
issue experienced. The host can be contacted via the platform, by sending an email to 
***.*** @wto.org, or by calling at +41 22 739 5103. 
 
18. The Panel may postpone the proceedi ngs until the technical issue is resolved or continue the 
proceedings  with those  that continue  to be connected  or are physically  present  in the meeting  room 
at the  WTO.  
 
Pauses for internal coordination and consultation  
 
19. The Panel may briefly pause a session at any time, at its own initiative or upon request by a 
party, to enable any necessary internal coordination and consultation within a party's delegation 
and/or among the panelists.  
 
Participation  
 
20. If a remote participant wishes to take  the floor, such participant should use the "raise a hand" 
function in the platform, so that the Panel can give the floor to the participant and allow the 
participant to unmute their microphone and turn their camera on.  
 
Relationship with the Working Proce dures of the Panel adopted on 21 May 2021 
 
21. These Additional Working Procedures complement the Working Procedures of the Panel 
adopted on 21 May 2021 . To the extent that these Additional Working Procedures conflict with the 
Working Procedures of the Panel, these Additional Working Procedures shall  prevail.   
  WT/DS 597/R/Add.1  
 
- 16 - UNITED STATES — ORIGIN MARKING REQUIREMENT  (DS597)   
 
MEETING NAME AND DATE  
DELEGATION LIST OF [MEMBER]  
 
Full name  Position / Title  Email address  Phone number where the 
participant can be reached on 
meeting day  Whether the 
participant plans 
to attend the 
virtual meeting 
remotely or from 
the WTO premises  
     
     
     
     
     
     
     
 
Using boldface, please indicate who on the above list will deliver statements and/or is likely to take the floor during the meeting.  
 
Name of contact person who will serve as the contact person to liaise with the host on technical issues:  
 
_______________  WT/DS597/R/Add.1  
 
- 17 - 
 
  ANNEX  B 
ARGUMENTS OF THE PARTIES  
Contents  Page  
Annex  B-1 Integrated executive summary of the arguments of Hong Kong, China  18 
Annex  B-2 Integrated executive summary of the arguments of the United States  39 
 
 WT/DS597/R/Add.1  
 
- 18 - 
 
  ANNEX B -1 
INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF HONG KONG, CHINA  
I. HONG KONG CHINA'S FIRST WRITTEN SUBMISSION  
A. Introduction  
1. This is a legal dispute concerning country of origin marking requirements arising principally 
under the Agreement on Rules of Origin ("ARO") and the Agreement on Technical Barriers to Trad e 
("TBT Agreement").  The measures at issue in this dispute involve a determination by the United 
States that goods indisputably manufactured or processed within the customs territory of 
Hong Kong,  China originate within the People's Republic of China, a d ifferent World Trade 
Organization ("WTO") Member, and require these goods to be marked to indicate this origin.  
2. Section  304(a) of the Tariff Act of 1930, 19 U.S.C. § 1304, requires goods imported into the 
United States to be marked with their country of or igin.  U.S. Customs and Border Protection 
("USCBP") is responsible for implementing section 304 of the Tariff Act of 1930.  Part  134 of USCBP's 
regulations, 19  C.F.R. Part  134, prescribes detailed rules concerning compliance with the origin 
marking require ment.1  Through its regulations, USCBP has defined the term "country of origin" for 
the purpose of section 304 as "the country of manufacture, production, or growth of any article of 
foreign origin entering the United States".2  The definition additional ly provides that "[f]urther work 
or material added to an article in another country must effect a substantial transformation in order 
to render such other country the 'country of origin'".3  Thus, the "country of origin" for the purpose 
of the origin mark ing requirement is the country in which the imported article was manufactured, 
produced, or grown, or the country in which the article underwent a substantial transformation.  
3. For the purpose of the origin marking requirement, USCBP has consistently treated  Hong 
Kong, China as a "country of origin".4  Such treatment of Hong  Kong,  China by USCBP for customs 
and origin marking purposes is consistent with the fact that Hong  Kong,  China is a separate customs 
territory and as such falls within the scope of "country" for the purposes of the WTO covered 
agreements and is thus a distinct country of origin from which goods may originate under the rules 
prescribed by the ARO (and for all purposes under the WTO covered agreements for which a 
determination of origin is required).  
4. With regard  to the specific words used on an imported article to indicate its country of origin, 
USCBP's regulations provide that "the markings required by this part shall include the full English 
name of the country of origin, unless another marking to indicate the English name of the cou ntry 
of origin is specifically authorized by the Commissioner of Customs".5  Abbreviations which 
"unmistakably indicate the name of a country" are acceptable, as are alternative spellings "which 
clearly indicate the English name of the country of origin".6  Under section 304 of the Tariff Act of 
1930 and USCBP's regulations, imported articles not marked as required by law are subject to 
additional duties of 10  percent, assessed on top of other duties that may apply.7 
5. On 11 August 2020, USCBP published a Federal Register notice indicating that, after 25 
September 2020, imported goods manufactured or produced in Hong  Kong must be marked to 
indicate that their origin is "China".8  By subsequent notice, USCBP extended the date for compliance 
 
1 19 C.F.R. Part  134 (Exh.  HKG-3). 
2 19 C.F.R. § 134.1(b) (Exh.  HKG-3). 
3 19 C.F.R. § 134.1(b) (Exh.  HKG-3). 
4 See 19 C.F.R. § 134.1(a) (Exh.  HKG-3).  See also, e.g. USCBP Ruling Letter HQ 731701 Re: Country 
of Origin Marking of Childrens' Computer Games (26 January 1990) (Exh.  HKG-4); USCBP Ruling Letter HQ 
560337 Re: Country of origin marking for products of Hong  Kong imported on or after July 1 , 1997 (27 June 
1997) (Exh.  HKG-5). 
5 19 C.F.R. § 134.45(a)(1) (Exh.  HKG-3). 
6 19 C.F.R § 134.45(b) (Exh.  HKG-3). 
7 See 19 U.S.C. § 1304(i) (Exh.  HKG-2); 19 C.F.R. § 134.2 (Exh.  HKG-3). 
8 85 Fed. Reg. 48551 (11 August 2020) ("August 11 Federal Register not ice") (Exh.  HKG-10). WT/DS597/R/Add.1  
 
- 19 - 
 
  with this requir ement to 10  November 2020.9  USCBP has rejected any use of the words "Hong  Kong" 
in the required mark of origin after 9 November 2020 (including "Hong  Kong,  China").  Thus, the 
United States now requires a mark of origin ("China") that it previously rejec ted in the case of goods 
manufactured or produced in Hong  Kong, China, while rejecting the use of a mark of origin 
("Hong  Kong") that it previously required as the exclusive mark of origin for such goods.  
6. USCBP issued  the August 11 Federal Register notice under the authority of Executive Order 
13936, issued by former U.S. President Donald J. Trump on 14  July 2020.10  Under section 201(a) 
of the United States -Hong Kong Policy Act of 1992, the laws of the United States apply to 
Hong Kong,  China in the same ma nner that those laws applied to Hong  Kong prior to the resumption 
of the exercise of sovereignty over Hong  Kong by the People's Republic of China on 1 July 1997.11  
Under section  202(a) of that Act, the U.S. President can suspend the application of section  201(a) if 
the President "determines that Hong  Kong is not sufficiently autonomous to justify treatment under 
a particular law of the United States, or any provision thereof, different from that accorded the 
People's Republic of China".12  Executive Order 13936 contains a finding that Hong  Kong,  China is 
not "sufficiently autonomous" in the view of the United States and suspends the application of 
section  201(a) to a number of U.S. laws, including the origin marking requirement set forth in 
section  304 of t he Tariff Act of 1930.  
7. Section  304 of the Tariff Act of 1930, Part  134 of the USCBP's regulations, the United States -
Hong Kong Policy Act of 1992, Executive Order 13936, and the August 11 Federal Register notice 
interacted with each other as described abov e to create the present circumstance in which the United 
States: (i) concludes, for the purpose of its origin marking requirement, that the People's Republic 
of China is the country of origin of goods manufactured or produced i n the customs territory of 
Hong Kong,  China; and (ii) requires goods imported from the customs territory of Hong  Kong,  China 
to be marked with this country of origin determination.  Hong  Kong,  China will refer to this conclusion 
and requirement as, collectively, "the revised origin ma rking requirement".  
B. The Revised Origin Marking Requirement Is Inconsistent with the ARO  
 
8. Article  1.1 of the ARO defines "rules of origin" as "those laws, regulations and administrative 
determinations of general application applied by any Member to determine the country of origin  of 
goods".13  Article  1.2 elaborates upon this definition by stating that "rules of origin" include all rules 
of origin used in, inter alia , "origin marking requirements under Article  IX of GATT 1994".  
9. It follows from these definitional elements that: (i) origin marking requirements involve laws, 
regulations and administrative determinations of general application applied by a Member to 
determ ine the country of origin of goods; and (ii) the requirement to mark a good with a particular 
country of origin is a "determination concerning the country of origin" of that good, i.e. that the 
origin mark required by an importing Member indicates that Mem ber's determination concerning the 
country of origin of the good.  Any such determination must be made in accordance with the 
requirements of the ARO.  
10. The first explanatory note to the Marrakesh Agreement Establishing the World Trade 
Organization ("WTO Agr eement") explains that "[t]he terms 'country' or 'countries' as used in this 
Agreement and the Multilateral Trade Agreements are to be understood to include any separate 
customs territory Member of the WTO."  The ARO is one of the Multilateral Agreements o n Trade in 
Goods contained in Annex 1A to the WTO Agreement.  Thus, where the ARO uses the term "country", 
including in the phrase "country of origin", that term includes Hong  Kong,  China as a separate 
customs territory Member of the WTO.  
 
i. The Revised O rigin Marking Requirement Is Inconsistent with Article 2(c) of the 
ARO 
 
9 See USCBP, CSMS #43729326 – GUIDANCE: Additional 45 -day Compliance Period for Executive Order 
13936 – Hong Kong Normalization (21 August 2020) (Exh.  HKG-11). 
10 See The President's Executive Order on Hong  Kong Normalization, 85 Fed. R eg. 43413 (17  July 2020) 
("Executive Order 13936") (Exh.  HKG-13). 
11 See United States -Hong Kong Policy Act of 1992 (5 October 1992), Section 201(a) (Exh.  HKG-14). 
12 United States -Hong Kong Policy Act of 1992 (5 October 1992), Section 202(a) (Exh.  HKG-14). 
13 Emphasis added.  WT/DS597/R/Add.1  
 
- 20 - 
 
   
11. Under Article  2(c), a Member may not condition the conferral of a particular country of origin 
as indicated in a mark of origin upon conditions unrelated to manufacturing or processing .  The 
revised origin marking requirement imposes a condition "not related to manufacturing or processing" 
as a prerequisite for the determination that an imported good is of Hong  Kong,  China origin.  The 
conditions that the United States imposes for this purpose under the United States -Hong Kong Policy 
Act of 1992 are political conditions subjectively determined by the United States, not conditions 
related to manufacturing or processing.  Executive Order 13936 relied upon section 202 of the United 
States -Hong Kong Policy Act of 1992 to suspend the ordinary operation of the origin marking 
requirement to goods produced in Hong Kong.  Nothing in the August 11 Federal Register notice, or 
elsewhere in the relevant measures, relates to the manufacturing or proces sing of goods within the 
customs territory of Hong  Kong,  China.   
12. These considerations further demonstrate that the "sufficient autonomy" condition is a rule of 
origin, i.e. it is a law or regulation of general application applied by the United States to d etermine 
the country of origin of certain goods.  The "sufficient autonomy" condition set forth in the United 
States -Hong Kong Policy Act of 1992, while applying only to goods imported from Hong  Kong,  China, 
is of "general application" because it affects a n unidentified number of economic operators and is 
not addressed to a specific company or transaction.14  This condition "is applied … to determine the 
country of origin of goods" because it was the finding of an alleged absence of "sufficient autonomy" 
that required USCBP to determine, for origin marking purposes, that the country of origin of goods 
importe d from Hong  Kong,  China is the People's Republic of China.  The requirement of "sufficient 
autonomy" is a "condition not related to manufacturing or processing" that the United States has 
imposed as a prerequisite for "a qualifying good to be accorded the origin of a particular country", 
namely as a prerequisite for according the origin of Hong  Kong,  China to goods manufactured or 
processed in the customs territory of Hong  Kong,  China.  
13. This imposition of a condition unrelated to manufacturing or processing as a prerequisite for 
a determination of the country of origin is inconsistent with Article  2(c) of the ARO.  For the same 
reason, the requirement to mark goods manufactured or processed in Hong  Kong,  China as goods 
of "China" origin is inconsistent with A rticle 2(c) because it incorrectly indicates the country of origin 
of these articles when considerations relating exclusively to manufacturing or processing are taken 
into account.15 
ii. The Revised Origin Marking Requirement Is Inconsistent with Article  2(d) of the 
ARO 
 
14. Article  2(d) of the ARO provides, in relevant part, that "the rules of origin that [Members] 
apply to imports … shall not discriminate between other Members".  Article  2(d) requires importing 
Members to apply the same  rules of origin to goo ds imported from any Member.  Under U.S. law, 
the United States applies a condition to goods imported from the customs territory of Hong Kong, 
China – the condition of "sufficient autonomy" from the People's Republic of China, as assessed by 
the United Sta tes – to determine the country of origin of goods imported from that customs territory.  
The United States does not apply this same condition to goods imported from other Members.  The 
United States therefore "discriminate[s] between other Members" in resp ect of the rules of origin 
that the United States applies to imports, in contravention of Article 2(d).  
 
14 Appellate Body Report, EC – Poultry , para. 113.  See also Appellate Body Report, US – Underwear , p. 
21; Panel Report, Thailand – Cigarettes (Philippines) , para. 7.773; Panel Report, EC – Selected Customs 
Matters , para. 7.116.  
15 Hong Kong, China notes that USCBP has rejected a request by Hong  Kong enterprises to mark their 
products as goods of "Hong  Kong, China" origin under the revised origin marking requirement (as compared to 
the "Hong  Kong" marking previously required under U .S. law).  The enterprises submitting this request 
explained that their products are produced in Hong  Kong and that using the words "Hong  Kong, China" to mark 
their products would therefore be consistent with 19  U.S.C.  1304 and 19  C.F.R. Part 134.  USCBP r ejected 
"Hong  Kong, China" as well as any variation that includes the words "Hong  Kong" on the grounds that "[t]he 
reference to Hong  Kong under the current policy may mislead or deceive the ultimate purchaser as to the 
actual country of origin of the artic le". WT/DS597/R/Add.1  
 
- 21 - 
 
  C. The Revised Origin Marking Requirement Is Inconsistent with Article 2.1 of the 
TBT Agreement  
 
15. The U.S. origin marking requirement, as applied to goo ds of Hong Kong, China origin under 
the revised origin marking requirement, is a "technical regulation" within the meaning of Annex 1, 
paragraph 1, of the TBT Agreement.  The requirement to mark an imported product with its country 
of origin is a "marking … requirement" that "appl[ies] to a product".  The U.S. origin marking 
requirement as set forth in section 304 of the Tariff Act of 1930 and Part  134 of USCBP's regulations, 
as well as rulings and notices relating thereto, is therefore a "technical regulat ion" that falls within 
the scope of the TBT Agreement.  
16. A party asserting a claim under Article  2.1 of the TBT Agreement must demonstrate that (i) 
the imported products in question are like the products of national origin or the products of other 
origins; a nd (ii) the treatment accorded to products imported from the complaining Member is less 
favourable than that accorded to like products of national origin or like products originating in other 
Members (and non -Members).16 
17. The measures at issue draw a de jur e distinction between goods imported from Hong Kong, 
China and goods originating in other Members (and non -Members).  The United States applies an 
additional requirement in the case of goods imported from the customs territory of Hong  Kong,  China 
– the req uirement of "sufficient autonomy" from the People's Republic of China, as assessed by the 
United States – that the United States does not apply to goods originating in other Members (and 
non-Members).  The United States has applied that condition to determ ine that goods imported from 
the customs territory of Hong  Kong,  China have an origin of the People's Republic of China, and 
consequently requires goods imported from Hong  Kong,  China to be marked as goods of "China".  
The United States has expressly rejec ted marking goods imported from Hong  Kong,  China as goods 
of "Hong  Kong,  China" origin, which is the full English name of the customs territory in which the 
goods originate.  Because this de jure difference in regulatory treatment is based on the origin of 
the goods rather than any characteristic(s) of the goods themselves, the presumption of likeness is 
established.17 
18. There is often considerable brand and reputational value to be derived from marking a product 
as one having the origin of a particu lar Member.  Annex A of Hong Kong, China's first written 
submission provides some examples of Hong Kong, China enterprises that export goods to the United 
States whose brand and reputational values are inextricably linked to the fact they are of Hong Kong,  
China origin.  By depriving these exporters and others like them of the ability to mark their products 
as products of Hong  Kong,  China origin, the origin marking requirement as applied by the United 
States modifies the conditions of competition in the U.S . market to the detriment of goods imported 
from Hong  Kong,  China vis -à-vis the treatment accorded to like products originating in other 
Members (and non -Members).  The requirement to mark goods exported from Hong Kong, China as 
having an origin of "China"  when destined for the United States has also increased the cost and 
complexity of exportation for Hong Kong enterprises.  Finally, the inaccurate marking of the customs 
origin of a good is liable to cause confusion and potential error in the regulatory tr eatment of that 
good, and in fact has had those effects as detailed in Annex A of Hong Kong, China 's first written 
submission.  
19. For these reasons, the U.S. origin marking requirement, as applied to goods of 
Hong Kong,  China origin under the revised origin m arking requirement, is a technical regulation that 
accords less favourable treatment to goods imported from Hong  Kong,  China as compared to the 
treatment accorded to like products originating in other Members (and non -Members).  It is therefore 
inconsisten t with Article  2.1 of the TBT Agreement.  
 
16 See e.g. Appellate Body Report, US – Tuna II (Mexico) , para. 202.  
17 With regard to the requirement of likeness, it is well established that "when origin is the sole criterion 
distinguishing the products", it is "sufficient for a complainant to demon strate that there can or will be 
domestic and imported products that are 'like'".  Panel Report, US – Poultry (China) , paras. 7.424 -7.429.  The 
Appellate Body has observed that "measures allowing the application of a presumption of 'likeness' will 
typicall y be measures involving a de jure distinction between products of different origin."  Appellate Body, 
Argentina – Financial Services , para. 6.36.  WT/DS597/R/Add.1  
 
- 22 - 
 
  D. Claims Under the GATT 1994  
 
20. Hong Kong, China believes that the Panel must begin its analysis with Hong Kong, China's 
claims under the ARO, followed by its claims under the TBT Agreement and only then the General 
Agreement on Tariffs and Trade 1994 ("GATT 1994").  Hong Kong, China requests that the Panel 
address its claims under the GATT 1994 only in the event that the Panel finds, for whatever reason, 
that the measures at issue are not inconsistent with bo th the ARO and the TBT Agreement.  
i. The Measures at Issue Are Inconsistent with Article  IX:1 of the GATT  1994 
 
21. The measures at issue are inconsistent with Article  IX:1 of the GATT 1994 for the same 
essential reasons that they are inconsistent with the Mos t-Favoured -Nation ("MFN") treatment 
obligation contained in Article  2.1 of the TBT Agreement.  First, the requirement of likeness is 
satisfied because the measures at issue discriminate exclusively on the basis of origin and there can 
or will be products i mported from other Members that are like those imported from 
Hong Kong,  China.  Second, the measures at issue accord less favourable treatment to goods of 
Hong Kong,  China in respect of marking requirements because the United States does not determine 
the country of origin of goods imported from Hong  Kong,  China in the same manner that it 
determines the country of origin of like products imported from other Members, with the result that 
goods imported from Hong  Kong,  China may not be marked with the full En glish name of their actual 
country of origin.  For these reasons, the measures at issue are inconsistent with Article  IX:1 of the 
GATT 1994.  
ii. The Measures at Issue Are Inconsistent with Article  I:1 of the GATT  1994 
 
22. Origin marking requirements are clear ly a "rule" or "formality" "in connection with 
importation".  The requirement of likeness is satisfied because the measures at issue discriminate 
exclusively on the basis of origin and there can or will be products imported from other Members 
that are like  those imported from Hong  Kong,  China.  
23. For the reasons that Hong  Kong,  China explained in relation to Article  2.1 of the TBT 
Agreement and Article  IX:1 of the GATT 1994, it is an "advantage" for enterprises to be able to mark 
their goods with a single mark  of origin using the English name of the actual country of origin.  It is 
also an "advantage" for Members and their enterprises to be able to mark a product with its correct  
country of origin, i.e. the country of origin that results from the proper applica tion of the rules of 
origin set forth in the ARO, including the requirement that any determination of origin must be based 
exclusively on considerations relating to where a good was manufactured or processed.  
24. The United States has not extended these advant ages "immediately and unconditionally" to 
like products originating in the customs territory of Hong  Kong,  China.  In particular, the United 
States has denied Hong  Kong,  China enterprises the advantage of marking their products with the 
English name of the  actual country of origin on the grounds that, in the view of the United States, 
Hong Kong, China lacks "sufficient autonomy" from the People's Republic of China.  For these 
reasons, the measures at issue are inconsistent with Article  I:1 of the GATT 1994.  
II. HONG KONG CHINA'S OPENING STATEMENT AT THE FIRST SUBSTANTIVE MEETING 
OF THE PANEL  
 
25. The only defence that the United States has put up is what we would call a ''double maximalist'' 
position, that is – Article XXI of the GATT 1994 is applicable to all o f the multilateral agreements on 
trade in goods under the WTO Agreement (referred to as the "Annex 1A Agreements" below, which 
include the ARO and the TBT Agreement) and is self -judging in its entirety.  This ''double maximalist'' 
defence is erroneous from  a treaty interpretation perspective and is one that is doomed to fail.  
26. The United States suggests two arguments to support its contention that Article  XXI of the 
GATT 1994 applies to the ARO and the TBT Agreement.  First, the United States contends that 
Article XXI applies to all of the Annex 1A agreements merely by virtue of the fact that all of the 
Annex 1A agreements relate in some way to trade in goods.18 
 
18 See United States' first written submission, paras. 268 -279; 297.  WT/DS597/R/Add.1  
 
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  27. The essence of the United States' argument is that Article  XXI of the GATT 1994 must apply 
to the other Annex  1A agreements because, in the United States' view, it would not make any sense 
for the security exception to apply to the "general agreement" on trade in goods but not to the more 
specific agreements on trade in goods.19  What the United States' submission overlooks is the fact 
that each of the more specific agreements on trade in goods reflects a carefully negotiated balance 
of rights and obligations pertaining to the subject matter of each agreement.  In some cases the 
Members chose to incorporate some or all of the GATT exceptions into that balance, and in other 
cases they did not.  To conclude that the GATT exceptions apply to all of the Annex 1A agreements 
whether or not they incorporate those exceptions would upend t he balance that the Members struck 
in the context of each agreement.  The Panel must reject this proposition.  
28. Evidently aware that its maximalist position has no interpretive support, the United States 
tries its hand at applying the interpretive principles  that prior panel and Appellate Body reports20 
have used to determine whether a GATT exception applies to a different covered agreement, and 
argues on this basis that Article  XXI of the GATT 1994 applies to the ARO and the TBT Agreement.  
The only two case s in which a GATT exception has been found to apply to other WTO legal 
instruments were cases involving Protocols of Accession, not another Annex 1A agreement.  No 
similar textual linkages as found in the two cases involving the Protocols of Accession are present in 
this case.  Given that the drafters of the Uruguay Round agreements knew how to, and indeed did 
incorporate one or both of the GATT exceptions when they considered it appropriate, as discussed 
above, it is difficult to envision the circumstance in which it would be appropriate to conclude as an 
interpretive matter that the drafters of an Annex 1A agreement incorporated one or both of the 
GATT exceptions merely by implication . 
29. In sum, there is no credible argument that Article  XXI of the GATT 1994  applies to the ARO 
or the TBT Agreement.  Hong  Kong,  China has demonstrated, and the United States has not 
disputed, that the measures at issue in this dispute are inconsistent with the ARO and the TBT 
Agreement.  The Panel should therefore find that the challenged measures are inconsistent with the 
ARO and the TBT Agreement and exercise judicial economy in respect of Hong  Kong,  China's claims 
under the GATT 1994.  This resolution of the matter would achieve a satisfactory resolution to the 
dispute and obv iate the need for the Panel to interpret and apply Article  XXI of the GATT 1994, other 
than as necessary to conclude that it does not apply to the ARO or the TBT Agreement.  
30. Hong Kong, China will therefore not devote a significant amount of time in the firs t substantive 
meeting to rebutting the United States' erroneous contention that Article XXI(b) of the GATT 1994 
is "self -judging" in its entirety.  The fundamental problem with the United States' interpretation of 
Article  XXI(b) remains what it has always been – the United States' failure to give meaning and 
effect to the subparagraphs of that provision.  Like their counterparts in Article  XX of the GATT 1994, 
the subparagraphs of Article  XXI(b) define the specific circumstances in which the exception can b e 
invoked.  In other words, they serve to limit the subject matter applicability of Article  XXI(b) to the 
three circumstances therein enumerated.  The United States engages in syntactic contortions to try 
to place the subparagraphs within the portion of Ar ticle XXI(b) which is committed to the invoking 
Member's discretion, subject to the obligation of good faith.  But if the applicability of the 
subparagraphs to a particular action for which justification is sought were committed to the invoking 
Member's di scretion, then one may justifiably ask what purpose would those subparagraphs serve?  
The meaning and effect of Article  XXI(b) would be exactly the same as if the subparagraphs did not 
exist, in contravention of the principle of effective treaty interpreta tion. 
31. Properly interpreted, each of the subparagraphs of Article  XXI(b) modifies the term "action" 
in the chapeau to this provision.  The United States is forced to concede this point in the case of the 
third subparagraph, which, as a matter of English gra mmar, can only modify the term "action".  The 
fact that each of the subparagraphs of Article  XXI(b) modifies the term "action" is confirmed by the 
equally authentic Spanish text, which, due to the gender agreement of the word "relativas" with the 
word "med idas", leaves no possible doubt that each of the subparagraphs of Article  XXI(b) modifies 
the term "action" in the English text.  It is therefore apparent that each of the subparagraphs of 
Article  XXI(b) forms a noun phrase with the term "action" in the ch apeau, serving to define the three 
exclusive types of "actions" for which justification may be sought under this exception.  Whether or 
 
19 United States' first written submission , paras.  273-279. 
20 See Appellate Body Report, China – Rare Earths , para. 5.74.  WT/DS597/R/Add.1  
 
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  not an "action" for which justification is sought is one of these three types is a question that is 
objectively reviewab le by a panel in dispute settlement.  
32. Under the chapeau to Article  XXI(b), what a Member is allowed to "consider" in its own 
judgment, subject to the obligation of good faith, is the necessity of a particular action for the 
protection of its essential secur ity interests.  This is an issue that comes after it is properly 
determined that the action for which justification is sought is one that falls within the scope of one 
or more of the three subparagraphs.  Under Article  XXI(b), like Article  XX, a Member inv oking this 
exception must first demonstrate the prima facie  subject matter applicability of one or more of the 
subparagraphs.  Only then does it become necessary for a panel to evaluate the conformity of the 
measure with the requirements of the chapeau.  
33. In its first written submission, the United States has not identified which of the three 
subparagraphs of Article  XXI(b) it considers applicable to the GATT -inconsistent actions for which it 
seeks justification in this dispute, let alone established a prima facie case of the applicability of that 
subparagraph.  Unless and until the United States demonstrates the objective applicability of one or 
more of the subparagraphs to the measures at issue, no purpose would be served by evaluating the 
conformity of thos e measures with the requirements of the chapeau.  At this stage, 
Hong Kong,  China will merely observe that it does not perceive any relationship, let alone a 
minimally plausible relationship, between any "essential security interests" of the United States and 
a requirement to mark goods of Hong  Kong,  China origin incorrectly as goods that originate within 
the customs territory of a different WTO Member.  
34. For these reasons, even if it were necessary for the Panel to interpret and apply Article  XXI(b) 
of the G ATT 1994 in order to resolve this dispute, the United States has failed to demonstrate the 
conformity of the measures at issue with the requirements of that exception.  Most importantly, the 
United States has failed to demonstrate the objective applicabili ty of any of the three subparagraphs 
of that exception to the challenged measures.  The United States has therefore failed to sustain its 
burden of proof as the party invoking the exception.  
III. HONG KONG, CHINA'S RESPONSES TO QUESTIONS FROM THE PANEL AFTER THE 
FIRST SUBSTANTIVE MEETING  
 
Excerpt from Hong Kong, China's Response to Panel Question No. 5.  
 
35. …  It is the prior country of origin determination that establishes the name of the country with 
which a good must be marked.  Were that not the c ase, the ARO would not in any meaningful sense 
apply to rules of origin used in the application of origin marking requirements, contrary to the 
express text of Article 1.2. …  
36. The United States has recognized that marks of origin necessarily involve a prior  determination 
of the country of origin of a good.  The U.S. International Trade Commission ("USITC") has explained 
in the context of origin marking requirements that "the origin determination is used to establish the 
name of the country that must be marke d on an imported article ".21  As this explanation makes 
clear, the country applying the origin marking requirement must first determine the country of origin 
of the good, and that determination in turn "establish[es] the name of the country that must be 
marked" on the imported article.  In other words, the requirement to mark an imported article with 
the name of a particular country is the result of a prior country of origin determination.   
37. Consistent with this fact, the United States has previously notifi ed its origin marking measures 
to the Committee on Rules of Origin, as required by Article 5.1 of the ARO.  …  For these reasons, 
and as explained further below, a requirement to mark an imported good with the name of a 
particular country necessarily invol ves a prior determination that that country is the country of origin 
as determined in accordance with the rules of the ARO. …  
Excerpt from Hong Kong, China's Response to Panel Question No. 6.  
 
38. It is self-evident that for the ARO to apply to origin marking requirements, as provided for in 
Article 1.2, there must be a correspondence between the country of origin of a good, properly 
 
21 U.S. International Trade Commission, "Country -of-Origin Marking: Review of Laws, Regulations, and 
Practices" (USITC Pub. No. 2975) (July 1996), p. 2 -1 (Exh. HKG-21) (emphasis  added).  WT/DS597/R/Add.1  
 
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  determined in accordance with the rules of the ARO, and the specific country of origin mark that an 
importing Member requires that good to bear.  As the USITC has correctly and succinctly explained, 
rules of origin are used in the application of origin marking requirements "to establish the name of 
the country that must be marked on an imported article".22  It would not be meaningful to say that 
the ARO applies to origin marking requirements if, for example, the rules of the ARO require the 
conclusion that a good is of Canadian origin and yet it were nevertheless permissible for an importing 
Member to require that good to  be marked as a product of the United Kingdom, a different Member.  
The ARO applies to marks of origin precisely so that a required mark of origin correctly indicates the 
customs territory of a Member from which a good originates.  There is no other respec t in which the 
ARO could meaningfully apply to marks of origin.  
Excerpts from Hong Kong, China's Responses to Panel Questions Nos. 15 and 16  
 
39. In relation to the present dispute, the parties agree that where the distinction at issue is 
origin -based, there i s no need for a panel to evaluate whether any detrimental impact on imports 
stems exclusively from a legitimate regulatory distinction.  In cases where there is a de jure origin -
based distinction, the fact that there is discrimination against imported prod ucts is evident on the 
face of the measure, and so there is no need for additional analysis.  This is such a case: where the 
de jure discriminatory measures at issue apply to all products originated in the customs territory of 
Hong Kong, China.  
40. Setting asi de the parties' agreement that no "second step" is required in cases of origin -based 
distinction, Hong Kong, China notes in relation to the Panel's question that the burden would be on 
the United States to articulate its essential security interests in the  first instance.  In no event would 
it be possible to take into account a Member's essential security interests if the Member does not 
articulate what those interests are. …  
Excerpt from Hong Kong, China's Response to Panel Question No. 27  
 
41. The United Stat es has provided no interpretative basis for its assertion that an exception 
available under one agreement must be available for "the same" violation under another agreement.  
As Hong Kong, China has explained, the drafters of the Annex 1A agreements made c lear choices 
about when certain exceptions would or would not be available under each of those agreements, 
and those choices must be given effect regardless of whether a claim under an agreement other 
than the GATT 1994 might in some sense be considered "t he same" as a claim under the GATT 1994.  
But in any event, Hong Kong, China's claims under the ARO and the TBT Agreement are not "the 
same" as its claims under the GATT 1994.  Thus, even if the U.S. position had any interpretative 
basis, which it does not , the premise of the U.S. position is mistaken.  
Excerpt from Hong Kong, China's Response to Panel Question No. 44  
 
42. As the panel in the Russia – Traffic in Transit  dispute correctly found, although the invoking 
Member retains the discretion to determine th e necessity of the measure at issue and to define for 
itself what it considers to be its essential security interests,23 this does not mean, that the invoking 
Member is free to label any interest an "essential security interest".24  Nor does it mean that the 
invoking Member is free to assert that any measure, however remote from the proffered essential 
security interest, is  a measure protective of that interest.25  These limitations reflect the fact that 
the entirety of the adjectival clause is subject to the overarching obligation of good faith.  Thus, the 
 
22 U.S. International Trade Commission, "Country -of-Origin Marking: Review of Laws, Regulations, and 
Practices" (USITC Pub. No. 2975) (July 1996), p. 2 -1 (Exh. HKG-21). 
23 Panel Report, Russia – Traffic in Transit , para. 7.131.  
24 Panel Report, Russia – Traffic in Transit , paras. 7.131 and 7.132 ("For these reasons, it is left, in 
general, to every Member to define what it considers to be its essential security interests. However, this does 
not mean that a Member is free to elevate any concern to that of an 'es sential security interest'.  Rather, the 
discretion of a Member to designate particular concerns as 'essential security interests' is limited by its 
obligation to interpret and apply Article XXI(b)(iii) of the GATT 1994 in good faith.").  
25 Panel Report, Russia – Traffic in Transit , paras. 7.138 and 7.139 ("The obligation of good faith … 
applies not only to the Member's definition of the essential security interests said to arise from the particular 
emergency in international relations, but also, and most im portantly, to their connection with the measures at 
issue.  Thus, as concerns the application of Article XXI(b)(iii), this obligation is crystallized in demanding that 
the measures at issue meet a minimum requirement of plausibility in relation to the prof fered essential security 
interests, i.e. that they are not implausible as measures protective of these interests.").  WT/DS597/R/Add.1  
 
- 26 - 
 
  legal effect of the phrase "which it considers" does not require com plete and total deference to the 
respondent's assertion that an action is necessary for the protection of its essential security interests.  
Rather, the invoking Member's asserted essential security interests and the relationship between 
those interests an d the measures at issue are subject to review by a panel for the limited purpose 
of evaluating whether the Member has acted in good faith.  
IV. HONG KONG CHINA'S SECOND WRITTEN SUBMISSION  
 
A. The ARO Requires Members to Determine the Country of Origin of Go ods in 
Accordance with the ARO -Compliant Rules of Origin and to Treat Imported 
Goods in Accordance with Their Origin, Properly Determined  
 
43. Article  1.1 of the ARO defines "rules of origin" as "laws, regulations and administrative 
determinations of general application applied by any Member to determine the country of origin  of 
goods".  Article 1.2 of the ARO further provides that "[r]ules of origin … shall include all rules of 
origin used in non -preferential commercial policy instruments", and then proceeds to provide five 
examples of where rules of origin are used "in the application of" such instruments: (i) MFN 
treatment under the MFN -related provis ions of the GATT 1994; (ii) anti -dumping and countervailing 
duties under Article VI of the GATT 1994; (iii) safeguard measures under Article XIX of the GATT 
1994; (iv) origin marking requirements under Article IX of the GATT 1994; and (v) "any 
discriminato ry restrictions or tariff quotas".  
44. Turning  to marks of origin – the type of non -preferential commercial policy instrument at issue 
in the present dispute – three things are evident from the ARO's scope of coverage as specified in 
Article 1.2: (i) that ever y mark of origin involves a country of origin determination (i.e. that a mark 
of origin necessarily involves "laws, regulations and administrative determinations of general 
application applied by [a] Member to determine the country of origin of goods"); (i i) that this country 
of origin determination must be made in accordance with ARO -compliant rules of origin; and (iii) 
that the determination of origin made in accordance with ARO -compliant rules of origin must govern 
the actual treatment of the origin of i mported goods for origin marking purposes (i.e. the actual 
origin of the goods, lawfully determined, cannot be disregarded for origin marking purposes).  
45. To be clear, there is scope, albeit not unlimited, under the ARO for a Member to determine 
the terminol ogy used to indicate  the country of origin, once that country of origin is properly 
determined based on the application of ARO -compliant rules of origin.  Moreover, questions of 
terminology come after the importing Member has determined the country of orig in based on the 
application of rules of origin.  Contrary to what the United States suggests in its answers to the 
Panel's questions, the present dispute is not a dispute about terminology.  This is confirmed, inter 
alia, by the fact that the United States  has rejected any mark of origin for goods manufactured or 
processed in Hong Kong, China that includes the words "Hong Kong" on the grounds that such a 
mark would not indicate the "actual country of origin", which the United States considers to be the 
People's Republic of China.  
46. Nor is the present dispute a dispute about the boundaries of the customs territory in which 
particular goods were manufactured or processed.  The United States acknowledges that the revised 
origin marking requirement applies to good s "produced in the geographic region of Hong Kong, 
China".26  The United States further acknowledges that the geographical boundaries of the separate 
customs territory of Hong Kong, China are not in dispute,27 and that the United States continues to 
treat goods manufactured or processed in Hong Kong, China as goods of Hong Kong, China origin 
for all other purposes.28  The United States thereby recognizes that Hong Kong, China is a distinct 
"country of origin" from which goods may originate, that the geograp hical boundaries of the separate 
customs territory of Hong Kong, China are not in dispute, and that the revised origin marking 
requirement applies exclusively to goods produced within those boundaries.  
 
26 United States' response to Panel question Nos. 6 and 7, para. 25.  
27 United States' response to Panel question No. 9(d), para. 38 ("While decisions regarding marking 
could reflect decisions as to territory (for example, the marking permitted with respect to a good produced in a 
disputed territory), the U.S. measures at issue do not themselves address the territorial boundaries of Hong 
Kong, China .") (emphasis added).  
28 United States' response to Panel question No. 3, para. 12 ("The United States confirms that it 
continues to treat goods manufactured, produced, or substantially transformed, in Hong Kong, China, as goods 
originating in Hong Kon g, China, for purposes of determining the applicable tariff rate.").  WT/DS597/R/Add.1  
 
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  B. The Revised Origin Marking Requirement Is Based on a Determination that 
Goods Manufactured or Processed in Hong Kong, China Originate in the 
People's Republic of China  
 
47. The title of the August 11 Federal Register notice is " Country of Origin  Marking of Products of 
Hong Kong".  The notice states that the pu rpose of the document is to "notif[y] the public that … 
goods produced in Hong Kong … must be marked to indicate that their origin is 'China'  for purposes 
of 19 U.S.C. 1304."  As discussed above, section 304(a) (19 U.S.C. § 1304) requires an imported 
good to be marked with "the English name of the country of origin  of the article".29  The requirement 
to mark goods as having an origin of "China", which in U.S. practice refers to the People's Republic 
of China, is therefore a determination by the United State s that the goods to which the August 11 
Federal Register notice applies (i.e. "goods produced in Hong Kong") in fact have an origin of the 
People's Republic of China.  
48. The fact that the revised origin marking requirement entails a determination by the Unite d 
States that goods manufactured or processed in Hong Kong, China have an origin of the People's 
Republic of China is confirmed by the subsequent actions of USCBP.  These actions confirm, 
moreover, that the revised origin marking requirement is not a quest ion of the terminology used to 
indicate the origin of goods made in Hong Kong, China, as the United States implies.  For these 
reasons, the United States' suggestion that this dispute pertains to the terminology used to indicate 
goods having an undisputed origin of Hong Kong, China is disingenuous and contrary to the evidence.  
C. The Revised Origin Marking Requirement Is Governed by the ARO Even Under 
the United States' Mischaracterization of the Measures  
 
49. Notwithstanding the clear and undisputed evidence t o the contrary, the United States contends 
that the present dispute concerns the terminology  used to indicate goods originating in Hong Kong, 
China, which the United States acknowledges as a distinct country of origin under the ARO.  It is 
undisputed in th is regard that a mark of origin of "China" indicates an origin of the People's Republic 
of China.  It is further undisputed that the full English name of the separate customs territory of 
Hong Kong, China is "Hong Kong" or "Hong Kong, China", and that the United States has expressly 
rejected the use of any mark of origin that includes the words "Hong Kong". Thus, according to the 
United States, this dispute concerns whether it is permissible under the ARO for a Member to require 
goods that indisputably orig inate in "Country A" to be marked as goods originating in "Country B".  
50. Hong Kong, China understands why the United States has sought to mischaracterize the 
present dispute in this way.  There is no credible argument that goods manufactured or processed 
in Hong Kong, China have an origin of the People's Republic of China when the requirements of 
Article 2 of the ARO are adhered to.  The United States must further understand that there is no 
basis under the ARO to conclude that the same good may simultaneousl y originate in two different 
countries of origin, which is how the United States presently treats goods manufactured or processed 
in Hong Kong, China.  A determination that goods manufactured or processed in Hong Kong, China 
have an origin of the People's Republic of China is obviously inconsistent with the rules of the ARO.  
51. While Hong Kong, China welcomes the United States' recognition that goods manufactured or 
processed in Hong Kong, China have an origin of Hong Kong, China, the United States is mistaken  
that the ARO does not prohibit a Member from requiring goods originating in Country A to be marked 
as goods that originate in Country B.  The ARO requires Members to make these country of origin 
determinations in accordance with ARO -compliant rules of ori gin, and to treat the origin of goods in 
practice in accordance with a lawful country of origin determination.  It follows that where a Member 
treats a good in practice as having the origin of a particular country, that treatment is necessarily 
based on a determination by that Member that the goods in question originate within that particular 
country.  
52. If the ARO did not govern how Members treat the origin of goods in practice, the ARO would 
impose no meaningful or effective disciplines upon the application of rules of origin to non -
preferential commercial policy instruments, which is the entire subject matter of the agreement.  
Through the simple expedient of avoiding a formal country of origin determination, or even denying 
that a country of origin determin ation has been made when such a determination has in fact been 
made, a Member could free itself from any obligation to treat the origin of goods in accordance with 
 
29 See August 11 Federal Register notice (Exh.  HKG-10) (emphasis added).  WT/DS597/R/Add.1  
 
- 28 - 
 
  the rules prescribed by the ARO.  The ARO would become a purely theoretical agreement having  no 
practical effect upon the application of non -preferential commercial policy instruments.  Such an 
interpretation would do more than "reduc[e] whole clauses or paragraphs of a treaty to redundancy 
or inutility"30 – it would reduce the entire agreement  to inutility because the agreement would no 
longer discipline the actual conduct of Members in relation to how they treat the origin of goods.  
53. Based on its answers to the Panel's questions, it appears to be the U.S. position that the ARO 
does not  prevent a Member from treating goods that have an origin of Country A as having an origin 
of Country B.  That is, the United States believes that the ARO does not require Members to treat 
the origin of goods in accordance with their country of origin, pro perly determined in accordance 
with ARO -compliant rules of origin .  In relation to marks of origin, the United States evidently 
considers that a Member may determine, in some sense, that goods have an origin of Country A but 
require them to be marked as ha ving an origin of Country B, and that this marking decision "does 
not implicate any discipline under the Agreement on Rules of Origin".31 
54. The United States provides no interpretative support for this position.  It merely asserts that 
the name of the countr y with which a good must be marked for origin marking purposes need not 
bear any relationship to the actual country of origin of the goods, i.e. the country of origin of the 
goods as determined in accordance with ARO -compliant rules of origin .  Most import antly, the United 
States makes no effort to explain how the ARO would have any practical effect if the disciplines that 
the agreement imposes upon country of origin determinations did not govern a Member's actual 
treatment of the origin of goods.  Once tha t critical interpretative consideration is taken into account, 
it is evident that a required mark of origin must correctly  indicate the country of origin of the marked 
goods as determined in accordance with ARO -compliant rules of origin , and that a Member acts 
inconsistently with the ARO when no such correspondence exists.32 
D. The Revised Origin Marking Requirement Is Inconsistent with Article 2(c) of 
the ARO Under Either Characterization of the Measures  
 
55. Regardless of how one characterizes the measures at  issue (i.e. regardless of whether one 
views the measures as based on a determination that goods made in Hong Kong, China are goods 
that originate in the People's Republic of China, or whether one views the measures as requiring 
that goods of an undisputed  origin (Hong Kong, China) be treated as goods of a different origin (the 
People's Republic of China)), there is no question that the revised origin marking requirement 
"require[s] the fulfilment of a certain condition not related to manufacturing or proce ssing" as a 
condition "that must be fulfilled for a qualifying good to be accorded the origin of a particular 
country".33  In the context of origin marking requirements, the name of the country with which a 
good must be marked is the relevant "conferral of  origin".34  The Hong Kong Trade Development 
Council ("HKTDC") submitted a request to USCBP seeking the conferral of Hong Kong, China origin 
for goods manufactured or processed in Hong Kong, China.  USCBP rejected this request.  Its 
rationale for rejecting  the request was that Hong Kong, China is not the "actual country of origin".  
But whatever the rationale, it is evident from this determination that the revised origin marking 
requirement requires the fulfilment of some condition unrelated to manufacturin g or processing as 
a prerequisite to the conferral of Hong Kong, China origin.  This, by itself, is sufficient to establish 
that the revised origin marking requirement is inconsistent with Article 2(c) of the ARO.  
 
30 Appellate Body Report, Korea–Dairy , para. 80 (citing Appellate Body Report, US – Gasoline , p. 17; 
Appellate Body Report, Japan – Alcoholic Beverages II , p. 11; Appellate Body Report, India – Patents (US) , 
para. 46; Appellate Body Report, EC – Computer Equipment , para.  84; and Appellate Body Report, US – 
Shrimp , para. 114).  
31 United States' response to Panel question Nos. 6 and 7, para. 25.  
32 The fact that the word "China" appears in the full English name of "Hong Kong, China" does not mean 
that the required correspondence exists in the case of the revised origin marking requi rement.  It is undisputed 
that, in both U.S. and international practice, "China" refers to the People's Republic of China, not Hong Kong, 
China.  For a mark of origin to indicate an origin of Hong Kong, China, the words "Hong Kong" must appear in 
the mark of origin (either alone or together with "China").  The United States has rejected any mark of origin 
for goods produced in Hong Kong, China that includes the words "Hong Kong" precisely because such a mark 
would indicate a country of origin other than the  People's Republic of China .  The revised origin marking 
requirement is therefore a case of requiring goods that have an origin of Country A to be marked as having an 
origin of Country B.  
33 Panel Report, US – Textiles Rules of Origin , para. 6.218 (emphasis  added).  
34 Panel Report, US – Textiles Rules of Origin , para. 6.208 (emphasis added).  WT/DS597/R/Add.1  
 
- 29 - 
 
  E. The Revised Origin Marking Requirement Is Inconsistent with Article 2(d) of 
the ARO Under Either Characterization of the Measures  
 
56. Regardless of how one characterizes the measures at issue, there is no question that the 
revised origin marking requirement is the result of measures that do not im pose "the same" 
requirements for a good "to be accorded the origin of a particular Member … regardless of the 
provenance of the good in question".35  The HKTDC submitted a request to USCBP seeking the 
conferral of Hong Kong, China origin for goods manufact ured or processed in Hong Kong, China.  
USCBP denied this request.  Regardless of the USCBP's rationale, it is evident from this determination 
that the revised origin marking requirement is the result of a rule of origin that discriminates between 
Hong Kon g, China and other Members.  This is because it is undisputed that, under the United States' 
"normal rules of origin", goods made in Hong Kong, China are goods of Hong Kong, China origin and 
would be accorded this treatment for origin marking purposes but for the revised origin marking 
requirement.  
F. The Revised Origin Marking Requirement Is Inconsistent with Article 2.1 of the 
TBT Agreement  
 
57. The United States maintains that while the measures reflect a specific determination that 
"Hong Kong, China is no l onger sufficiently autonomous with respect to the People's Republic of 
China", what matters is that this determination is allegedly based on "U.S. concerns for human 
rights, fundamental freedoms, and democratic norms".36  The United States argues that beca use 
these underlying concerns are "origin -neutral", the measures do not reflect origin -based 
discrimination.37 
58. This argument is nonsensical.  Setting aside the merits of the U.S. argument that the measures 
are based on "concerns for human rights, fundament al freedoms, and democratic norms", the 
question that should be asked is whether the United States also has such concerns in relation to 
other Members around the world?  Presumably, the answer is yes.  And yet, the United States, 
notwithstanding having the se "origin -neutral" concerns, adopted measures to address these 
concerns that are aimed  explicitly and exclusively at goods originating in  Hong Kong, China.  This 
only serves to reinforce the fact that the measures reflect origin -based discrimination.38 
59. None of the third parties has adopted the U.S. view that the measures are origin -neutral.  
Certain of the third parties have suggested, however, that even where the measures at issue reflect 
de jure origin -based distinctions, that may not be the end of the P anel's analysis.39  Canada in 
particular has argued that the Panel should still take into account the United States' essential security 
interests in some sort of modified version of the "legitimate regulatory distinction" ("LRD") test 
developed by the Appe llate Body.40 
60. As Hong Kong, China explained at the first substantive meeting, the United States' steadfast 
refusal to articulate its essential security interests makes this line of argument entirely hypothetical.  
If the Panel wanted to "take into account"  the essential security interests that the United States has 
broadly described in considering whether the revised origin marking requirement is inconsistent with 
Article 2.1, the Panel would have to address the U.S. assertion that its essential security in terests 
are implicated in the present case, which is an unfounded assertion that Hong Kong, China strongly 
contests.  The Panel would also have to address the relationship between those alleged essential 
security interests, strongly contested by Hong Kong,  China as aforesaid, and the revised origin 
marking requirement.  For purposes of this purely hypothetical discussion, Hong Kong, China will 
 
35 Panel Report, US – Textiles Rules of Origin , para. 6.248.  
36 United States' response to Panel question No. 14, para. 60.  
37 United States' response to Panel question No. 14, para. 60.  
38 See also Panel Report, Thailand – Cigarettes (Philippines) , paras. 7.744 -7.746 (rejecting Thailand's 
argument that the challenged VAT regime was consistent with Article  III:4 of the GATT 1994 because its 
purpose was "combatting tax evasion,  fraud, and counterfeiting of foreign cigarettes", when the panel 
concluded that it was "the foreign origin of the imported cigarettes that distinguishe[d] them from like 
domestic cigarettes").  
39 See Canada's response to Panel question No. 11; European Uni on's response to Panel question No. 
11. 
40 See Canada's response to Panel question No. 11; see also Brazil's responses to Panel question Nos. 
10(c) and 11.  WT/DS597/R/Add.1  
 
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  focus only on the latter issue – namely, the relationship between the challenged measures and the 
essential securit y interests that the United States claims to have articulated.  
61. In the U.S. view, the question is not whether the measures at issue are "necessary" for the 
protection of its essential security interests.  Rather, the United States maintains that the Panel 
would need to evaluate whether there is a "rational relationship" between the measures and its 
essential security interests.41  For the sake of argument, Hong Kong, China will set aside the fact 
that the United States has provided no textual basis wh atsoever for the "rational relationship" 
standard that it articulates.  In Hong Kong, China's view, it is not necessary to debate the relevant 
standard, because it is clear that the contested measures bear no relationship to the U.S. essential 
security interests, rational or otherwise.  
62. The measures at issue require products that are indisputably manufactured or produced in the 
customs territory of Hong Kong, China be marked with an origin of "China", which is a separate WTO 
Member.  For all othe r purposes, including duty assessment, the United States continues to treat 
such products as having Hong Kong, China origin.  In Hong Kong, China's view, it is inconceivable 
that the United States could argue that there is a "rational relationship" between  the U.S. essential 
security interests and the labeling (or rather, mislabeling) of the origin of products imported from 
the customs territory of Hong Kong, China.  It is therefore unsurprising that the United States has 
not even attempted to make this lin kage.42 
63. To be clear, Hong Kong, China does not believe that the Panel should ever reach a point in its 
analysis of Hong Kong, China's claim under Article 2.1 where it is evaluating the relationship between 
the measures at issue and the U.S. essential secur ity interests.  Based on the foregoing, the Panel 
should conclude that Hong Kong, China has established a prima facie  case with respect to all 
elements of its claim, and that this case remains unrebutted.  The U.S. origin marking requirement, 
as applied to  goods of Hong  Kong,  China origin under the revised origin marking requirement, is a 
technical regulation that accords less favourable treatment to goods imported from 
Hong Kong,  China as compared to the treatment accorded to like products originating in o ther 
Members (and non -Members).  It is therefore inconsistent with Article 2.1 of the TBT Agreement.  
G. The Revised Origin Marking Requirement Is Inconsistent with Articles IX:1 and 
I:1 of the GATT 1994  
 
64. For the reasons explained in its first written submi ssion, Hong Kong, China believes that the 
Panel must begin its analysis with Hong Kong, China's claims under the ARO, followed by its claims 
under the TBT Agreement and only then the GATT 1994.  Furthermore, Hong Kong, China has 
explained that the Panel wo uld only need to address its claims under the GATT 1994 if it were to 
conclude that the measures at issue are not inconsistent with both the ARO and the TBT Agreement.  
In the unlikely event that the Panel were to reach these claims, because the United Sta tes has 
expressly agreed that the goods subject to the revised origin marking requirement are goods of 
Hong Kong, China under USCBP's "normal rules of origin", the violations of Articles IX:1 and I:1 are 
indisputable.  
H. Article XXI(b) of the GATT 1994 Doe s Not Apply to the ARO or the TBT 
Agreement  
 
65. As best as Hong Kong, China can determine, the United States' contention that Article XXI(b) 
of the GATT 1994 applies to the ARO and TBT Agreement rests on two propositions: (i) the 
proposition that Article XXI( b) applies to all of the Annex 1A agreements by virtue of the overall 
architecture of the WTO Agreement as a single package of rights and obligations (or, to the same 
effect, by virtue of the fact that all of the Annex 1A agreements relate to trade in good s); and (ii) 
the proposition that Article XXI(b) must apply as a matter of "logic" to claims under the other Annex 
 
41 See United States' response to Panel question No. 14, para. 58.  
42 In this respect, Hong Kong, China  notes Canada's observation made "in respect of the ARO", but 
which is equally applicable here:  
[I]t is not clear that country of origin marking could ever be a matter of essential security as the WTO 
disciplines provide a multitude of other options for de aling with matters of essential security beyond 
country of origin marking.  For example, certain products from a country which may cause essential 
security risks to an importing Member could justifiably be banned under a variety of WTO provisions, 
in which  case their origin marking would not be relevant.  
Canada's response to Panel question No. 19, para. 64.  WT/DS597/R/Add.1  
 
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  1A agreements that are in some way related to provisions of the GATT 1994, either in terms of 
subject matter or the nature of the discipline imposed.  Both of these propositions are unfounded.  
66. As Hong Kong, China and a number of the third parties have demonstrated at length, the fact 
that all of the Annex 1A agreements relate to trade in goods and form part of a single undertaking 
is not a suff icient basis to conclude that Article XXI(b) of the GATT 1994 is available as a potential 
justification under all of the Annex 1A agreements.  This proposition overlooks both the text of Article 
XXI(b) itself and the context provided by the other Annex 1A agreements.  
67. Evidently aware of the shortcomings of its first interpretative approach, the United States 
attempts to apply something more closely resembling accepted interpretative methods for evaluating 
whether an exception contained in one of the covered agreements is available as a potential 
justification for violations of a different covered agreement.  Here again the United States falls short.  
Unable to identify any language in either the ARO or TBT Agreement that establishes a specific 
textual linkage  to Article XXI(b), the United States appears to suggest that what matters under the 
interpretative framework articulated in reports such as China – Raw Materials  and Russia – Traffic 
in Transit  is whether there is some sort of "overlap" between the claims  that a party may choose to 
advance under the two agreements in question, either in terms of their subject matter or the nature 
of the discipline imposed.  The United States suggests that where a claim under a non -GATT 
agreement "overlaps" with a claim tha t a party could advance under the GATT 1994, the exceptions 
available in respect of the latter claim must apply to the former claim as a matter of "logic".43 
68. There are multiple problems with the United States' argument.  In sum, the United States' 
"overlap ping claims" theory ignores the fact that each of the Annex 1A agreements is a distinct 
agreement with its own substantive provisions and its own balance of rights and obligations, and is 
also based on the mistaken premise that Hong Kong, China's claims un der the ARO and TBT 
Agreement are "the same substantive claims" as its claims under the GATT 1994.  Even where claims 
under different Annex 1A agreements relate to or affect the same general topic (e.g. marks of origin) 
or impose a similar discipline (e.g.  an obligation of non -discrimination), it does not follow as a matter 
of "logic" that Article XXI(b) (or, for that matter, other GATT exceptions) apply to claims under the 
non-GATT agreements.  
I. Article XXI(b) of the GATT 1994 Is Not Entirely Self -Judging  
 
i. The Application of Article 31 of the Vienna Convention to Article  XXI(b) of the 
GATT 1994 Establishes that Article XXI(b) of the GATT 1994 Is Not Entirely 
Self-Judging  
 
69. The U.S. view is that all of the elements in the text, including each subparagraph , are part of 
a single relative clause, and left to the determination of the Member.44  This is the basis for the U.S. 
view that Article XXI(b) is entirely self -judging.  The U.S. interpretation must be rejected, because 
it is grammatically unsound, incons istent with the principle of effet utile , and irreconcilable across 
the three equally authentic English, Spanish, and French texts.  
70. The U.S. interpretation is grammatically unsound because it interprets the relationship 
between the subparagraphs and the ch apeau in an inconsistent manner: under the U.S. 
interpretation, the first two subparagraphs modify the term "essential security interests", whereas 
the third modifies the noun "action".45  The more fundamental problem with the U.S. interpretation, 
however,  is that it renders the subparagraphs inutile .  The United States continues to argue that the 
subparagraphs retain meaning by offering "guidance" to the invoking Member.  However, as Hong 
Kong, China has previously explained,46 the principle of effet utile  demands that the subparagraph 
endings do more than merely " help guide a Member's exercise of its rights under Article XXI(b) by 
identifying the circumstances in which it is appropriate for a Member to invoke those rights".47  The 
subparagraphs must have objective  meaning among the Members.   Unsurprisingly, the U.S. position 
 
43 See, e.g. United States' opening statement at the first meeting of the Panel, paras. 41 and 43 -44, 
and the United States' response to Panel question N o. 27.  
44 See, e.g. U.S. response to Panel question No. 46, para. 210.  
45 Hong Kong, China's response to Panel question No. 44, paras. 142 -144. 
46 Hong Kong, China's opening statement at the first meeting of the Panel, para. 37; Hong Kong, China's 
response to Panel question No. 44, para. 148; Hong Kong, China's responses to Panel question Nos. 46 and 47.  
47 United States' response to Panel question N o. 46, para. 210.  WT/DS597/R/Add.1  
 
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  that the phrase "which it considers" introduces a single relative clause that renders Article XXI(b) 
self-judging in its entirety has been rejected by all  of the third parties to comment on the issue.48 
71. Finally, the U.S. interpretation remains irreconcilable with the equally authentic Spanish text 
of Article XXI(b). Faced with this incontrovertible fact, the United States jettisons the "logic" 
underlying it s own relative clause theory in the English text in order to advance what it admits to be 
an incoherent interpretation that "reconciles" all three treaty texts.49  Any need to reconcile the three 
texts is easily avoided, however, by rejecting the United St ates' flawed interpretation of the English 
text in favour of the interpretation advocated by Hong Kong, China, adopted by two prior panels, 
and overwhelmingly endorsed by the third parties.  
72. The U.S. interpretation of the ordinary meaning of the exception m ust also be rejected because 
it fails to properly take into account the relevant context, notably that provided by Article XX of the 
GATT 1994.  Instead, the United States cites other provisions that do not support its interpretation 
and, in several cases,  they are directly contradictory.  None of the other provisions cited by the 
United States supports an interpretation of Article  XXI(b) as entirely self -judging, with the 
subparagraphs serving only to "guide a Member's exercise of its rights".50 
73. Hong Kong,  China has established that its interpretation of Article XXI(b) is consistent with 
the object and purpose of the GATT 1994.  As Hong Kong, China explained in response to Panel 
Question 55, and as the panel in Russia – Traffic in Transit  correctly found, t he objectives of the 
Members set forth in the preambles to the GATT 1994 and the WTO Agreement, including, inter alia , 
the "reduction of tariffs and other barriers to trade" and the "elimination of discriminatory treatment 
in international trade relations"  are irreconcilable with an entirely self -judging interpretation of 
Article XXI(b).  Such an interpretation would threaten the security and predictability of the 
multilateral trading system.   All third parties who have commented on this issue agree with Ho ng 
Kong, China that the U.S interpretation of Article XXI(b) is unsupported by the object and purpose 
of the GATT 1994.51 
74. The United States' desperate search for context in support of its flawed interpretation of Article 
XXI(b) culminates in its reliance o n the 1949 GATT Council decision in United States – Export 
Measures ("1949 Decision") and the 1982 decision adopted by the GATT Contracting Parties 
concerning invocations of Article XXI ("1982 Decision").  As Hong Kong, China has explained, the 
1949 Decisi on does not constitute a "subsequent agreement" within the meaning of Article 31(3)(a) 
of the Vienna Convention, nor does it support the U.S. interpretation of Article  XXI(b) of the 
GATT  1994 as entirely self -judging.52  Similarly to the 1949 Decision, the  United States misreads 
the 1982 Decision as relevant context and as supporting its interpretation of Article  XXI(b) as entirely 
self-judging.53 
75. Tellingly, the United States does not even attempt to construe the "views" expressed by the 
GATT Contracting Pa rties prior to the entry into force of the WTO Agreement as a "subsequent 
agreement" or "subsequent practice" within the meaning of Articles 31(3)(a) and (b) of the Vienna 
Convention.  As Hong Kong, China has explained, such statements are not relevant und er either of 
these provisions, nor do they establish a consensus view on the correct interpretation of Article 
 
48 See Brazil's response to Panel question No. 48, para. 68; Canada's response to Panel question No. 48, 
para. 132; China's response to Panel question No. 33, para. 10; European Union's response to Panel question 
No. 48, para. 152; Norway' s response to Panel question No. 49, para. 20; Russia's third -party oral statement, 
para. 7; Ukraine's response to Panel question No. 48, paras. 17 -19; Singapore's response to Panel question 
No. 56; Switzerland's response to Panel question No. 45, para.  36. 
49 United States' response to Panel question No. 63, para. 265 (arguing that "[r]econciling the texts 
leads to the interpretation that all of the subparagraphs modify the terms 'any action which it considers' in the 
chapeau, because this reading is consis tent with the Spanish text, and also –while less in line with rules of 
grammar and conventions – permitted by the English and French texts.").  
50 United States' response to Panel question No. 45, para. 199.  
51 See Brazil's response to Panel question No. 38, paras. 66 and 67; Switzerland's response to Panel 
question No. 38, paras. 18 -21; Canada's response to Panel question No. 38; Norway's response to Panel 
question No. 38, paras. 115 -117; Russia's response to Panel question No. 38.  
52 See Hong Kong, China's re sponse to Panel question No. 56.  
53 See United States' response to Panel question No. 61, para. 252.  WT/DS597/R/Add.1  
 
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  XXI(b), as the panel in Russia – Traffic in Transit  correctly found, and as several of the third parties 
have also noted in their responses to qu estions from the Panel.54 
76. Thus, in the event that the Panel were to evaluate the U.S. invocation of Article XXI(b), which 
remains unnecessary for the reasons Hong Kong, China has explained, the Panel can and should 
dispense quickly with the U.S. interpreta tion, uphold the interpretation advocated by Hong Kong, 
China, and find that in failing to establish a prima facie  case of the objective applicability of one or 
more of the enumerated subparagraphs, the United States has failed to satisfy its burden of pro of 
under Article XXI(b).  
ii. Supplementary Means of Interpretation Under Article 32 of the Vienna Convention 
Only Serve to Confirm that Article XXI(b) Is Not Entirely Self -Judging  
 
77. The meaning of Article XXI(b) advocated by Hong Kong, China is clear and th us does not 
require confirmation under Article 32 of the Vienna Convention.  Nor does Hong Kong, China's 
interpretation result in a meaning that is ambiguous or obscure, manifestly absurd or 
unreasonable.55  Nevertheless, should the Panel consider it neces sary to have recourse to 
supplementary means of interpretation, Hong Kong, China will briefly review the relevant sources of 
interpretation and explain why they only serve to confirm the interpretation that Article XXI(b) is 
not entirely self -judging.  
78. The parties agree that the negotiating history of the International Trade Organization ("ITO") 
Charter may be considered part of the "preparatory work" to the GATT 1994.56  As Hong Kong, China 
has already addressed those ITO documents in its responses to Panel  questions, Hong Kong, China 
will only emphasize that the conclusion reached by the United States through its selective reading 
of these documents was decisively rejected by the panel in Russia – Traffic in Transit .  No third party 
supports the U.S. conclu sion that the drafting history of Article XXI(b) confirms the interpretation 
that the subparagraphs are self -judging.57 
79. The drafters' intent for the subparagraphs of the exception that became Article  XXI(b) to be 
objectively reviewable is further confirmed  by internal documents of the U.S. delegation at the time 
the exception was drafted.  It is evident from these documents, as Hong Kong, China has previously 
shown, that the U.S. delegation carefully considered and explicitly rejected revisions to the draft  
language of the exception intended to render it self -judging in its entirety.58 
80. The United States makes a similar attempt to reframe the negotiating history to support its 
argument that the availability of non -violation, nullification or impairment claims  supports an 
interpretation of Article XXI(b) as entirely self -judging.59  This negotiating history is irrelevant and, 
in any event, does not support the U.S. argument.  
81. Hong Kong, China respectfully submits that it should be unnecessary for the Panel to reach 
and interpret Article  XXI(b).  If the Panel were to conclude otherwise, however, then Hong Kong, 
China believes that the U.S. interpretation that Article XXI(b) is e ntirely self -judging must be 
rejected.  The U.S. interpretation is grammatically unsound, inconsistent with the principle of effet 
utile, and irreconcilable across the three equally authentic English, Spanish, and French texts.  
 
54 See Canada's response to Panel question No. 40, para. 105 and No. 43; Switzerland's response to 
Panel question No. 43, paras. 32 -35. 
55 See also Canada's r esponse to Panel question No. 40, para. 104; Russia's response to Panel question 
No. 40.  
56 See Hong Kong, China's response to Panel question No. 57, para. 204; United States' response to 
Panel question No. 57, para. 241.  
57 See European Union's response to Panel question No. 40, para. 122; Canada's response to Panel 
question No. 42, paras. 112 and 113; Russia's response to Panel question No. 41; Switzerland's response to 
Panel question No. 41, paras. 23 -25. 
58 See Hong Kong, China's response to Panel question  No. 59(a), paras. 211 -215.  See also European 
Union's response to Panel question No. 42, para. 125; Switzerland's response to Panel question No. 41, paras. 
26-31; Russia's response to Panel question No. 42(c).  
59 See United States' response to Panel questi on No. 64.  WT/DS597/R/Add.1  
 
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  V. HONG KONG CHINA'S OPENING  STATEMENT AT THE SECOND SUBSTANTIVE 
MEETING OF THE PANEL  
 
82. Properly  interpreted, a Member's invocation of Article XXI(b) must begin with a prima facie  
demonstration that one or more of the subparagraphs of that provision is objectively applicable to 
the me asures for which justification is sought.  The United States has not even attempted to 
discharge that burden of proof by presenting evidence and legal argument in support of the objective 
applicability of any one of the Article XXI(b) subparagraphs.  Nor h as the United States attempted 
to demonstrate in accordance with the requirement of the chapeau of Article XXI(b) that the 
measures bear a plausible relationship to any essential security interests of the United States, such 
that the invocation of Article XXI(b) would have been made in good faith.  
83. Having  disposed of the United States' attempt to justify the revised origin marking 
requirement under Article XXI(b) of the GATT 1994, Hong Kong, China will  turn to the United States' 
responses to Hong Kong, Chin a's claims on the merits  under the ARO, the TBT Agreement, and the 
GATT 1994, respectively.  
84. The United  States' apparent acknowledgement that the goods covered by the revised origin 
marking requirement originate in Hong Kong, China when ARO -compliant rules  are applied is 
tantamount to a concession that the United States is acting inconsistently with the ARO.  The United 
States appears to acknowledge that the goods subject to the revised origin marking requirement 
are goods of Hong Kong, China origin when th e United States' "normal rules of origin" – that is, the 
United States ARO -compliant rules of origin – are applied.60  The United States nevertheless requires 
these goods to be marked as having the origin of a different WTO Member, the People's Republic of  
China.  
85. As for the TBT Agreement, in relation to Hong Kong, China's claim under Article 2.1 of the TBT 
Agreement, the United States focuses its second written submission on its assertion that Hong Kong, 
China has "walk[ed] away from its own theory of the c ase" simply because Hong Kong, China has 
stated that the  challenged measures are de jure discriminatory.61  To be clear, Hong Kong, China's 
argument has been from the very beginning, and remains, that the measures at issue are de jure 
discriminatory.  Furt her, Hong Kong, China has also provided evidence of the detrimental impact of 
the origin -based distinction in the revised origin marking requirement in  fact to facilitate the Panel's 
objective assessment in the present dispute.  
86. Turning  to Hong Kong, China's claims under the GATT 1994, it is apparent from the United 
States' second written submission that it has no meaningful response to Hong Kong, China's claims 
under Article IX:1 and Article I:1. The United States' attempt to rebut thes e claims is based on an 
obvious mischaracterization of the relevant legal standard under these provisions.  The essence of 
the United States' response to Hong Kong, China's claim under Article IX:1 is that Article IX:1 does 
not prescribe any rules about ho w a Member determines the country of origin for origin marking 
purposes, or what terminology it permits or requires to indicate the country of origin.62  This response 
shows a lack of accurate appreciation of the nature of Article IX:1.  Article IX:1 is an  anti-
discrimination  provision, not a provision that prescribes specific substantive rules governing how 
Members implement origin marking requirements.  The United States engages in the same tactic 
with respect to Hong Kong, China's claim under Article I:1  of the GATT 1994.  The question under 
Article I:1 is not, as the United States suggests, whether this provision prescribes specific 
substantive rules about how Members implement origin marking requirements.  
VI. HONG KONG CHINA'S CLOSING STATEMENT AT THE S ECOND SUBSTANTIVE 
MEETING OF THE PANEL  
 
The United States' Allegedly "Origin -Neutral" Regulatory Objectives  
 
87. Hong Kong, China's view, shared by all of the third parties, is that the U.S. position on the 
applicability  of Article XXI(b) to the TBT Agreement is baseless.  In the context of Hong Kong, China's 
claim under Article 2.1, the repeated U.S. references to its "self -judging essential security interests" 
are therefore a non -sequitur.  Where this leaves the United States is with its theory that measures 
 
60 United States' second written submission, para. 165.  
61 United States' second written submission, para. 177.  
62 See, e.g., United States' second written submission, paras. 194 -195. WT/DS597/R/Add.1  
 
- 35 - 
 
  that are de jure  discriminatory are not in violation of Article 2.1 if a Member can identify an origin -
neutral concern operating somewhere in the background.  
88. The alleged  origin -neutral concerns that the United States has claimed in this case are its 
profes sed global concerns about democratic norms and fundamental freedoms.  The measure that 
Hong Kong, China is challenging is a technical regulation that precludes Hong Kong, China goods 
from being marked with the name "Hong Kong, China". Hong Kong, China cann ot conceive of any 
relationship between this technical regulation and the United States' professed global concerns about 
democratic norms and fundamental freedoms, and the United States appears determined not to 
explain what this relationship might be.  Bu t what the United States is asking the Panel to accept is 
quite clear – namely, that its professed origin -neutral concerns about democratic norms and 
fundamental freedoms could be used to demonstrate that any origin -based discrimination is in fact 
"origin -neutral" and not inconsistent with Article 2.1.  This is true even if the measures are 
discriminatory on their face, as is the case here, and even if the measures have no relationship to 
the United States' professed "global concerns", as is also the case h ere.  Hong Kong, China trusts 
that it is evident to the Panel that accepting the U.S. "origin -neutral" theory would obliterate the 
straightforward prohibition on origin -based discrimination contained in Article 2.1 of the TBT 
Agreement.  
The United States' Failed Invocation of Article XXI(b) of the GATT 1994  
 
89. Beginning with the subparagraphs of Article XXI(b), i.e. the types of GATT -inconsistent 
"actions" for which a responding Member may seek justification, Hong Kong, China does not consider 
that the United  States has even attempted to demonstrate the objective applicability of any of these 
subparagraphs.  While the United States has made vague references to Article XXI(b)(iii) and may 
have implied that the challenged measures constitute an "action … taken i n time of … [an] other 
emergency in international relations", the United States has made no effort to identify that any such 
"emergency in international relations" exists, as that term is properly understood.  
90. Even if the United States had demonstrated the objective applicability of Article XXI(b)(iii), 
which it has not, the same basic problem would arise were the United States to attempt to 
demonstrate that it has invoked this exception in good faith. As the panel in Russia – Traffic in 
Transit  correctly he ld, the obligation of good faith requires the "invoking Member to articulate the 
essential security interests said to arise from the emergency in international relations sufficiently 
enough to demonstrate their veracity".63  While sticking to its position that what constitutes an 
"essential security interest" is exclusively for the invoking Member to determine, the United States 
nevertheless suggests that any situation in the world that may implicate the United States' alleged 
global concern of "fundamental  freedoms, human rights, and democratic norms" necessarily 
implicates the "essential security interests" of the United States.  
91. The problem for the United States is that not every foreign policy or political concern, no 
matter how sincerely held, necessaril y implicates a Member's essential security interests as this term 
is properly understood.  Even if one were to take at face value the United States' asserted interest 
in promoting "fundamental freedoms, human rights, and democratic norms" around the world,  the 
United States has failed to demonstrate how the alleged situation with regard to "fundamental 
freedoms, human rights, and democratic norms" in other parts of the world relates to the protection 
of the United States' territory and its population from e xternal threats, or the maintenance of law 
and public order internally.  Article XXI of the GATT 1994 is entitled "Security Exceptions", not 
"Foreign Policy" or "Political" exceptions.  The United States itself has stated in these proceedings 
on more than one occasion, that "support for democratization is a fundamental principle of overall 
U.S. foreign policy ".  Irrespective of the veracity of this position, such purported foreign policy 
interest could not possibly be described as an "essential security int erest" under Article XXI.  
92.  Finally, and where the wheels ultimately come off the bus for the United States' attempted 
invocation of Article XXI(b), the United States has completely failed to demonstrate that there is any 
nexus whatsoever between the GATT -inconsistent action for which it seeks justification and any 
"essential security interests" of the United States, even accepting  for this purpose that the promotion 
of "fundamental freedoms, human rights, and democratic norms" in other parts of the world is such 
an "interest".  The measures at issue in this dispute relate exclusively to a country of origin labelling 
requirement.  T he United States has not even attempted to explain how the discriminatory treatment 
 
63 Panel Report, Russia – Traffic in Transit , para. 7.134.  WT/DS597/R/Add.1  
 
- 36 - 
 
  of Hong Kong, China goods in respect of this origin labelling requirement – in particular, the refusal 
to allow these goods to be marked with the full English name of the c ustoms territory in which they 
were manufactured or produced, the treatment that the United States accords to the goods of all 
other Members – has anything to do with protecting any "essential security interests" of the United 
States, whatever those "inter ests" might be.  There is no plausible connection between requiring the 
origin of goods to be mislabelled and the protection of any "essential security interests" of the United 
States.  More importantly, the United States has not offered any explanation of  what this connection 
might be – in fact, in the U.S. closing statement at the second substantive meeting, the United 
States has made clear that it has no intention of demonstrating this connection. This is presumably 
because there is none.  
93. In conclusion, the matter before the Panel is a legal dispute narrowly focused on whether the 
United States' discriminatory treatment of Hong Kong, China goods in respect of the United States' 
country of origin labelling requirement is consistent with the ide ntified provisions of the covered 
agreements.  It is not about the veracity of the United States' views concerning the relationship 
between Hong Kong, China and the People's Republic of China.  While the United States has 
attempted to justify these violati ons under Article XXI(b) of the GATT 1994 – effectively conceding 
those violations – that exception does not apply to the ARO and TBT Agreement and, in any event, 
the United States has failed to discharge its burden of proof under that exception.  
VII. HONG  KONG, CHINA'S RESPONSES TO QUESTIONS FROM THE PANEL AFTER THE 
SECOND SUBSTANTIVE MEETING  
 
Excerpt from Hong Kong, China's Response to Panel Question 72  
 
94. …  Hong Kong, China agrees with the Appellate Body that an LRD analysis only makes sense 
in cases of a lleged de facto discrimination, where the discrimination against  imported products "will 
not be immediately discernible from the text of a measure ".64  Furthermore, as Hong Kong, China 
explained in its response to the prior question, the United States appe ars to agree that where a 
measure " on its face , treat[s] imported products less favorably than other like foreign products", no 
further analysis is required.65 
95. The reason  that the parties and the Appellate Body are all in agreement on this point is that 
Article 2.1 of the TBT Agreement states quite clearly that "products imported from the territory of 
any Member shall be accorded treatment no less favourable than that accorded to … like products 
originating in any other country."  If the origin -based less f avourable treatment is evident on the 
face of the measure, the violation of Article 2.1 is incontrovertible. …  It is difficult to hypothesize 
many circumstances in which a technical regulation would need to draw origin -based distinctions to 
achieve a legi timate regulatory objective that could not otherwise be achieved on an origin -neutral 
basis – i.e. by focusing on product characteristics or their related processes and production methods, 
rather than the origin of the products.  
96. Finally, Hong Kong, China w ould once again emphasize that the United States has never  
suggested that the detrimental impact on Hong Kong, China products "stems exclusively from a 
legitimate regulatory distinction rather than reflecting discrimination against the group of imported 
products."66  If the United States had ever suggested that the detrimental impact here was based 
exclusively on a legitimate regulatory distinction (and if the Panel disagreed with both parties and 
the Appellate Body and found an LRD analysis appropriate in a case of de jure discrimination), then 
Hong Kong, China would agree with the Appellate Body that the Panel would need to "carefully 
scrutinize the particular circumstances of the case, that is, the design, architecture, revealing 
structure, operation, and  application of the technical regulation at issue, and, in particular, whether 
that technical regulation is even -handed, in order to determine whether it discriminates against the 
group of imported products."67 
 
64 Appellate Body Report, US – COOL (Article 21.5) , para.  5.95 (emphasis added).  
65 United States' response to Panel question No. 14, para. 55 (emphasis added).  
66 Appellate Body Report, US – Clove Cigarettes , para. 182.  
67 Appellate Body Report, US – Clove Cig arettes , para. 182.  WT/DS597/R/Add.1  
 
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  Excerpt from Hong Kong China's Response to Pa nel Question 82  
 
97. The problem, to be clear, is that while the United States has suggested that the alleged global 
concerns of "the values of fundamental freedoms and human rights" are its essential security 
interests under Article XXI(b), the United States has made no attempt to explain how protecting 
"the values of fundamental freedoms and human rights" in Hong Kong, China  as alleged has anything 
to do with the protection of the United States from external threats or the maintenance of law and 
public order internally .  This is why Hong Kong, China maintains that the United States has not 
sufficiently articulated its essential security interests – because what the United States has in fact 
articulated cannot conceivably fall within the undisputed understandin g of what constitutes an 
"essential security interest" under Article XXI(b).  
Excerpts from Hong Kong China's Response to Panel Questions 113 and 114  
 
98. …  Members  certainly retain some level of flexibility to determine, for themselves, what 
constitutes an emergency in international relations.  As Canada further notes, however, this 
flexibility does not detract from the requirement that the invoking Member demonstra te that an 
"emergency in international relations" objectively exists, under a proper interpretation of that term, 
and that there is a sufficient nexus between the action for which justification is sought and the 
circumstances shown to constitute an "emerge ncy in international relations".  
99. …  The said nexus requirement extends both to the temporal  connection, as highlighted by 
the European Union, and to the subject matter connection between the GATT -inconsistent action 
and the demonstrated "emergency in inter national relations", to which Canada refers.  In respect of 
the latter requirement, it would not make sense if, for example, a Member could invoke 
Article  XXI(b)(iii) to justify a GATT -inconsistent action that does nothing to protect the invoking 
Member fr om the defence and military concerns, or maintenance of law and public order concerns, 
implicated by the "emergency in international relations" shown to exist.  
VIII.  HONG KONG, CHINA'S COMMENTS ON THE U.S. RESPONSES TO QUESTIONS FROM 
THE PANEL AFTER THE SE COND SUBSTANTIVE MEETING  
 
Excerpt from Hong Kong, China's Introductory Comments  
 
100.  …  In no event would the Panel need to evaluate or pass judgment on the merits of the United 
States' "sufficient autonomy" determination.  The United States' consistent focus in its responses to 
the Panel's questions on the legitimacy of its "sufficient autonomy" determination is, therefore, a 
complete red herring.  The United States repeatedly highlights this issue, despite its irrelevance, 
because it has no c redible response to Hong Kong, China's legal claims of violation under the relevant 
WTO covered agreements in this dispute.  
Excerpt from Hong Kong, China's Comment on U.S. Response to Panel Question 68  
 
101.  …  The United  States appears to believe, without any legal basis, that it has a blank check to 
impose de jure discriminatory measures with respect to products imported from Members around 
the world, so long as those measures are ostensibly related to the United States' overarching "origin 
neutral" global con cerns.  
102.  The fallacy  of the U.S. theory is obvious.  If this theory applies to technical regulations adopted 
by all Members (and it must), and the presence of any relevant "origin -neutral governmental 
objective" renders all origin -based less favourable trea tment non -discriminatory, it would be hard 
to imagine that any discriminatory measure could not be excused pursuant to this standard.  When 
Members treat products from a particular Member less favourably, they tend to have a reason for 
doing so.  If extrap olated out far enough, it seems to Hong Kong, China that those reasons could 
always be linked to a high -level "origin neutral governmental objective".  But there is nothing in 
Article 2.1 of the TBT Agreement that suggests that the reason for the less favo urable treatment is 
relevant, much less the high -level government objective behind the reason.  The United States is 
reading gaping exceptions into an agreement where no such exceptions exist, and adopting the 
United States' amorphous "origin neutral" theo ry would have obvious and far -reaching implications 
for the rules -based multilateral trading system beyond the current dispute.  WT/DS597/R/Add.1  
 
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  Excerpt from Hong Kong, China's Comment on U.S. Response to Panel Question 103  
 
103.  …  As Hong Kong, China explained in response to Panel question No. 104, a situation alleged 
to constitute an "emergency in international relations", even if taking place in another part of the 
world, must nevertheless implicate defence or military interest s, or maintenance of law and public 
order interests, of the invoking Member .  Those interests must, in all events, concern the "essential 
security interests" of the invoking Member, i.e. "those interests relating to the quintessential 
functions of the stat e, namely the protection of its territory and its population from external threats, 
and the maintenance of law and public order internally."68  Events taking place in other parts of the 
world could constitute an "emergency in international relations" under  this interpretation, provided 
that this condition is satisfied.  
104.  As discussed further in Hong Kong, China's comment on the United States' response to Panel 
question No. 116, the United States has provided no explanation of how events taking place in Hong 
Kong, China implicate any defence or military interests, or maintenance of law and public order 
interests, of the United States , even if one were to credit in full the United States' characterization 
of those events.  At most, what the United States has de scribed is a political or foreign policy concern 
relating to those events.  The United States has failed to demonstrate how this concern, even if 
sincerely held, constitutes an "emergency in international relations" for the United States.  
Excerpt from Hon g Kong, China's Comment on U.S. Response to Panel Question 114  
 
105.  …  Even if, purely on an arguendo basis, one were to assume that "the situation with respect 
to Hong Kong" constitutes an "emergency in international relations" in relation to the United State s, 
contrary to a proper understanding of that phrase, the United States has failed to explain how 
prohibiting Hong Kong, China exporters from marking their products with the "full English name" of 
the customs territory in which the products were manufactur ed or produced – the treatment that 
the United States accords to the products of all other Members – does anything to protect the United 
States from the alleged "threat" arising from this "national emergency".  That is, the United States 
has failed to expl ain how violating Articles IX:1 and I:1 of the GATT 1994 – the GATT -inconsistent 
action for which justification is sought – does anything to protect the United States from any "threat" 
to the United States arising from this putative "emergency in internati onal relations". Thus, the 
United States has failed to demonstrate the required nexus between the action for which justification 
is sought and the alleged "emergency in international relations", even if one were to assume that 
"the situation with respect t o Hong Kong" is such an "emergency", contrary to a proper interpretation 
of this phrase.  
 
 
 
68 Panel Report, Russia – Traffic in Transit , para. 7.130.  WT/DS597/R/Add.1  
 
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  ANNEX B -2 
INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF THE UNITED STATES  
I. EXECUTIVE SUMMARY OF U.S. FIRST WRITTEN SUBMISSION  
 
1. At issue in this dispute is the sovereign right of a state to take action to protect its essential 
security in the manner it considers necessary.  This right is reflected in Article  XXI(b) of the General 
Agreement on Tariffs and T rade ("GATT 1994 "), and WTO Members have not agreed to subject the 
exercise of this right to legal review.   
2. The United States -Hong Kong Policy Act of 1992 provides for the continued application of 
U.S. laws to Hong Kong, China, in the same manner as appli ed prior to July 1, 1997, unless otherwise 
provided for by law or by an Executive order.  In its 2020 report under the Act, the Secretary of 
State explained that the People 's Republic of China had fundamentally undermined the autonomy of 
Hong Kong, China, and decertified Hong Kong, China, as warranting treatment under U.S. law in the 
same manner as U.S. laws were applied before July 1, 1997.  On July 14, 2020, the President of the 
United States issued the Executive Order on Hong Kong Normalization.  Citing the report by the 
Secretary of State as well as the National Security Legislation imposed by the People 's Republic of 
China on Hong Kong, China, the President determined that Hong Kong, China, "is no longer 
sufficiently autonomous to justify differential t reatment in relation to the People 's Republic of China " 
for purposes of a number of U.S. laws.  The Executive Order further determined "that the situation 
with respect to Hong Kong, including recent actions taken by the PRC to fundamentally undermine 
Hong Kong's autonomy, constitutes an unusual and extraordinary threat, which has its source in 
substantial part outside the United States, to the national security, foreign policy, and economy of 
the United States. "  The President declared a national emergency with respect to that threat.  
3. On August 11, 2020, U.S. Customs and Border Protection issued a clarification in the Federal 
Register  indicating that in light of Executive Order 13936, for purposes of 19 U.S.C.  
§ 1304, imported goods produced in Hong Kong, C hina, may no longer continue to be marked as 
"Hong Kong, " as was the case prior to July 1, 1997.  The United States considers that the 
requirement to mark goods of Hong Kong, China, to indicate "China, " pursuant to Executive Order 
13936, is an action neces sary to protect U.S. essential security interests consistent with Article 
XXI(b) of the GATT 1994.  
A. The text of GATT 1994 Article XXI(b) in its context, and in light of the 
Agreement's object and purpose, establishes that the exception is self -
judging.  
 
4. Under DSU Article 3.2, the provisions of the GATT 1994 are to be interpreted "in accordance 
with customary rules of interpretation of public international law. "  Section 3 (Articles 31 to 33) of 
the Vienna Convention on the Law of Treaties  ("Vienna Convent ion" or "VCLT") reflects the rules for 
such interpretation.  An interpretation of Article XXI(b) of the GATT 1994 applying the rules in VCLT 
Articles  31 through 33 establishes that Article XXI(b) is self -judging.  
5. The plain meaning of the text of Article XX I(b) of the GATT 1994 establishes that the 
exception is self -judging.  As this text provides "[n]othing " in the GATT 1994 shall be construed to 
prevent a WTO Member from taking "any action " which "it considers necessary " for the protection 
of its essential  security interests.  This text establishes that (1) "nothing " in the GATT 1994 prevents 
a Member from taking any action needed to protect an essential security interest, and (2) the action 
necessary for the protection of its essential security interests i s that which the Member "considers 
necessary " for such protection.  
6. The self -judging nature of GATT 1994 Article XXI(b) is demonstrated by that provision 's 
reference to actions that the Member "considers necessary " for the protection of its essential securi ty 
interests.  The ordinary meaning of "considers " is "[r]egard in a certain light or aspect; look upon 
as" or "think or take to be. "  Under Article XXI(b), the relevant "light" or "aspect " in which to regard 
the action is whether that action is necessary for the protection of the acting Member 's essential 
security interests.  Thus, reading the clause together, the ordinary meaning of the text indicates it WT/DS597/R/Add.1  
 
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  is the Member ( "which it ") that must regard ( "consider[] ") the action as having the aspect of being 
necessary for the protection of that Member 's essential security interests.  The French and Spanish 
texts of Article XXI(b) confirm the self -judging nature of this provision.  Specifically, use of the 
subjunctive in Spanish ( "estime ") and the future with an implied subjunctive mood in French 
("estimera ") support the view that the action taken reflects the beliefs of the WTO Member, rather 
than an assertion of objective fact that could be subject to debate.   
7. The ordinary meaning of the terms in the phrase "its essential security interests, " also 
supports the self -judging nature of Article XXI.  The word "interest " is defined as "[t]he relation of 
being involved or concerned as regards potential detriment or (esp.) advantage. "  The term 
"security " refers to "[t]he condition of being protected  from or not exposed to danger. "  The 
definitions of "essential " include "[t]hat is such in the absolute or highest sense " and "[a]ffecting the 
essence of anything; significant, important. "  
8. And it is "its" essential security interests —the Member 's in ques tion—that the action is taken 
for the protection of.  Therefore, it is the judgment of the Member that is relevant.  Each WTO 
Member must determine whether certain action involves "its interests, " that is, potential detriments 
or advantages from the perspe ctive of that Member.  Each WTO Member likewise must determine 
whether a situation implicates its "security " interests (not being exposed to danger), and whether 
the interests at stake are "essential, " that is, significant or important, in the absolute or highest 
sense.  No WTO Member or WTO panel can substitute its views for those of a Member on such 
matters.  
9. The text of subparagraphs (i) to (iii) of Article XXI(b) also supports the self -judging nature 
of this provision.  The first element of this text tha t is notable is the lack of any conjunction to 
separate the three subparagraphs.  The subparagraphs are not separated by the coordinating 
conjunction "or", to demonstrate alternatives, or the conjunction "and", to suggest cumulative 
situations.  Accordingl y, each subparagraph must be considered for its relation to the chapeau of 
Article XXI(b).  
10. Subparagraphs (i) and (ii) of Article XXI(b) both begin with the phrase "relating to " and 
directly follow the phrase "essential security interests " in the chapeau of  paragraph (b).  The most 
natural reading of this construction is that subparagraphs (i) and (ii) modify the phrase "essential 
security interests " and thus illustrate the types of "essential security interests " that Members 
considered could lead to action under Article XXI(b).  
11. Subparagraphs (i) and (ii) do not limit a Member 's essential security interests exclusively to 
those interests.  First, the chapeau of Article XXI(b) (as noted) reserves to the Member the judgment 
of what "its interests " are, including whether they are relating to one of the enumerated interests.  
Second , subparagraph (iii) reflects no explication (and therefore cannot be understood to reflect a 
limitation) on a Member 's essential security interests.  Rather, as with subparagraphs (i) and (ii), 
the essential security interests are those determined by the Member taking the action.  
12. Subparagraph (iii) begins with temporal language: "taken in time of  war or other emergency 
in international relations. "  The phrase "taken in time of " echoes the reference to "taking any action " 
in the chapeau of Article XXI(b), a nd it is actions that are "taken ", not interests.  Thus, the temporal 
circumstance in subparagraph (iii) modifies the word "action, " rather than the phrase "essential 
security interests. "  Accordingly, Article XXI(b)(iii) reflects a Member 's right to take action it 
considers necessary for the protection of its essential security interests when  that action is taken in 
time of war or other emergency in international relations.  Nor does the text of Article XXI(b)(iii) 
require that the emergency in internation al relations or war directly involve the acting Member, 
reflecting again that the action taken for the protection of its essential security interests is that which 
the Member judges necessary.  
13. Subparagraphs (i) to (iii) of Article XXI(b) thus reflect that Members wished to set out certain 
types of "essential security interests " and a temporal circumstance that Members considered could 
lead to action under Article XXI(b).  In this way, the subparagraphs guide a Member 's exercise of its 
rights under this prov ision while reserving to the Member the judgment whether particular action is 
necessary to protect its essential security interests.  
14. The context of Article XXI(b), provided by Articles XXI(a) and XXI(c), Article XX, and other 
WTO provisions supports that A rticle XXI(b) is self -judging.   WT/DS597/R/Add.1  
 
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  15. First, Article XXI(a) is immediate context for understanding the ordinary meaning of the 
terms of Article XXI(b).  Article  XXI(a) anticipates that there may not be facts on the record before 
a panel that could be used to "test" a Member 's invocation of Article XXI(b).  Moreover, the phrase 
"which it considers necessary " is present in Article XXI(a) and XXI(b), but not in Article  XXI(c).  The 
selective use of this phrase highlights that, under Article XXI(a) and XXI(b), it is  the judgment of 
the Member that controls.  
16. Second , the context provided by Article XX also supports the understanding that 
Article  XXI(b) is self -judging.  Specifically, Article XX sets out "general exceptions, " and a number 
of subparagraphs of Article XX relate to whether an action is "necessary " for some listed objective.  
Unlike Article XXI(b), however, none of the Article XX subparagraphs use the phrase "which it 
considers " to introduce the word "necessary. "  Furthermore, Article XX includes a chapeau which 
subjects a measure qualifying as "necessary " to a further requirement of, essentially, non -
discrimination.  Notably, such a qualification, which requires review of a Member 's action, is absent 
from Article  XXI.  The chapeau of Article XX includes an additional non -discrimination requirement, 
which subjects a Member 's action to additional scrutiny based on the particular factual 
circumstances.  By contrast, in Article XXI(b), the operative language regarding  the relationship 
between the measure and the objective is in the chapeau.    
17. Third, a number of provisions of the GATT 1994 and other WTO agreements refer to action 
that a Member "considers " appropriate or necessary, and —as in Article XXI(b) —this language  signals 
that a particular judgment resides with that Member.  For example, under Article  18.7 of the 
Agreement on Agriculture, "[a]ny Member " may bring to the attention of the Committee on 
Agriculture "any measure which it considers ought to have been not ified by another Member. "  
Similarly, Article III(5) of the General Agreement on Trade in Services (GATS) permits "[a]ny 
Member " to notify the Council for Trade in Services of any measure taken by another Member which 
"it considers affects " the operation o f GATS.  In other provisions of the GATT 1994 or other WTO 
agreements, however, certain judgments are left for determination by a panel, the Appellate Body, 
or a WTO committee.   
18. Fourth , by way of contrast, and further context, in at least two WTO provisio ns the judgment 
of a Member is expressly subject to review through dispute settlement.  Specifically, DSU Article 
26.1 permits the institution of non -violation complaints, subject to special requirements, including 
that the panel or Appellate Body agree wi th the judgment of the complaining party.  In this provision, 
Members explicitly agreed that it is not sufficient that "[a] party considers " a non -violation situation 
to exist, and accordingly, a non -violation complaint is subject to the additional check t hat "a panel 
or the Appellate Body determines that " a non -violation situation is present.  A similar limitation was 
agreed in DSU Article 26.2 for complaints of the kind described in GATT 1994 Article XXIII:1(c).  The 
context provided by DSU Articles 26.1 and 26.2 is highly instructive.  No such review of a Member 's 
judgment is set out in Article  XXI(b).    
19. The object and purpose of the GATT 1994 also establishes that Article XXI(b) is self -judging.  
The object and purpose of the GATT 1994 is set out in the  agreement 's Preamble.  That Preamble 
provides, among other things, that the GATT 1994 set forth "reciprocal and mutually advantageous 
arrangements directed to the substantial reduction of tariffs and other barriers to trade. "  Particularly 
with these refe rences to arrangements that are "mutually advantageous " and tariff reductions that 
are "substantial " (rather than complete), the contracting parties (now Members) acknowledged that 
the GATT contained both obligations and exceptions, including the essential  security exceptions at 
Article XXI.  The self -judging nature of Article XXI is further established by a subsequent agreement 
between the parties regarding the interpretation of the treaty or the application of its provisions in 
the context of the United S tates Export Measures dispute between the United States and 
Czechoslovakia.   
B. Supplementary means of interpretation, including negotiating history, confirm 
that Article XXI(b) is self -judging  
 
20. While not necessary in this dispute, supplementary means of interpretation, including 
negotiating history, confirm that Article  XXI(b) is self -judging.  The drafting history of GATT 1994 
XXI(b) dates back to negotiations to establish the International Trad e Organization of the United 
Nations (ITO).  The drafting history shows that a deliberate textual distinction was drawn between 
the self -judging nature of exceptions pertaining to essential security and exceptions related to other WT/DS597/R/Add.1  
 
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  interests that, unlike th e security -based exceptions referenced above, were retained as part of the 
"[g]eneral commercial policy " chapter of the ITO draft charter.  
21. Regarding the exception 's scope, exchanges at a July 1947 meeting of the ITO negotiating 
committee demonstrate that t he drafters of the text that became GATT 1994 Article XXI(b) 
understood that essential security measures could not be challenged as violating obligations in the 
underlying agreement.  Nevertheless, an ITO member affected by essential security measures coul d 
claim that its expected benefits under the charter had been nullified or impaired, as set forth at 
Article 35(2) of the ITO Charter draft current in July 1947.  As applied to the WTO context, this 
discussion indicates essential security measures cannot b e found by a panel to breach the GATT 
1994 or other WTO agreements, although Members may request that a panel review whether its 
benefits have been nullified or impaired by the essential security measure and, if so, to assess the 
level of that nullificatio n or impairment.  Documents from early 1948 further confirm the drafters ' 
understanding that non -violation, nullification or impairment claims – and not breach claims – would 
be the appropriate recourse for countries affected by essential security actions.    
22. In its analysis of the negotiating history of Article XXI(b), the Russia – Traffic in Transit  panel 
referred at length to internal documents of the U.S. delegation to the GATT negotiations.  The panel  
erred in relying on such material because it is not "negotiating history " within the meaning of the 
Vienna Convention.  Even putting aside this interpretative error, the panel also misunderstood and 
mischaracterized the U.S. discussions to which it referred.  These internal U.S. deliberations —when 
considere d as a whole and in context —further confirm that Article XXI(b) is self -judging.   
23. The self -judging nature of Article XXI(b) is also supported by views repeatedly expressed by 
GATT contracting parties (now Members) in connection with prior invocations of t heir essential 
security interests.   
C. Reconciliation of the English, Spanish and French versions of Article XXI(b) 
does not alter the self -judging nature of the provision  
 
24. The interpretation that emerges based on the ordinary meaning of the text of the 
subparagraphs in the English and French language versions is not fully supported by the Spanish 
text of the subparagraphs.  Specifically, the Spanish text of the three subpara graphs – in particular, 
use of the feminine plural "relativas " – indicates that they must be read to modify the term "action " 
in the chapeau of Article XXI(b), whereas the ordinary meaning of subparagraphs (i) and (ii) in the 
English and French versions is  most naturally read to modify the term "interests " in the chapeau 
while the temporal limitation in subparagraph (iii) relates to "action ".  The meaning that best 
reconciles the texts, having regarding to the object and purpose of the treaty, must be adopt ed 
under Article 33 of the VCLT.  
25. Reconciling the texts leads to the interpretation that all of the subparagraphs modify the 
terms "any action which it considers " in the chapeau, because this reading is consistent with the 
Spanish text, and also —while less  in line with rules of grammar and conventions —permitted by the 
English and French texts.  This reading of the text of the subparagraphs does not alter the plain 
meaning of the chapeau or the overall structure of Article XXI(b), however.  All of the elemen ts in 
the text, including each subparagraph ending, are part of a single relative clause beginning with 
"which it considers necessary " and ending at the end of each subparagraph ending, and are left to 
the determination of the Member.  Idiosyncrasies in th e Spanish text of Article XXI(b), compared to 
the English and French texts of Article XXI, as well as the Spanish texts of security exceptions in the 
GATS and TRIPS Agreement, do not warrant a different interpretation.   
D. The Russia – Traffic In Transit  panel erred in deciding it had authority to 
review a responding party's invocation of Article XXI.  
 
26. The panel in Russia – Traffic in Transit  erred when it decided that it had authority to review 
multiple aspects of a responding party 's invocation of Artic le XXI.  That panel 's interpretation of 
Article XXI is not consistent with the customary rules of interpretation set forth in the Vienna 
Convention.  In addition to being inconsistent with the ordinary meaning of the terms of Article XXI, 
the panel failed to interpret that pr ovision as a whole.  In fact, the panel appears to have reached 
its conclusion regarding the reviewability of Article XXI a mere four paragraphs after beginning its 
analysis – based not on "the mere meaning of the words and the grammatical construction of the 
provision, " but on what it termed the "logical structure of the provision. "  Furthermore, in its WT/DS597/R/Add.1  
 
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  examination of the negotiating history of the treaty, the Russia – Traffic in Transit  panel 
misconstrued certain statements by negotiating parties and reli ed on materials not properly 
considered part of the negotiating history.  These errors reveal the panel 's analysis as deeply flawed 
and suggest a results -driven approach not in line with the responsibility bestowed on the panelists 
by WTO Members through t he DSU.  
E. The Exception under Article XXI of the GATT 1994 Applies to the Claims under 
the Agreement on Rules of Origin.  
 
27. The structure of the WTO Agreement shows that the essential security exception applies to 
the Multilateral Agreements on Trade in Goo ds, including the Agreement on Rules of Origin .  The 
starting point for establishing that the essential security exception applies to the Agreement on Rules 
of Origin  is to examine the structure of the WTO Agreement as a whole.   
28. The Marrakesh Agreement is  an umbrella, establishing among other things that all of the 
agreements in its annexes are a single undertaking.  In particular, Annex 1A consists of the 
Multilateral Agreements on Trade in Goods (including the Agreement on Rules of Origin  and the 
Agreeme nt on Technical Barriers to Trade ), Annex 1B consists of the GATS, and Annex 1C consists 
of the Agreement on Trade Related Aspects of International Property Rights  (TRIPS).  Two 
possibilities arise from this structure.  The first is that the negotiators un derstood that the GATT 
1947/1994 essential security exception applies to the new agreements on trade in goods contained 
in Article 1A.  The other possibility is that for some reason, the negotiators believed that the essential 
security exception applied to  the fundamental disciplines in the GATT 1994, but not to the 
elaborations upon those disciplines as set out in the other trade -in-goods agreements.  This second 
interpretation is untenable as a matter of logic or common sense.    
29. The General Interpretativ e Note to Annex 1A supports the interpretation that the GATT 1994 
essential security exception applies to the new trade -in-goods agreements.  In addition, the 
interpretation that the GATT 1994 essential security exception applies throughout Annex  1A is ful ly 
consistent with the conflict rule set out in the interpretive note.  In particular, none of the new trade -
in-goods agreements contains a provision stating that the GATT 1994 Article XXI exception is 
inapplicable to the obligations under those agreements .   
30. It is not the case that the negotiators thought that in 1994, as compared to when the GATT 
was agreed to in 1947, essential security was no longer an over -riding concern.  To the contrary, 
when the parties decided to extend disciplines to new areas —services, and intellectual property —
the new agreements contain the essential security exception.   
31. Further, it is not the case that negotiators thought that basic disciplines should be subject 
to the essential security exception, but not more detailed or elab orated exceptions. First, no logical 
rationale exists for such distinction, nor in most cases can the distinction even be made.  Rather, 
substantial overlap exists between the disciplines in the GATT 1994 and the new Uruguay Round 
Agreements on trade in go ods.  Second, in the new areas —Annex 1B services and Annex 1C 
intellectual property —the essential security exception applies to every obligation —whether 
fundamental or more detailed.  No rationale would point to a different intent for obligations with 
respect to trade in goods.    
32. The Agreement on Rules of Origin  includes multiple textual links to the GATT 1994. The 
Preamble includes multiple references to the GATT 1994, and in light of that link the Agreement 
aims to increase transparency, predictability, and consistency in the preparation and application of 
rules of origin, and ultimately to harmonize rules of origin.  That is, the Preamble confirms that while 
the Agreement establishes certain principles with respect to rules of origin, at least until comp letion 
of the Harmonized Work Program provided for in Part IV of the Agreement, it does not constrain a 
Member 's discretion in a way that would prevent it from acting to protect its essential security 
interests.  
33. In the "Definitions and Coverage " provisions  in Part I of the Agreement on Rules of Origin , 
Article 1.1 defines "rules of origin " for purposes of the agreement with reference to the GATT 1994, 
and Article 1.2 further establishes the linkage to the GATT 1994, providing that "[r]ules of origin 
referre d to in paragraph 1 shall include all rules of origin used in non -preferential commercial policy 
instruments, such as in the application of:  most -favoured -nation treatment under Articles I, II, III, WT/DS597/R/Add.1  
 
- 44 - 
 
  XI and XIII of GATT 1994;  anti -dumping and countervaili ng duties under Article VI of GATT 1994;  
safeguard measures under Article XIX of GATT 1994; origin marking requirements under Article IX 
of GATT 1994; and any discriminatory quantitative restrictions or tariff quotas. "  Each of these 
underlying GATT 1994 provisions is subject to the GATT 1994 essential security exception; logic 
dictates that the associated rules of origin would be subject to the same provision.  
34. Article 2(b) of the Agreement on Rules of Origin  also confirms the connection between the 
GATT  1994 and the availability of Article XXI of the GATT 1994 as a defense to breaches of the 
Agreement on Rules of Origin .  Article 2(b) confirms that rules of origin disciplined by the Agreement 
on Rules of Origin  are linked to "commercial policy " instruments disciplined by the GATT, as provided 
in Article 1.2.   
35. In addition, Articles 7 and 8 of the Agreement on Rules of Origin  provide that the provisions 
of Articles XXII and XXIII of the GATT 1994, respectively, as elaborated and applied by the DS U, are 
applicable to the Agreement on Rules of Origin .  For purposes of Article 8, which provides that the 
provisions of Article XXIII shall be followed "mutatis mutandis, " the reference to "its obligations 
under this Agreement " in Article XXIII:1 include the substantive provisions of both the Agreement 
on Rules of Origin  and the GATT 1994.  A further link is provided by the first sentence of Article 1.1 
of the DSU, which provides that "[t]he rules and procedures of this Understanding shall apply to 
dispute s brought pursuant to the consultations and dispute settlement provisions listed in Appendix 
1."  Appendix 1 includes the agreements in Annex 1A to the WTO Agreement, which in turn include 
both the GATT 1994 and the Agreement on Rules of Origin .  Both Arti cle XXIII of the GATT and 
Article 8 of the Agreement on Rules of Origin  are "consultations and dispute settlement provisions " 
under the DSU to be read together and subject to Article XXI.  The overall structure of the WTO 
Agreement, as discussed above, ind icates that essential security exception applies to the Annex 1A 
multilateral agreements on trade in goods, including the Agreement on Rules of Origin . 
36. Moreover, tthe structure of the Agreement on Rules of Origin , and the distinct disciplines 
that apply be fore and after completion of the work program for the harmonization of rules of origin, 
provide discretion to Members, including to take action to protect their essential security interests, 
and further confirm the availability of Article XXI of the GATT 1 994 as a defense.   
37. Although not necessary for purposes of interpreting the Agreement on Rules of Origin  in this 
dispute, supplementary means of interpretation confirm that Members (at the time of the Uruguay 
Round, Contracting Parties) understood the clos e link between the GATT and rules of origin.  The 
negotiators of the Agreement on Rules of Origin , in discussing the scope of the potential agreement, 
specifically considered that it should cover rules of origin "subject to GATT disciplines, " as well as 
the extent to which it should cover rules beyond those disciplines, such as government procurement.  
They understood the Agreement on Rules of Origin  as linked to the GATT 1994.  
38. The claims in this dispute confirm the link between the GATT 1994 and the Agreem ent on 
Rules of Origin , and the availability of Article XXI(b).  With regard to the specific claims at issue, 
Hong Kong, China, itself acknowledges the link between the Agreement on Rules of Origin  and the 
GATT 1994.  Hong Kong, China, states that its clai ms of breach of Article 2(d) of the Agreement on 
Rules of Origin  are "essentially the same " as its claims of breach of Articles I:1 and IX:1 of the GATT 
1994 (as well as Article 2.1 of the TBT Agreement), and requests further that the Panel exercise 
judici al economy with respect to its GATT 1994 claims.   
39. Just as the origin marking requirement is subject to an exception to claims under Articles 
I:1 and IX:1 as an action taken to protect U.S. essential security interests under Article XXI of the 
GATT  1994, s o too is this action subject to an exception to the same substantive claims under the 
Agreement on Rules of Origin .  To consider otherwise would suggest that, while a Member could 
invoke the exception under Article XXI of the GATT 1994 for a measure that i t considers necessary 
to protect its essential security interests in relation to commitments under Articles I, II, III, VI, IX, 
XI, XIII, and XIX of the GATT 1994, the rules of origin used to apply those measures  could 
nonetheless be found to breach the Agreement on Rules of Origin  with no regard for the Member 's 
essential security interests at issue.  Such a finding would not only undermine the self -judging nature 
of the Article XXI exception, but also appear to mean that a Member would have no defense und er 
the Agreement on Rules of Origin  for essential security measures.     WT/DS597/R/Add.1  
 
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  F. The Exception under Article XXI of the GATT 1994 Applies to the Claims under 
the TBT Agreement   
 
40. The explanation that the structure of the WTO Agreement as a whole shows that the GATT 
1994 essential security exception applies to the Annex 1A Multilateral Agreement on Trade in Goods, 
including the Agreement on Rules of Origin  applies with equal force t o the TBT Agreement.   
41. Multiple provisions of the TBT Agreement link the Agreement to the GATT 1994 and essential 
security considerations.  The seventh recital of the preamble to the TBT Agreement unambiguously 
states, "Recognizing that no country should b e prevented from taking measures necessary for the 
protection of its essential security interest. "  The seventh recital does not refer to any qualification 
or condition with respect to a Member 's right to take measures to protect its essential security 
interests.  Like Article XXI(b), the seventh recital reflects that measures taken to protect a Member 's 
essential security interests are not subject to additional requirements or scrutiny.  In contrast, the 
sixth recital, which provides immediate context for the seventh recital, provides a list of certain types 
of measures that Members are not prevented from taking, "subject to " certain requirements.  The 
contrast between the sixth and seventh recitals reflects an important difference between Articles XX 
and X XI of the GATT 1994.  That is, while the former subjects a measure qualifying as "necessary " 
to a further requirement of, essentially, non -discrimination, and in turn to review in a possible 
dispute settlement proceeding, the latter provision is self -judging as to what actions are necessary 
for a Member to protect its essential security measures.   
42. Annex 1.1 of the TBT Agreement provides the definition of a technical regulation, and the 
second sentence of the definition identifies "marking " as an example of  a requirement that might be 
a technical regulation.  At the same time, Article IX of the GATT 1994 specifically disciplines origin 
marking requirements.  That is, while the TBT Agreement imposes disciplines on technical 
regulations, standards, and conform ity assessment procedures, each of which might address a range 
of subjects, Article IX of the GATT 1994 imposes disciplines specifically on marks of origin.  This 
confirms that, to the extent that a technical regulation provides for origin marking that is disciplined 
under Article IX of the GATT 1994, Article XXI of the GATT 1994 is available as an exception to both 
commitments, and a defense for a claimed breach of both the GATT 1994 and the TBT Agreement.     
43. Article 2.1 of the TBT Agreement sets forth MFN and national treatment obligations that are 
similar to that provided by Articles I and III:4 of the GATT 1994.  With respect to the issue of 
discriminatory treatment, Article 2.1 mirrors Articles I:1 and III: 4 of the GATT 1994.  The overlap 
between the disciplines of Article 2.1 of the TBT Agreement and Articles I and III:4 of the GATT 1994 
confirms that Article XXI applies to Article 2.1 of the TBT Agreement just as it applies to Article I 
and III of the GATT  1994.  This is especially true when read in light of the object and purpose of the 
TBT Agreement provided in the seventh recital.  To conclude otherwise would suggest that a Member 
would not be able to defend a measure taken to protect its essential secur ity interests, simply 
because it is a technical regulation.   
44. Article 10.8.3 refers specifically to essential security with respect to the disclosure of 
information.  This reference confirms that, as discussed below, the negotiators of the TBT Agreement 
did not intend for the agreement to "supplement " or "replace " essential security concerns.  This 
explicit reference to the GATT 1994 further confirms the understanding that essential security 
measures are not subject to the disciplines of the TBT Agreement, especially when read in light of 
the object and purpose of the TBT Agreement provided in the seventh recital.         
45. Like Articles 7 and 8 of the Agreement on Rules of Origin , Article 14 of the TBT Agreement 
references GATT 1994 and the DSU.  As explained  above with respect to Articles 7 and 8 of the 
Agreement on Rules of Origin , both Article XXIII of the GATT and Article 14 of the TBT Agreement 
are "consultations and dispute settlement provisions " under the DSU to be read together, and subject 
to Article XXI.  This is further confirmed by the object and purpose of the TBT Agreement, as provided 
in the seventh recital.   
46. The negotiating history of the TBT Agreement supports the understanding that essential 
security measures are not reviewable under the TBT Agreement.  Prior to the negotiation and 
completion of the TBT Agreement in the Uruguay Round, an earlier agreement on technical barriers 
to trade was negotiated as part of the Tokyo Round in 1979.  Tokyo Round Standards Code 
negotiators contemplated that the preamble should "refer" to the exception articles of the GATT, WT/DS597/R/Add.1  
 
- 46 - 
 
  specifically Articles XX and XXI.  This supports the interpretation that the seventh recital of the 
preamble reflects Article XXI of the GATT.   
47. Even prior to the Tokyo Round, the GATT Comm ittee on Industrial Products created a 
working group on non -tariff barriers to examine, among other things, standards as a non -tariff 
barrier to trade.  The working group recognized that the most -favored -nation principle needed to be 
reconciled with any co de covering standards.  More specifically, the working group considered the 
general exceptions of Article XX of the GATT 1947 as "being relevant " to the context of the issue of 
standards and regulations serving as a barrier to trade.  The 1970 report of th e working group on 
technical barriers to trade to the GATT Committee on Trade suggests that, while the working group 
had been considering the need to reconcile the most -favored -nation principle with the goal of 
maintaining standards, as well as the idea th at a standards code should "supplement " the general 
exceptions in Article XX of the GATT, it did not similarly consider the Article XXI exception as needing 
to be "supplemented. "  This confirms that the Article XXI exceptions are not meant to be reconciled  
with the TBT Agreement, reflecting that measures under that exception need not be "in accordance 
with the provisions " of the TBT Agreement.       
48. The claims in this dispute confirm the link between the GATT 1994 and the TBT Agreement, 
and the availability  of Article XXI(b).  The crux of the claims by Hong Kong, China, that the origin 
marking requirement breaches Articles 2.1 of the TBT Agreement, as well as Articles I:1 and IX:1 of 
the GATT 1994 (and Article 2.1 of the TBT Agreement) is that the United Sta tes applies a condition 
of "sufficient autonomy " with respect to goods of Hong Kong, China.  Just as the origin marking 
requirement is subject to an exception to claims under Articles I:1 and IX:1 as an action taken to 
protect U.S. essential security inter ests under Article XXI of the GATT 1994, so too is this action 
subject to an exception to the same substantive claims under the TBT Agreement.  There is no logical 
basis to conclude that an origin marking requirement subject to Article IX of the GATT 1994 could 
be defended as an action taken to protect essential security interests under Article XXI, but only if 
that marking requirement is not a technical regulation.  Indeed, by arguing that a "requirement to 
mark an imported product with its country of orig in" is by definition a technical regulation, Hong 
Kong, China, would deprive a Member from taking action to protect its essential security interests 
with respect to origin marking requirements – effectively undoing the availability of Article XXI for 
Article IX claims.  The structure of the WTO Agreement, as well as the text of the TBT Agreement, 
indicate that the negotiators of the TBT Agreement and the GATT 1994 did not intend such a result.     
G. In light of the self -judging nature of Article XXI of the GATT 1994, the sole 
finding the Panel may make consistent with its terms of reference under Article 
7.1 of the DSU is to note the invocation of Article XXI  
 
49. The DSB has established the Panel 's terms of reference under Article 7.1 of the DSU.  Under 
these standard terms of reference, the DSB has tasked the Panel: (1) "[t]o examine " the matter – 
that is, to "[i]nvestigate the nature, condition or qualities of (something) by close inspection or 
tests"; and (2) to "make such findings  as will assist the DSB in making the recommendations or in 
giving the rulings provided for " in the covered agreement.   
50. DSU Article 11 confirms this dual function of a panel.  Article 11 of the DSU states that the 
"function of panels " is to "assist the DSB in discharging its res ponsibilities " under the DSU itself and 
the covered agreements.  Article 11 provides that a panel "should make an objective assessment  of 
the matter before it, including an objective assessment of the facts of the case and the applicability 
of and conformi ty with the relevant covered agreements, " and "such other findings  as will assist the 
DSB in making the recommendations or in giving the rulings provided for in the covered 
agreements. "   
51. In this dispute, the Panel has been tasked by the DSB to examine the  matter and to make 
such findings as may lead to a recommendation to bring a WTO -inconsistent measure into conformity 
with the WTO Agreement.  Article 11 reflects this function of examination and making such findings.  
In order to make the "objective asses sment " that may lead to findings to assist the DSB to make 
recommendations, the Panel is to make "an objective assessment of the facts of the case " and "of 
the applicability of and conformity with the relevant covered agreements. "  In the context of this 
dispute, such an assessment begins with interpreting Article XXI(b) in accordance with the 
customary rules of interpretation.  And that objective assessment of Article XXI(b) leads to the 
understanding that the sole finding that the Panel may make is to rec ognize the Member 's invocation 
of Article XXI(b).   WT/DS597/R/Add.1  
 
- 47 - 
 
  52. The panel objectively assesses the facts of the case by noting that the responding Member 
has invoked Article XXI(b).  The panel objectively assesses the applicability of and conformity with 
the relevant covered agreements by first interpreting Article XXI(b) in accordance with the 
customary rules of interpretation, and —once it has done so and determined Article XXI(b) to be self - 
judging —finding Article XXI(b) applicable.  Nothing in the DSU —including Art icle 11 of the DSU —
requires otherwise.  
53. This result is consistent with DSU Article 19.  Article 19.1 provides that "recommendations " 
are issued "[w]here a panel or the Appellate Body concludes that a measure is inconsistent with a 
covered agreement " and are  recommendations "that the Member concerned bring the measure into 
conformity with the agreement. "  DSU Article 19.2 clarifies that "in their findings and 
recommendations, the panel and Appellate Body cannot add to or diminish the rights and obligations 
provided in the covered agreement. " 
54. Invocation of Article XXI(b) means that an essential security action cannot be found by a 
panel or the Appellate Body to be inconsistent with a covered agreement.  It would diminish a 
Member 's "right" to take  action it considers necessary for the protection of its essential security 
interests if a panel or the Appellate Body purported to find such an action inconsistent with Article 
XXI(b).  Thus, the sole finding that the Panel may make —consistent with its te rms of reference and 
the DSU —is to note in the Panel 's report that the United States has invoked its essential security 
interests.  No additional findings concerning the claims raised by the complaining Member in its 
submissions would be consistent with th e DSU, in light of the text of Article XXI(b).  
H. The Panel should begin its analysis by addressing the invocation by the 
United  States of Article XXI  
 
55. The DSU does not specify the order of analysis that a panel must adopt, and instead leaves 
this matter up to the Panel 's determination.  Therefore, contrary to the assertion by Hong Kong, 
China, that the Panel "must begin its analysis " with the claims under the Agreement on Rules of 
Origin , then the TBT Agreement, and then the GATT 1994, the Panel may consi der the issues 
presented in any order that it sees fit.  Whatever the Panel 's internal ordering of its analysis, as the 
United States has explained, in light of the U.S. invocation of Article XXI(b) and the self -judging 
nature of that provision, the sole finding  that the Panel may make in its report – consistent with its 
terms of reference and the DSU – is to note its understanding of Article XXI and that the United 
States has involved Article XXI.  No additional findings concerning the claims raised by Hon g Kong, 
China, in its submissions would be consistent with the DSU, in light of the text of Article XXI(b).  
Accordingly, the Panel should begin by addressing the invocation by the United States of Article 
XXI(b).  
II. EXECUTIVE SUMMARY OF THE U.S. OPENING  STATEMENT AT THE FIRST 
SUBSTANTIVE HEARING  
 
56. In this dispute, the Hong Kong Special Administrative Region of the People 's Republic of 
China seeks to use the WTO as a vehicle to second -guess a national security determination of the 
United States – specifica lly, a determination that Hong Kong, China, is no longer sufficiently 
autonomous with respect to the People 's Republic of China to warrant differential treatment under 
U.S. law.  A series of recent actions by the People 's Republic of China have undermined the autonomy 
of Hong Kong, China, and the rights and freedoms of its people.  These actions include using the 
National Security Law as a blunt tool to quash democratic dissent, to suppress the freedoms of 
speech and of the press, and to undermine an indepe ndent judiciary.  The United States has 
determined the situation with respect to Hong Kong, China, to be a threat to its essential security, 
and has accordingly taken action it considers necessary to protect its essential security interests.    
57. Each WTO Me mber has the right to determine, for itself, what action it considers necessary 
to protect its own essential security interests.  The self -judging nature of Article XXI(b) of GATT 
1994 is established by the text of that provision, in its context, and in th e light of the treaty 's object 
and purpose.  Although not necessary in this dispute, this interpretation of Article XXI is confirmed 
by supplementary means of interpretation, including the Uruguay Round negotiating history.  A 
complaining Member is not wit hout any recourse if a Member invokes the essential security 
exception.  A complaining Member may pursue a non -violation nullification or impairment claim in 
those circumstances.  WT/DS597/R/Add.1  
 
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  58. Article XXI applies to the Agreement on Rules of Origin  and the TBT Agreement .   Notably, 
the structure of the WTO agreements, as well as numerous textual references within the Agreement 
on Rules of Origin  and the TBT Agreement, highlight the applicability of Article XXI.  The overall 
structure of the WTO Agreement is critical cont ext for an interpretation of the covered agreements 
and Article XXI in particular.  Consideration of the structure shows that Article XXI applies to the 
disputed claims under the Agreement on Rules of Origin  and the TBT Agreement.  The U.S. 
interpretation of the applicability of Article XXI to the Agreement on Rules of Origin  and the TBT 
Agreement reflects the principle of effectiveness.  The object and purpose of the agreements at issue 
confirm that Article XXI applies.  In light of the proper understandin g of Article XXI, the Panel 's 
terms of reference and the DSU direct the Panel to make the sole finding that the United States has 
invoked Article XXI.   
III. EXECUTIVE SUMMARY OF THE U.S. RESPONSES TO PANEL'S FIRST SET OF 
QUESTIONS  
 
U.S. Responses to Questions 5 -11 
 
59. The requirement to indicate a particular country as a country of origin does not necessarily 
involve a prior determination that that country is the country of origin.  The determination of what 
terminology (marking) is permissible is fundamentally differen t from, and in turn can be made 
independently of, a determination that the particular country is the country of origin for goods.  The 
former may involve a political or diplomatic determination as to what is a country, and what is its 
territory.  The Agree ment on Rules of Origin  establishes that a "rule of origin " is used to match a 
good – based on its processing – with a certain territorial region.  This matching exercise is 
fundamentally different than a marking decision.  In particular, the marking decis ion is the name – 
with which the good must be marked – associated with the geographic region.  Each of these marking 
decisions is independent of the rules of origin that a Member applies, and not governed by the 
Agreement on Rules of Origin .  The United St ates uses its normal rules of origin in determining the 
applicable region, and then has chosen the name to be associated with the region of Hong Kong, 
China, based on its essential security interests, in light of China 's decision to interfere in the 
govern ance, democratic institutions, and human rights and freedoms of Hong Kong, China.  This 
determination of the appropriate marking or label does not implicate any discipline under the 
Agreement on Rules of Origin .  The Agreement on Rules of Origin  does not i nclude any obligation 
providing for outcomes of the determination of a country of origin; rather, it has explicit disciplines, 
none of which are implicated by the marking requirement at issue.    
U.S. Responses to Questions 12 -16 
 
60. In the context of an Arti cle 2.1 analysis of whether a measure accords "less favorable " 
treatment, there are two approaches before the Panel – the correct one, and the Appellate Body 's 
flawed one – for assessing this element of Article 2.1.  Under both approaches, security interes ts (if 
applicable) can and should be taken into account.  Both approaches take regulatory purposes and 
objectives of the disputed measures into consideration.  Therefore, if the regulatory purpose or 
objective of the measure is for the protection of securi ty interests, or if the factual circumstances 
indicate that the measure is for the protection of security, then a panel cannot ignore these purposes 
or factual circumstances in its assessment of whether the measure accords less favorable treatment.   
61. The p roper approach is based on the ordinary meaning of Article 2.1.  What Article 2.1 
prohibits are measures that accord less favorable treatment to the concerned imported products as 
compared to other foreign like products based on origin .  That is, if it is found that there is 
detrimental impact to the conditions of competition of the concerned imports as a result of the 
operation of the disputed measure, and if that detrimental impact is based on the administration of 
an origin -based discri mination, then the element of "less favorable treatment " can be established.  
However, if the detrimental impact can be explained on the basis of origin -neutral factors, then 
those circumstances are indicative of non -discrimination.  Under the second appro ach, it must first 
be established that there is detrimental impact to the conditions of competition, and second, a panel 
must then further analyze whether such detrimental impact stems exclusively from a legitimate 
regulatory distinction.  
62. It is incumbent on the complainant to establish detrimental impact in establishing a prima 
facie case.  This is a fact -intensive exercise – and one that Hong Kong, China, glosses over in its 
written submission and oral statements.  Even if Hong Kong, China, demonstrates d etrimental WT/DS597/R/Add.1  
 
- 49 - 
 
  impact, the panel would then have to take into account the regulatory purpose of the disputed 
measures and whether the impact is rationally related to an origin -neutral regulatory purpose.  The 
United States considers that, if detrimental impact  can be explained on the basis of origin -neutral 
factors or is rationally linked to a regulatory purpose or objective that is origin -neutral, then those 
circumstances are indicative of non -discrimination.   
U.S. Responses to Questions 20 -43 
 
63. The "subject " of this interpretative exercise is the specific claimed breaches, specifically 
Articles 2(c) and 2(d) of the Agreement on Rules of Origin, Article 2.1 of the TBT Agreement, and 
Articles I and IX of the GATT 1994.  And the issue is whether Article XXI(b) ap plies to these specific 
provisions.  That is an interpretive inquiry that the Panel must conduct on a case -by-case basis.  The 
Panel should look to the single undertaking structure of the WTO Agreement, which provides context 
to the application of Article XXI(b) to the specific claims.  The principle of effectiveness is not meant 
to provide the maximum effectiveness to all provisions, but rather it means that interpretation should 
not deprive the effectiveness of provisions.  T he United States considers tha t previous reports, in 
analyzing the applicability of GATT Article XX to a non -GATT agreement, correctly recognized that 
lack of explicit incorporation of an exception is not dispositive.   
64. The wholesale incorporation of GATT into the WTO Agreement as the lead agreement in 
Annex 1A further demonstrates the relationship of other multilateral trade in goods agreements with 
the GATT "as the central pillar of the MTO package " and the Uruguay Round negotiating history 
shows a continued interest in maintaining a meaningful essential security exception.  That is, the 
structure of the WTO Agreement establishes that Article XXI(b) applies to the Annex 1A agreements 
on trade in goods at issue in this dispute.  The Annex 1B and 1C agreements were understood not 
to be a s integrally linked to GATT, and therefore each received its own essential security provision.  
65. The structural consideration is relevant not only for the relationship between the agreements 
themselves, but also between the particular claims.  Based on the overlaps between the claims at 
issue under each of the agreements, with respect to the applicabi lity of Article XXI(b), the Panel 
should find that the exception applies to the specific claims at issue.   
U.S. Responses to Questions 44 -67 
 
66. The role of the subparagraphs of Article XXI(b) is to guide a Member 's discretion by 
identifying the situation th at a Member considers to be present when it takes an action that it 
considers necessary to protect its essential security interests.  Hong Kong, China, suggests that the 
effectiveness of a treaty provision depends on whether it is reviewable in a dispute s ettlement 
mechanism, and whether that review can result in a recommendation to withdraw or modify the 
underlying measure.  This is not correct as a matter of treaty interpretation.  "Effective " does not 
mean that each treaty provision must impose an obliga tion, or conditions for the exercise of a right, 
that is reviewable under a dispute settlement mechanism.  The VCLT does not suggest that whether 
a party enters into binding treaty obligations is dependent on that party agreeing to formal dispute 
settlemen t.  The question of whether a state consents to undertake a particular obligation in 
international law is simply separate from whether a state consents to dispute settlement in respect 
of that obligation.   
67. In Article XXI(b), the relative clause that follo ws the word "action " describes the situation 
which the Member "considers " to be present when it takes such an "action. "  The clause begins with 
"which it considers necessary " and ends at the end of each subparagraph.  Because the relative 
clause describing  the action begins "which it considers ", the other elements of this clause are 
committed to the judgment of the Member taking the action.  Taking essential security actions is a 
basic function of government.  The self -judging nature of Article XXI(b) is es tablished in the text of 
the provision itself, and reflects the balance between rights and obligations that negotiators struck.   
68. Not all preparatory materials may be correctly considered part of a treaty 's negotiating 
history, or travaux préparatoires , and therefore appropriate for recourse as a supplementary means 
of interpretation.  Instead, for materials to be so considered, they should be in the public domain, 
or at least "in the hands of all the parties. "  The United States considers ITO documents con stitute 
part of the negotiating history or the "preparatory work of the treaty " with respect to the GATT 1994.  WT/DS597/R/Add.1  
 
- 50 - 
 
  69. The United States considers that the Decision Concerning Article XXI of The General 
Agreement (the 1982 Decision) i s a "decision " within the meaning of paragraph 1(b)(iv) of the GATT 
1994 and Article XVI:1 of the WTO Agreement.  However, it does not constitute a "subsequent 
agreement " under Article 31(3)(a) of the Vienna Convention.  
70. The availability of a non -violation nullification  or impairment claim is relevant to the question 
of whether the essential security exception in Article XXI(b) is self -judging because this is the 
balance negotiators struck in the text.  While it affords recourse to a Member aggrieved by another 
Member 's essential security action, the DSB – as a result of the self -judging nature of Article XXI(b) 
established by the terms of that provision – may not find that a Member is wrong in considering an 
action necessary to protect its essential security interests, a nd recommend that the Member bring 
that measure into conformity with a covered agreement.  To make such a recommendation would 
diminish a Member 's "right" to take action it considers necessary to protect its essential security 
interests, contrary to Articl es 3.2 and 19.2 of the DSU.   
IV. EXECUTIVE SUMMARY OF THE U.S. SECOND WRITTEN SUBMISSION  
 
A. None of the arguments presented by Hong Kong, China, rebut the U.S. 
interpretation of Article XXI(b) as self -judging.  
 
71. Hong Kong, China, artificially separates the terms in the single relative clause that begins 
with the phrase "which it considers necessary " and ends at the end of each subparagraph.  Hong 
Kong, China, is effectively asking the Panel to restructure Article XXI and read into it text that is not 
there.   
72. Hong Kong, China, argues that the third subparagraph is not a part of a single relative clau se 
that begins with "which it considers ".  Rather, Hong Kong, China, considers that the words that 
follow "its essential security interests " are part of a noun phrase with the word "action ".  Under the 
construction offered by Hong Kong, China, the noun phr ase, which consists of a noun and its 
modifier, is separated such that the noun ( "action ") and its modifier ( "relating to fissionable materials 
or the materials from which they are derived ") are separated by a relative clause consisting of twelve 
words ( "which it considers necessary to protect its essential security interests ").  This position 
ignores English grammar rules, in particular the rule that a modifier follows the word it modifies or 
is otherwise placed as closely as possible to the word it modifi es.  In Article XXI(b), the dependent 
clause begins with a relative pronoun – "which " – so this dependent clause is also called a relative 
clause.  Relative clauses "postmodify nouns ".  Thus, here, the dependent/relative clause modifies 
the noun "action. "  The dependent/relative clause therefore describes what action the Member may 
take regardless of the obligations under the Agreement.  To avoid this grammatical issue, Hong 
Kong, China, suggests that Article XXI(b) should be read as if the language of the subparagraphs 
does not follow "which it considers ".  In this rewrite, Hong Kong, China, appears to acknowledge 
that its own interpretation of Article XXI(b) does not reflect the English text as written.  
73. Hong Kong, China, seeks to cleave the single relativ e clause beginning with "which it 
considers ", and read into Article XXI(b) the clause "and which relates to " in the beginning of 
subparagraphs (i) and (ii), and "and which is taken in time of " in the beginning of subparagraph (iii).  
But there are no words  before any of the subparagraphs to indicate a break in the single relative 
clause or to introduce a separate condition.  The drafters could have added an introductory clause 
before the subparagraph endings to indicate that these were intended to be condit ions separate from 
the "which it considers " clause.  The drafters did add such a clause in other provisions, such as 
Article XX(i) and Article XX(j), which use the phrase "provided that. "  Such a clause is absent from 
Article XXI(b), however, indicating th at the text should be read as a single clause, and not as 
introducing separate conditions.  
74. In addition, the  suggestion by Hong Kong, China, that Article XXI(b) is not self -judging in 
that the principle of "good faith " requires a panel to review whether a M ember has acted in good 
faith in invoking Article XXI is inconsistent with the ordinary meaning of Article XXI(b), as well as 
with the DSU.  The interpretation proposed by Hong Kong, China, would rewrite Article XXI(b) to 
insert the text, and impose the re quirements, of the chapeau of Article XX.  The chapeau of Article 
XX sets out additional requirements for a measure falling within a general exception set out in the 
subparagraphs – that a measure shall not be applied in a manner which constitutes a means of 
"arbitrary or unjustifiable discrimination " or a "disguised restriction on international trade, " both of WT/DS597/R/Add.1  
 
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  which concepts aim to address applying a measure inconsistently with good faith.  Again, Hong 
Kong, China, is effectively asking the Panel to read into Article XXI text that is not there.    
B. Reconciling the Authentic Texts of Article XXI(b) under Articl e 33 of the VCLT 
Establishes that Article XXI(b) Is Self -judging  
 
75. Hong Kong, China, argues that there is no need to reconcile the different language versions 
of Article XXI(b).  Hong Kong, China, fails to account for the clear differences between the Spani sh 
text of Article XXI(b), and the English and French texts of Article XXI(b) (as well as the English, 
French, and Spanish texts of the security exceptions in the GATS and the TRIPS Agreement).  The 
VCLT expressly contemplates that there might be differenc es in authentic texts.  Acknowledging 
those differences does not equate to challenging the authenticity of a text, contrary to the suggestion 
by Hong Kong, China.  Rather, it is part of the process of treaty interpretation, and an effort to give 
meaning to  all authentic texts.   
76. As the United States has explained, the interpretation that best reconciles the textual 
differences between the English and French subparagraph texts on one hand, and the Spanish 
subparagraph text on the other – specifically the dif ferent relationship between the subparagraph 
endings and the chapeau terms – as provided for by Article 33 of the VCLT, leads to the same 
fundamental meaning: that Article XXI(b) commits the determination of whether an action is 
necessary for the protectio n of a Member 's essential security interests in the relevant circumstances 
to the judgment of that Member alone.   
C. Interpretation of the subparagraphs of Article XXI(b) as self -judging reflects 
the principle of effectiveness  
 
77. Hong Kong, China, submits t hat the interpretation that the subparagraphs of Article XXI(b) 
are self -judging must be rejected in favor of a principle of effectiveness that is not itself provided 
for in the principles of treaty interpretation.  Article 31 of the VCLT itself embodies t he principle of 
effectiveness.  That is, with respect to the interpretation of Article XXI(b) (as for any provision), 
there is no separate principle of effectiveness that requires an outcome different than an 
interpretation consistent with Articles 31 thro ugh 33.  
78. Hong Kong, China, suggests that the subparagraphs must be found not to be self -judging 
so as to prevent Members from "circumvent[ing] their treaty obligations under the GATT 1994 by 
disguising discriminatory measures as ‘essential security interest s'."  This outcome -driven approach 
is one that the International Law Commission rejected in declining to include a separate rule on 
effectiveness in the VCLT that would have required an interpreter to give a treaty "the fullest weight 
and effect ".  The ILC  specifically noted that including such a separate rule "might encourage attempts 
to extend the meaning of treaties illegitimately on the basis of the principle of ‘effective 
interpretation '."   
79. With respect to the claim by Hong Kong, China, that, because of the possibility that it 
perceives of abuse, the GATT 1994 cannot have "appropriate effects " if Article XXI(b) is self -judging, 
Hong Kong, China, seeks to read into Article XXI(b) language regarding discrimination and disguise 
that are not found in that provision – but are provided for in Article XX.  The argument by Hong 
Kong, China, fails to give effect to the different language in the different exceptions.  In addition, 
this assertion by Hong Kong, China, presumes that, absent panel review of the merit s of essential 
security measures, a Member has no recourse with respect to another Member 's essential security 
actions.  This is incorrect.  To the extent that Members were concerned with potential abuses of 
Article XXI(b), they provided for non -violation nullification or impairment claims as an avenue to 
address such perceived abuses.   
80. In addition, the fact that a treaty reserves judgment to a party itself does not render the 
treaty language "mere suggestions ", or "superfluous ", as Hong Kong, China, sugge sts.  By serving 
to guide a Member 's exercise of its rights under Article XXI(b), the subparagraphs inform a Member 's 
decision -making when it is considering action to protect its essential security interests.  In the 
experience of the United States, govern ments do consider the implications of proposed actions with 
respect to their trade agreements, without being motivated solely by the threat of WTO litigation.  
This is not a meaningless exercise, and the subparagraphs, like other WTO provisions that do not  
provide a role for panel review, are not useless in this regard.   WT/DS597/R/Add.1  
 
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  D. Article XXI(b) does not require an invoking Member to identify a specific 
subparagraph  
 
81. Article XXI(b) does not require a responding Member to invoke a specific subparagraph of 
the prov ision to invoke that Member 's right to take any action which it considers necessary for the 
protection of its essential security interests.  Hong Kong, China, cites nothing in the text of Article 
XXI(b) that suggests one specific subparagraph must be invoked.  A Member invoking Article XXI(b) 
may nonetheless choose to make information available to other Members.  Indeed, the United States 
has made plentiful information available in relation to its challenged measures, as well as provided 
that informati on in the course of this dispute.  While such publicly available information could be 
understood to relate most naturally to the circumstances described in Article XXI(b)(iii), the text of 
Article XXI does not require a responding Member to provide details  relating to its invocation of 
Article XXI, including by identifying a specific subparagraph.  
E. The Context of Article XXI(b) Supports that It is self -judging.  
 
82. Hong Kong, China, appears to suggest that Article XXI(a) is not relevant context because 
the United States has not invoked Article XXI(a) in this dispute, and that in any event Article XXI(a) 
does not support an interpretation that Article XXI(b) is self -judging because information regarding 
a Member 's invocation of Article XXI(b) will "generally " be publicly available and panels have means 
to deal with sensitive information.  Hong Kong, China, is incorrect with respect to both assertions.  
Regardless of whether a Member has invoked Article XXI(a) in a particular dispute, or what public 
information  is available about the measures challenged, the circumstances of a particular dispute do 
not alter the meaning of the terms of either Article XXI(a) or Article XXI(b).  Interpreting Article 
XXI(b) as subjecting a Member 's security measures to review by a panel would mean that, at least 
in some instances, a Member may be required to choose between exercising its rights under Article 
XXI(a) and Article XXI(b).  While it may not be that such a conflict would arise in every instance, 
the Panel must avoid an in terpretation of Article XXI(b) that could undermine the effectiveness of 
Article XXI(a).   
83. Hong Kong, China, also argues that certain similarities between Articles XX and XXI(b) – in 
particular, the term "relating to " and the fact that both provisions incl ude a chapeau followed 
subparagraphs – suggest that the analysis of previous reports regarding Article XX apply to the 
interpretation of Article XXI(b), and that the subparagraphs of Article XXI(b) are subject to objective 
review.  This argument ignores ke y differences between Articles XX and XXI.  Those differences 
confirm that Article XXI(b) is self -judging.    
84. Hong Kong, China, argues that other WTO provisions do not support that Article XXI(b) is 
self-judging because those provisions are not self -judgin g.  However, Hong Kong, China, fails to 
acknowledge the text of those provisions.  The language of Article XXI(b) contrasts with other 
provisions in which Members agreed to empower an adjudicator to decide whether a Member could 
plausibly arrive at a certa in conclusion.      
85. Hong Kong, China, claims that the Russia – Traffic in Transit  panel correctly analyzed the 
object and purpose of the GATT 1994 in determining that Article XXI(b) is not entirely self -judging.  
However, that panel identified only a gener al object and purpose of the GATT and WTO agreements 
based on statements by "[p]revious panels and the Appellate Body, " rather than referring to the 
agreements themselves.  Such an approach is not consistent with the customary rules of treaty 
interpretatio n.  Moreover, the security and predictability of the multilateral trading system is not 
well-served by converting it into a forum for security issues.   Nor would such an effort, in the words 
of the preamble to the WTO Agreement, contribute to a "more viab le and durable multilateral trading 
system ".  The GATT 1994 makes available a claim through which an affected Member may seek to 
maintain the level of "reciprocal and mutually advantageous arrangements ", that is, a non -violation 
nullification and impairmen t claim.   
F. A Subsequent Agreement And Recourse to Supplementary Means of 
Interpretation Confirms that Article XXI(b) Is Self -Judging.  
 
86. Hong Kong, China, argues that neither the 1949 decision by the GATT contracting parties 
pursuant to the United States Export Measures  dispute , nor the the Decision Concerning Article XXI 
of the General Agreement (the 1982 Decision), is a subsequent agreement within the meaning of 
Article 31(3)(a) of the VCLT.  Hong Kong, China, further asserts that both decisions support its WT/DS597/R/Add.1  
 
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  interpretation of Article XXI(b).  While the United States agrees that the 1982 Decision is not a 
subsequent agreement, the assertions by Hong Kong, China, are otherwise incorr ect.  The Panel 
should take into account the subsequent agreement reflected in the United States Export Measures  
decision regarding the self -judging nature of Article XXI(b).  The context in which the interpretation 
was adopted by the GATT Council supports this argument. Hong Kong, China, is incorrect to assert 
that finding that the United States Export Restrictions  interpretation is a subsequent agreement 
would mean that all WTO panel and Appellate Body reports would be "subsequent agreements ".  The 
non-binding nature of such reports is established by the text of the WTO Agreement; the WTO 
Agreement explicitly reser ves to the Ministerial Conference and General Council the "exclusive 
authority " to adopt "authoritative interpretation " of a provision of the covered agreements.  The 
1982 Decision supports the interpretation that Article XXI(b) is self -judging, contrary t o the 
assertions by Hong Kong, China.  The preamble to this decision twice acknowledges the self -judging 
nature of Article XXI.   
87. Materials that are proper supplementary means of interpretation under the VCLT confirm 
that Article XXI(b) is self -judging.  H ong Kong, China, misconstrues certain ITO negotiating 
materials, and fails to acknowledge other materials, including the Uruguay Round negotiating 
history, in arguing to the contrary.  Those negotiating materials further confirm that non -violation 
nullific ation and impairment claims are the appropriate recourse with respect to concerns regarding 
another Member 's essential security measures.  While rejecting the relevance of proper negotiating 
history, Hong Kong, China, nonetheless suggests that the Panel sh ould rely on internal documents 
of a single delegation in the interpretative exercise.  There is no basis in the customary rules of 
treaty interpretation for such an approach, and in any event Hong Kong, China, is incorrect to argue 
that those materials su pport an interpretation that Article XXI(b) is self -judging.           
G. Hong Kong, China, Fails to Rebut the U.S. Showing that Article XXI(b) Applies 
to the Claims under the Agreement on Rules of Origin and the TBT Agreement  
 
88. Hong Kong, China, fails to i nterpret the plain text of the covered agreements in their context 
in asserting that Article XXI does not apply to the claims at issue.  Hong Kong, China, does not 
address in any meaningful way either the context served by the single undertaking structure of the 
WTO Agreement or the textual linkages that, as the United States has shown, support the conclusion 
that Article XXI applies to the claims at issue.  
89. Hong Kong, China, fails to recognize the single undertaking structure of the WTO Agreement 
by adoptin g an approach that is not consistent with the customary rules of treaty interpretation as 
the basis for its erroneous conclusion that Article XXI(b) does not apply to the claims at issue.   
90. Hong Kong, China, attempts to dismiss the relevance of the structu re of the WTO Agreement 
as context by mischaracterizing the U.S. explanation regarding applicability as simply an argument 
that the Agreement on Rules of Origin and TBT Agreement "relate in some way to trade in goods. "  
The U.S. explanation, however, does not rely solely on the fact that these agreements all relate to 
goods, but rather on the single undertaking structure established by the text of the WTO Agreement, 
and consideration of the structure of a treaty as context is provided for in the customary r ules of 
treaty interpretation.  The structure of the WTO Agreement does not support a finding that the 
essential security exception necessarily only applies to those Annex 1A agreements that expressly 
incorporate it, as Hong Kong, China, suggests.     
91. Hong Kong, China, suggests that the question of whether Article XXI(b) applies to the claims 
under the Agreement on Rules of Origin and the TBT Agreement can be reduced to two questions: 
whether the non -GATT agreement expressly incorporates the essential secur ity exception, or 
encompasses it by "necessary implication ".  Neither the customary rules of treaty interpretation, nor 
the past reports on which Hong Kong, China, seeks to rely, support the use of this type of two -part 
analysis, or otherwise limit the app licability of Article XXI to those two circumstances.  With respect 
to the "necessary implication " standard suggested by Hong Kong, China, this language is not treaty 
text, nor a standard set forth in the customary rules of treaty interpretation.     
92. Hong Kong, China, maintains that based on its application of the principle of effectiveness, 
finding that Article XXI applies to a non -GATT agreement in the absence of language expressly 
providing as much would render the express incorporations in other WTO agr eements ineffective.  
This purported application of the principle of effectiveness is incorrect.  Article XXI(b) may apply 
without that language, but that does not make the express reference "ineffective ".  A statement WT/DS597/R/Add.1  
 
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  providing additional clarity to the r eader is not "ineffective ", under either customary rules of 
interpretation or as a matter of simple logic.  Having applied those rules and interpreted the terms 
of a treaty in good faith in its context and in light of the treaty 's object and purpose, there  is no 
separate inquiry or principle regarding effectiveness to be applied.  It does not mean that a reading 
in which a provision provides explicit clarity on a matter is "ineffective " simply because a careful 
reading of a provision in its context and in l ight of the treaty 's object and purpose might reach the 
same result.  Thus, the principle does not mean that a treaty should be interpreted in such a way to 
provide effectiveness in the sense that the outcomes would necessarily be different in the absence 
of the language at issue.  Instead, the principle simply means that interpretation should not be 
conducted in a way that makes a provision ineffective.      
93. Hong Kong, China, generally does not engage with the specific textual links between the 
Agreement on Rules of Origin  and the TBT Agreement, respectively, and the GATT 1994.  Instead, 
Hong Kong, China, asserts that those linkages as not "specific " or "objective " and dismisses them 
as general in nature.  The United States disagrees.  In its First Written Submission, the Uni ted States 
identified the various specific linkages among the GATT 1994, the Agreement on Rules of Origin , 
and the TBT  Agreement, which as part of a holistic reading support that the essential security 
exception applies to the provisions at issue in this d ispute.  Further, as explained in the U.S response 
to Question 23, those linkages substantively differ from those at issue in past reports in which the 
linkages between Article XX of the GATT 1994 and a non -GATT agreement were described as 
"general ". 
94. Hong Kong, China, has brought what it characterized as essentially the same claims against 
the same measures under the provisions of three Annex 1A Agreements.  Although Hong Kong, 
China, seeks to distance itself from its previous characterization of its claims  in its responses to the 
questions from the Panel, the overlap between the claims is established by the claims themselves.  
And the relationship between and among the disputed provisions is part of the structural 
consideration, and in turn part of the cont ext for purposes of treaty interpretation, as discussed 
above.  The text of the provisions at issue, and the substantive overlap in terms of the claims 
themselves, establishes that the claims are essentially the same.  The overlap between the claims 
at iss ue is relevant in the interpretative exercise because the relationship between those claims is 
relevant context.  Nothing in the single undertaking structure of the WTO Agreement suggests that 
the MFN principle is different among the agreements, or that Me mbers had a different view of 
essential security with respect to marking requirements if they were also considered to be within the 
larger set of measures defined to be rules of origin or technical regulations.     
95. Furthermore, Hong Kong, China, selectivel y reads the preambles and certain provisions 
within the Agreement on Rules of Origin and the TBT Agreement to argue that Article XXI does not 
apply to the claims at issue, and such selective interpretation is inconsistent with the customary 
rules of treaty  interpretation.  
H. Hong Kong, China, Has Not Established a Breach of the Agreement on Rules of 
Origin, the TBT Agreement, or the GATT 1994  
 
96. Hong Kong, China, has failed to establish a breach of the Agreement on Rules of Origin .  
Hong Kong, China, conflates the result of the application of rules of origin, and the name used to 
reflect that result, with the rules of origin themselves.  In addition to failing to establish that the 
measures at issue are within the scope of the agreement, Hong Kong, Chi na, has otherwise failed 
to establish that they breach Article 2(c) or 2(d).  
97. The Agreement on Rules of Origin  makes a clear distinction between rules of origin that are 
applied to determine origin and used in the administration of certain instruments, and the underlying 
instruments themselves.  The logic behind the argument by Hong Kong, China, appears to be as 
follows: A rule of origin is applied to determine origin for marking purposes; terminology – in the 
present dispute, the words used to indicate orig in – is used in marking; terminology is therefore 
itself a rule of origin.  Hong Kong, China, provides no textual support for this conclusion because 
there is none.  
98. Hong Kong, China, also considers that if the Agreement on Rules of Origin  does not apply t o 
the terminology used in marking requirements, this would mean that the Agreement "does not apply 
to rules of origin used in the application of origin marking requirements " at all.  This is not the case.  
The specific disciplines set forth in the Agreemen t on Rules of Origin  apply to "rules of origin " as WT/DS597/R/Add.1  
 
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  defined in the Agreement "used in the application of " marking requirements.  By its terms, the 
Agreement does not apply to terminology used in marking requirements.  The Agreement on Rules 
of Origin  establ ishes that a "rule of origin " is used to match a good – based on its processing – with 
a certain territorial region.  The Agreement applies to the process  by which origin of a particular 
good is matched to a particular geographic area, and does not mandate  that a Member under its 
marking rules use a particular term for that geographic region.  The Federal Register  notice does not 
make a determination of origin as to any product.  It simply provides, in light of the determination 
in Executive Order 13936, wh at the name would be in the event that – as a result of application of 
the normal rules of origin – a good was determined to have been produced in the area of Hong Kong, 
China.  
99. Hong Kong, China, is incorrect in asserting that the Agreement on Rules of Orig in requires 
that a specific outcome be reached with respect to the origin of a particular good. Nothing in the 
Agreement on Rules of Origin  requires a particular "country " (however defined) to in fact be the 
country of origin for any particular good.  Nor does the Agreement provide that any particular term 
needs to be used to identify that country.  
100.  Hong Kong, China, also failed to establish a breach of the TBT Agreement. As an initial 
matter, Hong Kong, China, does not make a showing that the measure in dis pute falls within the 
scope of the TBT Agreement as a technical regulation.  The initial theory of the case proposed by 
Hong Kong, China, is that it has the burden of establishing that the U.S. measure "detrimentally 
modifies the condition of competition i n the U.S. market. "  Hong Kong, China, has not elaborated or 
expanded on such evidence, and thus has failed to establish a breach of Article 2.1.  In its written 
response to Panel questions, Hong Kong, China, attempts to walk away from its own theory of th e 
case.  It claims that the disputed measure is actually de jure discriminatory; and that "there is no 
need for a panel to evaluate whether any detrimental impact on imports stem exclusively from a 
legitimate regulatory distinction.  Relabeling its allegations as de jure discrimination, however, does 
nothing to advance the argument by Hong Kong,  China.  The term "de jure  discrimination " is found 
nowhere in Article 2.1, and what Hong Kong, China, means by it in the context of this dispute is 
completely unclear.  What is clear is the text of Article 2.1, and Hong Kong, China, needs to establish 
all of the requirements in Article 2.1 to support an allegation of breach.  It has not done so.   
101.  The United States does not agree that there is "no need for additional analysis " in cases in 
which a technical regulation makes an origin -based distinction.  A n origin -based distinction by itself 
may not necessarily lead to treatment that is "less favorable " per the plain meaning of the text of 
Article 2.1.  A complainant must still demonstrate how such origin -based distinction is "less 
favorable. "  The failure by  Hong Kong, China, to make out its case does not excuse it from its burden 
of showing that the measure does not arise from a legitimate regulatory distinction or consider the 
regulatory objective of the measure.     
102.  Hong Kong, China, appears to suggest tha t "essential security interest " need not be taken 
into account when making an assessment of an Article 2.1 claim.  The position of Hong Kong, China, 
with respect to the seventh recital is not surprising, given its position that the U.S. invocation of 
Article XXI(b), and the concerning facts relating to the undermining of the autonomy of Hong Kong, 
China, and the rights and freedoms of its people  that the United States has put forth regarding the 
measures at issue can simply be dismissed.   If the Panel were  to "take into account essential security 
interest " (or in the U.S. view "security interest ") in the assessment of the Article 2.1 claim, as 
suggested by the Panel 's questioning, Hong Kong, China, would have to be in a position to address 
the well-documented concerns on the face of the measures at issue and elsewhere in the record 
about the situation in Hong Kong, China, including the imposition of the National Security Law.  Hong 
Kong, China, has not acknowledged the language of the measures a t issue, or anything else on the 
record in this respect.  
103.  Hong Kong, China, also failed to establish a breach of the GATT 1994.  A s the complainant 
in this dispute, Hong Kong, China, has the burden of establishing each of the elements of a claim 
under Artic le IX:1 with respect to the measures at issue.  Hong Kong, China, has failed to do so.  In 
particular, Hong Kong, China, fails to establish different treatment, much less "less favorable " 
treatment. In addition – as with its claims under the Agreement on R ules of Origin  – Hong Kong, 
China, considers that Article IX:1 of the GATT 1994 prescribes the "actual " country of origin, as well 
as how it is determined, and requires the "full English name " of that country to be used for a mark.  
Hong Kong, China, does not provide any textual support for its conclusion that Article IX:1 imposes 
such a requirement.   Hong Kong, China, asserts that in the present dispute the question of what WT/DS597/R/Add.1  
 
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  constitutes "less favorable treatment " in Article IX:1 of the GATT 1994 is the sam e as what 
constitutes "less favorable treatment " for purposes of Article 2.1 of the TBT Agreement, and 
reiterates its erroneous conclusion that the measures at issue are de jure  discriminatory.  Whatever 
label Hong Kong, China, uses – e.g., de jure or de f acto – it has the burden of proving its claim.  For 
both Article IX:1 of the GATT 1994 and Article 2.1 of the TBT Agreement,  Hong Kong, China, must 
prove that the measure provides for different  treatment, and that the different treatment is less 
favorable  treatment.  Hong Kong, China, has not done so.  The claims by Hong Kong, China, under 
Article I:1 of the GATT 1994 suffer similar flaws as its claims under Article IX:1.      
I. The Only Finding The Panel May Make Consistent with the DSU is to Note the 
United States' Invocation of Article XXI  
 
104.  In light of the self -judging nature of Article XXI(b) and the U.S. invocation with respect to 
the claims at issue, the sole finding that the Panel may make consistent with the terms of reference 
and the DSU is to note the U.S. invocation.  Hong Kong, China , argues that Articles 3.2, 3.3, 7.2, 
11, 23.1, and 23.2(a) of the DSU indicate that Article XXI(b) is not self -judging, and compel a panel 
to make a recommendation as to whether an essential security measure is consistent with WTO 
obligations or should be  modified or withdrawn.  Hong Kong, China, does not interpret the terms of 
these, or any other, DSU provisions as written in making these arguments.  Hong Kong, China, also 
fails to recognize the availability of non -violation nullification and impairment c laims as a recourse.    
V. EXECUTIVE SUMMARY OF THE U.S. OPENING STATEMENT AT THE SECOND 
SUBSTANTIVE HEARING  
 
105.  The measures in dispute on their face make clear the essential security interests at stake.  
The United States has supplied the Panel with various evidence on how those U.S. essential security 
concerns have indeed since materialized.  Hong Kong, China, has  never disputed or contested any 
of those facts.  The Panel is presented with the fundamental question as to the role of the multilateral 
trading system in such matters.   
106.  The self -judging nature of Article XXI(b) of the GATT 1994 is established by the tex t of that 
provision, in its context, and in light of the treaty 's object and purpose.  Hong Kong, China, suggests 
reading a good faith obligation into the text of Article XXI(b).  However, under the DSU, panels are 
limited to examining the consistency of c hallenged measures with cited provisions of "covered 
agreements ".  Nothing in the text of the provisions of the covered agreements at issue, including 
Article  XXI(b), provides for a good faith obligation.   
107.  Although the U.S. position is that, in light of t he self -judging nature of Article XXI(b), it is 
not compelled to invoke and make an evidentiary showing with respect to a specific subparagraph, 
Hong Kong, China, is also incorrect to assert that the United States has made no articulation of its 
essential security interests in this dispute.   
108.  The United States has shown, using the customary rules of treaty interpretation, that 
Article  XXI(b) applies to the claims at issue under the Agreement on Rules of Origin and the TBT 
Agreement.  Hong Kong, China, incor rectly rejects the relevance of the structure of the WTO 
Agreement as context under those rules, both in terms of the overlapping nature of the claims at 
issue and the balance of rights and obligations provided by the single undertaking.    
109.  Hong Kong, Chin a's claim that the marking requirement at issue breaches the Agreement 
on Rules of Origin  is based on a number of fundamentally flawed arguments with respect to the 
scope of the Agreement, as well as a mischaracterization of the measures at issue and their  basis.   
110.  Hong Kong, China, also fails to establish a breach of the TBT Agreement.  Hong Kong, China, 
does not show how the disputed measure actually accords "less favorable " treatment under Article 
2.1 of the TBT Agreement on the basis of an origin -based discrimination.  Second, Hong Kong, China, 
fails to engage with the regulatory objective of the disputed measure.  Third, the detrimental impact 
claims by Hong Kong, China, are baseless.    WT/DS597/R/Add.1  
 
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  VI. EXECUTIVE SUMMARY OF THE U.S. RESPONSES TO PANEL'S SECOND SET OF 
QUESTIONS  
 
U.S. Responses to Questions 68 -82   
 
111.  The mere requirement to employ a certain country name in product marking is not sufficient 
to establish detrimental impact.  The fact that goods are marked with "China " simply reflects the 
fact that all im ports must be marked using the terminology determined by the United States.  This 
by itself does not constitute evidence of detrimental impact, much less "less favorable treatment ", 
and the response would be no different depending on whether the Member in question is a separate 
customs territory.  To recall, the purpose and overall concern of the marking requirement at issue 
is not origin -based.  The determination with respect to the autonomy of Hong Kong, China, stems 
from the global U.S. concern for funda mental freedoms, human rights, and integrity of democratic 
institutions.  Interpreting a measure and its impact, if any, must take into account not only the text 
of the measure, but also its regulatory objective and purpose.  Formally different treatment o f like 
products from different sources does not mean there is "less favorable " treatment.  
112.  Assessment under Article 2.1 is a holistic examination of all the facts and circumstances, 
including finding a rational linkage between and among the detrimental impact, the regulatory 
purpose, or facts and circumstances that may provide an origin -neutral explanation.  As for what 
the United States means by rational linkage or relationship as it pertains to the measure, the 
meaning is twofold:  one, whe ther the regulatory distinction is apt to advance the origin -neutral 
purpose (here, the United States determined that Hong Kong, China, lacks sufficient autonomy vis -
à-vis the People 's Republic of China, and therefore differential treatment was suspended);  two, 
whether detrimental impact naturally flows from the origin -neutral regulatory distinction.  Hong 
Kong, China, has refused to engage with the regulatory objective, even as reflected on the face of 
the measure, and insists that there is "no need for ad ditional " analysis because the "sufficient 
autonomy condition " applies only to Hong Kong, China.   
113.  Hong Kong, China, has not shown under its various theories either that the United States 
determines country of origin for Hong Kong, China, in a manner diffe rent than for any other WTO 
Member; that the United States determines the "actual " country of origin for marking purposes 
differently; or that "China " may not be the "English name " for marking purposes.  The United States 
questions what purpose a mark of o rigin that is contrary to a Member 's determination regarding the 
autonomy or territory of a country would serve.  The U.S. determination with respect to lack of 
autonomy in Hong Kong, China, clearly establishes  why Hong Kong, China, is not entitled to 
treatment distinct from treatment of the People 's Republic of China for purposes of marking, such 
that "China " is not "mislabeling ".  Hong Kong, China, is simply dissatisfied with the U.S. 
determination that it is no longer sufficiently autonomous from the Peo ple's Republic of China for 
purposes of U.S. law.   
U.S. Responses to Questions 84 -93  
 
114.  The basis for considering the legal structure of a treaty is the customary rules of treaty 
interpretation, which calls for interpretation of the text, in its context and in light of the treaty 's 
object and purpose.  The structure of the treaty is context in this exercise.  Basic logic and sound 
reasoning are – quite obviously – necessary for applying the customary rules of treaty interpretation.  
To not apply l ogic would run directly contrary to Article 31 of the VCLT, which provides for a treaty 
to be interpreted "in good faith " in accordance with its text.  It is only through logic and reasoning 
that, for example, a treaty interpreter can analyze what is the "ordinary meaning " of a treaty term 
or how any particular element of context can affect the interpretation of a particular treaty provision.  
And conversely, treaty interpretation is not supposed to produce absurd results and interpretations.   
115.  Under the ar guments by Hong Kong, China, a claim of less favorable treatment with respect 
to a marking requirement would be subject to a higher level of justification – in the sense that a 
Member seeking to protect its essential security interests with respect to such  a requirement would 
have no recourse to an essential security exception – if that marking requirement were also a rule 
of origin or a measure disciplined by the TBT Agreement, because Hong Kong, China, considers that 
Article XXI(b) does not apply to any c laims under those agreements even if those claims are virtually 
the same. This would diminish a Member 's right to act to protect its essential security interests and 
to invoke Article  XXI(b) with respect to marking requirements (including with respect to WT/DS597/R/Add.1  
 
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  substantively the same claims of origin -based discrimination) – even though they are specifically 
recognized by and disciplined by the GATT 1994.    
U.S. Responses to Questions 94 -126   
 
116.  All of the elements in the text of Article XXI(b), including each subparagraph ending, are 
part of a single relative clause, and they are left to the determination of the Member.  Specifically, 
because the operative language is "it considers, " Article XXI( b) reserves for the Member to decide 
what action it considers "necessary for " the protection of its essential security interests and which 
circumstances are present.  In that sense, the phrase "which it considers " "qualifies " all of the 
elements in the rel ative clause, including the subparagraph ending.  The legal effect is that the 
provision is self -judging in its entirety.  In other words, the text of Article XXI(b) reserves for the 
Member the determination of what it considers necessary for the protectio n of its essential security 
interests in the circumstances set forth.  
117.  The English, French, and Spanish texts can be reconciled, as called for under Article 33 of 
the VCLT. The United States has not identified any rule that would prevent the word "considers " in 
Article  XXI(b) from relating to both the phrases beginning with "necessary " and "taken " without 
there being a connector between those phrases in either English, French, or Spanish.  To the 
contrary, the absence of a connector between the three (logically separate) subparagraph endings 
strongly suggests parallelism between those endings – that is, that each subparagraph ending 
completes the relative phrase ( "which it considers ") that precedes it.   
118.  The post -1947 revisions to the Havana Charter essential security provisions, including the 
modification at the end of the chapeau, were not adopted  during the Uruguay Round, reflecting that 
negotiators did not intend to incorporate whatever subsequent changes might have gone into the 
ITO text into Article XXI(b).     
119.  The report in Russia – Traffic in Transit does not reflect an interpretation of Arti cle XXI(b) 
consistent with the customary rules of treaty interpretation.  There is no basis in those rules for 
rejecting the interpretation such an examination yields in favor of an inquiry into either the "logical 
structure " of a provision, or whether a p rovision is "capable of objective determination ".  The DSU 
makes clear that it is the text of the relevant agreement(s) that determines how a panel should 
assess a Member 's invocation of Article XXI(b).  T he Russia – Traffic in Transit panel erred in findi ng 
that the existence of the circumstances in the subparagraphs is subject to review by a panel.  In 
reaching this finding, the panel discounted its own conclusion that the meaning of the words and the 
grammatical structure supported the interpretation tha t Article XXI(b) is self -judging in its entirety, 
and instead conducted an inquiry into whether the subject matter of the subparagraphs is capable  
of objective determination – an inquiry that is not called for under the customary rules of treaty 
interpreta tion.  The ordinary meaning of the phrase "other emergency in international relations " in 
Article XXI(b)(iii) is broad.   Contrary to statements by the panel in Russia – Traffic in Transit , nothing 
in the text somehow limits an "other emergency in internati onal relations " under Article XXI(b)(iii) 
to an emergency similar to "war", or to situations "giv[ing] rise to defence and military interests, or 
maintenance of law and public order interests. "  Likewise, nothing in the text of Article XXI(b)(iii) 
limits an "emergency in international relations " to a specific territorial area, that is, one "engulfing 
or surrounding  a state ".  
120.  Because Article XXI(b) is self -judging, the Panel need not, and should  not, assess the 
existence of an emergency in international relations.  To the extent that the Panel nonetheless 
chooses to assess the merits of the U.S. invocation, the United States has submitted extensive 
evidence into record that supports the U.S. invo cation of Article XXI(b), as well as the existence of 
an emergency in international relations.  Were the Panel to review whether the circumstances at 
issue constitute an "emergency in international relations ", the views of other countries regarding the 
situation with respect to Hong Kong, China, could support a finding that there is such an emergency.   
The fact that multiple countries share the U.S. concerns also shows the baselessness of the 
accusations by Hong Kong, China, during the second videoconferenc e that those concerns are not 
sincere.  
121.  The conclusion of the Russia – Traffic in Transit report that Article XXI(b) is subject to a good 
faith obligation is not based in the customary rules of treaty interpretation.  The U.S. concerns with 
the panel 's appr oach do not relate to whether Members are to implement their obligations in "good 
faith" under international law.  The United States understands that they are – indeed, the United WT/DS597/R/Add.1  
 
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  States understands further that Members are presumed to act in good faith.  However, under the 
DSU, the WTO dispute settlement system has a limited mandate, which is to determine conformity 
with the "covered agreements, " and not international law more generally.  In other words, there is 
no basis in the DSU for examining the consi stency of a Member 's action with Article 26 of the VCLT, 
or with a principle of good faith more generally.  These are not provisions of the "covered 
agreements ". 
VII. EXECUTIVE SUMMARY OF THE U.S. COMMENTS ON RESPONSES BY HONG KONG, 
CHINA, TO THE SECOND SET OF PANEL QUESTIONS  
 
U.S. Comments on Questions 68 -82   
 
122.  Hong Kong, China, appears to suggest that an "origin -based distinction " in some instances 
itself establishes "detrimental impact " (such that there is no need for an evidentiary showing of s uch 
impact), and that is what it refers to as "de jure " discrimination.  This position is untenable.  The 
only alleged support that Hong Kong, China, offers for  its conclusion is a quote of a single statement 
from the European Union 's third party submissio n.  However, the European Union 's submission does 
not itself explain the basis for this statement, nor does the United States understand the EU 
statement to support Hong Kong, China 's approach.     
123.  Hong Kong, China 's view that there is no need to account f or the regulatory purpose of a 
measure in cases of what it calls "de jure " discrimination is not based in the text of Article 2.1, but 
rather is based on its reading of certain past dispute settlement reports.  Notwithstanding that those 
reports do not sta nd for the proposition that Hong Kong, China, asserts, the task of the Panel is to 
interpret the provisions at issue in accordance with the customary rules of treaty interpretation.  The 
United States notes that the prior reports on which Hong Kong, China,  seeks to rely (in lieu of the 
text of Article 2.1) in support of its argument that no regulatory analysis is required in cases of "de 
jure" discrimination did not address a measure that inherently makes distinctions on the basis of 
origin, such as a mark of origin requirement.  Those reports also did not define or clarify what a "de 
jure" discrimination finding would look like in the context o f Article 2.1 of the TBT Agreement, and 
especially in the context of measures relating to actions necessary to protect an "essential security 
interest. "  Moreover, those reports never mentioned that there is "no need for additional analysis " 
or even consid eration of the regulatory objective under certain circumstances when it comes to the 
examination of a disputed measure.   
124.  Hong Kong, China, makes no effort to address the absurd results of its interpretation 
regarding "justification " of measures under Arti cle 2.1 as opposed to under nondiscrimination 
provisions of the GATT 1994.  Hong Kong, China 's interpretation would significantly constrain policy 
space for Members to maintain technical regulations under the TBT Agreement, even if the policy 
objective is one that the TBT Agreement explicitly recognizes as legitimate. That is, according to 
Hong Kong, China, while a Member may defend a breach of GATT III:4 under one of the Article XX 
subparagraphs, there can be no "justification " for the exact same regulatio n under an Article 2.1 
claim if the regulation is what Hong Kong, China, characterizes as "de jure " discriminatory, 
regardless of the regulatory objective.  
U.S. Comments on Questions 84 -93   
125.  Hong Kong, China, suggests that modifying the GATT 1947 in the GA TT 1994 to provide that 
Article XXI applies to the other Annex 1A agreements "would have been a simple matter ".  This 
assertion is just fiction, without any basis.  Indeed, incorporating the GATT 1947 into the GATT 1994 
was not a "simple matter ", and editi ng the GATT 1947 itself was not necessarily even considered 
possible.   
126.  Hong Kong, China, purports to recognize that the "specific relationship " among the 
agreements and their provisions must take into account this single undertaking structure as context.  
But then Hong Kong, China, simply ignores this structure and repeats its unsupportable arguments 
about the applicability of Article XXI.  Indeed, within a few sentences of recognizing the overall 
structure, it rehashes its stale arguments that each of the se agreements are "distinct " and essentially 
must be interpreted in a vacuum reflecting their "own balance of rights and obligations. "  Rather 
than conducting a text -based rebuttal of the U.S. application of the customary rules of treaty 
interpretation with respect to the interpretative question at issue, the response by Hong Kong, China, 
relies on prior reports addressing the applicabil ity of Article XX.  In addition, Hong Kong, China, fails WT/DS597/R/Add.1  
 
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  to address the differences between Article XX and Article XXI for purposes of the analysis in this 
dispute.   
127.  Hong Kong, China 's understanding of a Member 's rights under Article XXI(b) is not only 
flawed, but also alarming.  According to Hong Kong, China, the structure of the WTO Agreement 
reflects that a WTO Member has no right to take actions that it considers necessary to protect its 
essential security interests – in any circumstances – under at le ast "ten other [WTO] agreements ". 
The dangerous consequences of this position are laid bare by the current circumstances facing 
Ukraine and the Ukrainian people in the wake of the unjustified invasion by the Russian Federation.  
The United States considers , consistent with its views expressed in this dispute, that Ukraine is well 
within its rights to suspend application of the WTO agreements in Annex 1A other than the GATT 
1994 to the Russian Federation.  The current situation makes clear the absurdity, and  the 
dangerousness, of the argument that drafters of the Uruguay Round simply chose to relinquish their 
respective rights to take essential security actions under those agreements (for example, because 
they did not expressly incorporate Article XXI(b) into  certain agreements).    
128.  Furthermore, Hong Kong, China, fails to acknowledge that the United States has also shown 
the various text -based linkages that establish that Article XXI applies to the specific claims at 
issue under the agreements at issue.  Hong Kong, China 's claim that the U.S. interpretation in that 
regard would apply with respect to Article XX is not only incorrect in light of the differences between 
Article XX and Article XXI(b) that the United States has identified throughout this dispute, bu t it also 
ignores the specific interpretive issue at hand.  The overlap between the claims is established by the 
nature of the claims themselves – that is, for all of its claims, Hong Kong, China, is claiming that it 
is subject to a requirement (considerat ion of autonomy, and in turn marking as "China ") that other 
Members are not, in a way that it is impermissibly discriminatory.  And the relationship between and 
among the disputed provisions is part of the structural consideration, and in turn part of the context 
for purposes of treaty interpretation.    
U.S. Comments on Questions 94 -126   
 
129.  Contrary to Hong Kong, China 's suggestion, the United States is not asking the Panel to use 
"interrogative powers " with respect to its invocation of Article XXI(b).  The United States does not 
ask the Panel – or anyone else – to make its case for it.  To be clear, because Article XXI(b) is self -
judging by its terms, a Member invoking that provision has no further case  to make.  Even though 
Article XXI(b) is self -judging and a panel should not review a Member 's essential security decisions, 
the United States in fact has provided ample evidence on this issue.  Thus, Hong Kong, China, is 
incorrect to assert that the Unite d States has provided no evidence or argument to support its 
invocation of Article XXI(b).   
130.  It appears that Hong Kong, China, considers that a WTO Member may not validly consider 
events anywhere outside its territory to be an emergency in international re lations or part of its 
essential security interests.  While this position might reflect Hong Kong, China 's appraisal of its own 
security interests, to the extent Hong Kong, China, even retains the capacity to do so, it is not the 
place of Hong Kong, China,  or Chinese authorities, to make that determination for other Members 
who may choose to take action in response to terrible situations well beyond their borders in light 
of their own appraisal of their essential security interests in those circumstances.  Hong Kong, 
China 's position has no basis in the text of Article XXI(b) and should be rejected by this Panel.   
131.  Hong Kong, China 's conclusion in its response underscores why negotiators agreed, in the 
text of Article XXI(b), that the assessment of whether a situation constitutes an "emergency in 
international relations " such that a Member would act to protect "its" essential securit y interests 
would be left to the Member .  Hong Kong, China, apparently considers that concerns about freedom 
and democracy, or concerns about events outside a Member 's territory, are not and cannot be 
essential security interests, and may not give rise to an emergency in international relations.  The 
United States does not agree, as is clear from the face of the measures at issue and the other 
evidence that the United States has submitted.   
132.  Hong Kong, China, seeks to establish to the contrary by citing fir st the title of Article XXI, 
Security Exceptions.  The title of a provision is context, and the operative language of Article XXI(b) 
itself refers to "its essential security interests ", and reflects a Member 's right to take "any action 
which it considers n ecessary for the protection of " those interests.  The ordinary meaning of the WT/DS597/R/Add.1  
 
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  terms of Article XXI(b) establishes that "essential security interests " are not limited to "defense and 
military interests, as well as maintenance of law and public order interes ts".   
133.  Hong Kong, China, also now appears to suggest that Article 31 of the VCLT imposes a good 
faith obligation on WTO Members that is reviewable by a panel.  This suggestion is also not based 
in the text of either the DSU or Article 31 itself.  
 
_________ ______  
 
 
 WT/DS597/R/Add.1  
 
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  ANNEX  C 
ARGUMENTS OF THE THIRD PARTIES  
Contents  Page  
Annex  C-1 Integrated executive summary of the arguments of Brazil  63 
Annex  C-2 Integrated executive summary of the arguments of Canada  66 
Annex  C-3 Integrated executive summary of the arguments of China  71 
Annex  C-4 Integrated executive summary of the arguments of the European Union  73 
Annex  C-5 Integrated executive summary of the arguments of Japan  77 
Annex  C-6 Integrated executive summary of the arguments of Norway 80 
Annex  C-7 Integrated executive summary of the arguments of the Russian Federation  84 
Annex  C-8 Integrated executive summary of the arguments of Singapore  89 
Annex  C-9 Integrated executive summary of the arguments of Switzerland  94 
Annex  C-10 Integrated executive summary of the argument s of Ukraine  99 
 
 
 WT/DS597/R/Add.1  
 
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  ANNEX C -1 
INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF BRAZIL  
INTRODUCTION  
1. Brazil provides the following executive summary of its participation during the panel 
proceedings in this dispute.  
1.  CLAIMS UNDER ANNEX 1A AGREEMENTS  
1.1  Agreement on Rules of Origin  
2. Brazil understands that the term "country" is not defined by the rules of the ARO. Instead, the 
ARO sets rights and obligations that Members must follow when establishing their national rules and 
laws set to determine the country of origin of goods. These rules must be applied in a non -
discriminatory form, as recognized by Article IX:1 of the GATT 1994.  
3. Brazil acknowledges  that the explanatory notes to the WTO Agreement state that the term 
'country' or 'countries' may include separate customs territorie s Member of the WTO. However, this 
does not necessarily entail that Members are required to arrive at a determination on what 
constitutes a "country" in order to establish the country of origin of a good. Like Canada1, Brazil 
considers that Hong Kong, Chi na may be defined as the country of origin for marking purposes, yet 
nothing in the ARO makes such a marking mandatory on other Members.  
4. Brazil understands that Article 2 of the ARO establishes rules that Members must follow when 
defining their laws, re gulations, and administrative procedures applied to determine the country of 
origin of goods. The ARO does not directly prescribe, however, the manner in which Members are 
supposed to recognize the territorial boundaries of other Members. Instead, it allow s considerable 
discretion in designing and applying national rules of origin, creating a general set of rules that limit 
the scope of regulatory action by Members.  
1.2  Agreement on Technical Barriers to Trade (TBT Agreement)  
5. Brazil  observes that the TB T Agreement does not reproduce the structure and language of 
Article XXI, neither in its operative part nor in its preamble. In Articles 2.2, 2.10, and 5.4 of the TBT, 
"national security requirements" or "national security" appear alongside other "legitima te 
objectives", "problems" or "reasons" such as the protection of human health or the environment. 
Therefore, the framing of the protection of essential security interests is qualitatively different in the 
GATT 1994 and in the TBT Agreement.  
6. The analys is of whether a technical regulation accords "less favorable treatment" under 
Article  2.1 of the TBT Agreement would involve two steps in Brazil's view: (i) whether the technical 
regulation modifies the conditions of competition to the detriment of importe d products vis-à-vis like 
products of domestic origin and/or like products originating in any other country; and (ii) whether 
the detrimental impact on imports stems exclusively from a legitimate regulatory distinction.  Brazil 
submits that this analysis wo uld reflect the specific text, context, and object and purpose of the TBT 
Agreement, and would be fully capable of taking into account a situation where a technical regulation 
is motivated by essential security interests.  
7. Moreover, Brazil considers that  the expression "less favorable" treatment is qualitatively 
different under Article 2.1 of the TBT Agreement and Article IX of the GATT. When assessing this 
difference, the panel may take into consideration the interpretation offered by the Appellate Body,  
in the US – COOL dispute, that the obligations regarding marking requirements "are separate from, 
and additional to, the national treatment obligation in Article III:4 of the GATT 1994".2 Brazil 
 
1 Canada 's Third -Party Submission, para. 6  
2 Appellate Body Report, US – COOL, para. 269.   WT/DS597/R/Add.1  
 
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  understands that those findings may offer some guidance in the comparison of Article IX of the GATT 
and Article 2.1 of the TBT.  
2.  APPLICABILITY AND NATURE OF ARTICLE XXI(B)  
8. Brazil sustains that Article XXI is justiciable and subject to review by panels. Members may 
not use Article XXI indiscriminately to depart from its other obligations set out in the covered 
agreements. A n unconstrained "self -judging" security exception could lend itself to abuses that 
would ultimately defeat the object and purpose of the WTO. This view is also confir med by the 
negotiating history of the GATT, as noted by the panel in Russia – Traffic in Transit.3 
9. Brazil understands that the assessment of Article XXI(b) entails a two -step analysis, formed 
by subjective and objective elements. First, in the objectiv e part of its analysis, a panel should assess 
if at least one of the circumstances in the exhaustive list of paragraphs (i), (ii), and (iii) is present. 
It is not enough for a Member to simply "refer" to the circumstances enumerated in Article XXI(b) 
witho ut providing any further information about the objective situation at hand.  
10. Regarding the circumstances of Article XXI(b)(iii), especially the term "other emergency in 
international relations", Members do not have unfettered latitude to define what an  emergency in 
international relations is for the purposes of invoking Article XXI(b)(iii). The reading of subparagraph 
(iii) should, therefore, be done in light of subparagraphs (i) and (ii), and also in light of its relation 
to defense and military intere sts or situations of maintenance of law and public order interests, as 
portrayed by the panel in Russia – Traffic in Transit.4  
11. Secondly, a panel should proceed to the analysis of the subjective component in Article XXI(b), 
namely the element of "nece ssity", and also of the relation of the measure at issue with the "essential 
security interests" that a Member seeks to protect.  
12. Since the recourse to exceptions is in the nature of an affirmative defense , it is the burden of 
the Member invoking Artic le XXI(b)(iii) to adduce sufficient evidence that the challenged measures 
were taken in time of an emergency in international relations. Even if a Member chooses not to 
disclose any information to panels, this does not precludes panels from assessing the c ase at hand, 
pursuant to Article 3.7 of the DSU and the obligation to find "a positive solution to a dispute".  
13. Brazil also underscores that Members affected by measures under Article XXI may resort to 
non-violation nullification or impairment claims. However, the fact that a party may decide to present 
a claim under Article XXIII:1(b) of the GATT and Article 26 of the DSU against a given measure 
bears no relation to the question of whether Article XXI is a self -judging provision or not. 
Complainants be ar the right to present both a violation complaint and, in the alternative, a non -
violation complaint regarding measures adopted under Article XXI. Furthermore, Brazil observes 
that, according to previous panels, non -violation claims place a heavier burden  of proof on the 
complainant.5 To assume that Article XXI could only be challenged by a recourse to Article XXIII:1(b) 
could, therefore, create an imbalance in the rights and duties of Members.  
14. Regarding the relation of Article XXI of the GATT with other covered agreements, Brazil 
observes that, when the drafters of the multilateral agreements intended to include security (or 
other) exceptions under their provisions, they explicitly did so. For example, Article 3 of the 
Agreement on Trade -Relate d Investment Measures (TRIMs), Article 1.10 of the Agreement on Import 
Licensing Procedures, and Article 24:7 of the Agreement on Trade Facilitation all explicitly refer to 
the GATT exceptions, thus welcoming the application of Article XXI into their disci plines. Article 73 
of the TRIPS Agreement, in turn, explicitly duplicated the text of Article XXI.  For these reasons, to 
argue that the security exceptions of Article XXI of the GATT 1994 apply to all multilateral 
agreements, including those which do not c ontain an express provision to that effect, would amount 
to reduce the abovementioned clauses to redundancy or inutility, a reading contrary to the tenets 
of text -based interpretation of the covered agreements.  
15. In the case of the TBT Agreement, Brazil  concludes, in light of the aforementioned, that, if the 
drafters had wanted to incorporate the provisions of Article XXI fully into the TBT Agreement, they 
 
3 Panel Report, Russia – Traffic in Transit, para. 7.90.  
4 Panel Report, Russia – Traffic in Transit , para. 7.75.  
5 Panel Report, Japan – Film, para. 10.30.  WT/DS597/R/Add.1  
 
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  would have explicitly done so. Yet, Members decided to frame the protection of security interests 
under Article 2.2 in a different manner, as one of the "legitimate objectives" that a Member may 
seek to fulfill by means of a technical regulation. This confirms the view that Article XXI has its 
application limited to the provisions of the GATT 1994 or to  those instances in which a covered 
agreement explicitly introduces Article XXI into its disciplines. In the case of the Agreement of Rules 
of Origin, the absence of any mention to security interests does not allow panels to 'fill the gap" by 
adding legal provisions that are not there or importing concepts that were not intended by its parties.  
16. Finally, Brazil understands that, when assessing an exception under Article XXI, a panel must 
begin its analysis with the complainant's claims. Even if the resp ondent does not contest these 
claims, or if it refuses to provide any further information regarding its measures under Article XXI, 
a panel must proceed to the assessment of the case before it, aiming to secure "a positive solution 
to a dispute" pursuant A rticle 3.7 of the DSU.  
 WT/DS597/R/Add.1  
 
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  ANNEX C -2 
INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF CANADA  
I. INTRODUCTION  
 
1. The following submission sets out the main arguments of Canada in the case at hand.  
Specifically, Canada's views with respect to the applicability of the Agreement on Rules of Origin 
(ARO), the Agreement on Technical Barriers to Trade (TBT Agreement) and the GATT 1994 to the 
measures at issue, as well as the interpretation and application  of the essential security exception 
found in Article XXI of the GATT 1994.  
II. AGREEMENT ON RULES OF ORIGIN  
 
2. In Canada's view, the provisions of the ARO at issue in this dispute do not discipline a 
Member's determination of the particular country that must be marked as the country of origin or 
what a Member must take into consideration when determining what const itutes a "country" for 
country of origin marking purposes.  Rather, the provisions at issue govern the substantive origin 
requirements that must be met for a good to obtain a certain origin status. This includes 
requirements such as manufacturing or proces sing that must be met before a particular origin will 
be conferred.  The provisions do not discipline or dictate what the actual  country of origin must be.  
3. The definition of country in the Explanatory Notes to the WTO Agreement does not set out a 
conclusiv e definition of what constitutes a "country", or how a Member must arrive at that 
determination, but rather uses the term "includes" to signify that the term is to be understood to 
encompass separate customs territories.  
4. The definition therefore results in  a situation wherein Hong Kong, China may be used as the 
country of origin for marking purposes, but neither the definition nor the provisions of the ARO 
require  that this be the case.   
5. In the case at hand, the United States has chosen to look to territor ial boundaries and the 
exercise of sovereignty in its assessment as to what constitutes a "country" for marking purposes 
under its domestic law.  In Canada's view, neither the Explanatory Note to the WTO Agreement nor 
the ARO precludes the United States fr om doing so.   Rather, in Canada's view, this is a determination 
that is firmly within the right of WTO Members to make. Such a determination is not a "rule of origin" 
per se , and therefore not governed by the ARO.  The ARO governs rules that determine whet her a 
product originates in a particular country, not the identification of  that particular country.  Moreover, 
there is nothing in the ARO or the WTO Agreements more generally that requires that the "country" 
for country of origin marking purposes must be  the same as an identified separate customs territory  
III. TBT AGREEMENT  
 
6. Canada considers that, as a threshold matter, Hong Kong, China as the complainant has the 
burden of articulating how the country of origin labelling or marking measure at issue sets out a 
product characteristic or applies to a product and is therefore a "technical regulation".  
7. Canada  questioned whether  the "essential and integral aspect"1 of the measure at issue in 
this dispute is in fact the "marking requirement" discussed at parag raphs 50 -52 of Hong Kong, 
China's first written submission, or whether it is the "determination" by the United States that, for 
goods produced in Hong Kong, China, the country of origin is China.  In its first written submission, 
Hong Kong, China has not m ade any representations in this regard.  
8. If the Panel finds that the measure is a technical regulation, it must examine the elements of 
the test under Article 2.1 to determine whether Hong Kong, China has made a prima facie  case of a 
violation.  Pursuant to  the test for whether a measure accords less favourable treatment under 
Article 2.1, the Panel must assess whether the US requirement that imports from Hong Kong, China 
be marked as products of China results in detrimental impact on those products.  Canada  considers 
 
1 See Appellate Body Report, EC – Seal Products , para. 5.19 . WT/DS597/R/Add.1  
 
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  that if the Panel agrees that the United States is permitted under WTO rules to determine that, for 
origin marking purposes, the country of origin for goods produced in Hong Kong, China is China , 
then the burden to mark those goods as products o f China is the same for Hong Kong, China as it is 
for other WTO Members.  In that case, any burden would not be additional  and Hong Kong, China 
would not be denied  any treatment accorded to other Members.   
9. If the Panel finds that the measure is a technica l regulation that results in detrimental impact 
on goods from Hong Kong, China the Panel must then consider the applicability of the second 
element of the test under Article 2.1 -- whether the detrimental impact stems from a legitimate 
regulatory distincti on (LRD). Canada considers that the legitimate regulatory distinction element of 
Article 2.1 can apply whether the alleged discrimination is de jure  or de facto .  In Canada's view, it 
is conceivable that an origin -based distinction could be an LRD.   
10. An argument that the LRD test applies only to de facto  discrimination would mean that the 
TBT Agreement did not permit WTO Members to take measures that might result in de jure  
discrimination, at any time, for any reason.  In contrast, under Articles I and  III of the GATT, if a 
measure results in de jure  discrimination, that measure can in principle still be justified by the 
Member under an exception in the GATT, i.e., one of the sub -paragraphs of Article XX or Article XXI.  
The balance set out in the pream ble of the TBT Agreement between, on the one hand, the desire to 
avoid creating unnecessary obstacles to international trade and, on the other hand, the recognition 
of Members' right to regulate, is not, in principle, different from the balance set out in the 
GATT  1994, where obligations such as national treatment in Article III are qualified by the general 
exceptions provision of Article XX.2 
11. Canada notes that Hong Kong, China has not addressed the second element and, as a result, 
may not have met its burden of establishing a prima facie case that the US measure violates 
Article  2.1 of the TBT Agreement.  If the panel finds that Hong Kong, China has not discharged its 
burden of proving each element of the test, then the claim must fail.  
IV. GATT 1994 NO N-DISCRIMINATION OBLIGATIONS  
 
12. Under Article I:1, the Panel must assess whether the United States has failed to accord to 
Hong Kong, China an advantage, favour, privilege, or immunity that it accords to other WTO 
Members.  Similar to Canada's views expresse d with respect to Article 2.1 of the TBT Agreement, it 
has not.   
13. In respect of its Article IX obligations, the United States requires WTO Members to mark goods 
as from the country in which they originate.  If the United States validly determines that Chin a is 
the country of origin for goods from Hong Kong, China, then it is treating Hong Kong, China the 
same as all other Members, for which it determines country of origin based on a set of objective 
criteria.  
V. ARTICLE XXI OF THE GATT 1994  
 
14. Canada affirmed  its view that the essential security exception in Article XXI of the GATT is an 
exception, to be invoked only once a violation of a substantive obligation has been found.  Further, 
that Article XXI is not self -judging and has both objective and subjective  elements.  In light of the 
panel report in Russia – Traffic in Transit , in which the Panel made findings on the essential security 
exception in Article XXI(b)(iii) of the GATT 1994, Canada's view is that the correct test and standard 
of review for the ess ential security exception involves a combination of subjective and objective 
elements. Namely:  
• The subjective element of the test is found in the chapeau of paragraph (b), such that the 
invoking Member need demonstrate only that it considered its measures to be necessary to 
protect its essential security interests.  
 
2 See Appellate Body Report, US – Clove Cigarettes , para. 96.  WT/DS597/R/Add.1  
 
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  • The objective element of the test is contained in the subparagraphs of paragraph (b) and in 
the relationship between the subparagraphs and the measures adopted by the invoking 
Member.  
15. Canada agre es with the Panel in Russia – Traffic in Transit  that a panel must objectively 
determine that there is a "war or other emergency in international relations" for a measure to fall 
within the scope of the provision.3 
16. Further, it is Canada's view that a pane l's assessment of whether the requirements of 
Article  XXI(b) (iii) have been met must include a determination of whether there is a "sufficient 
nexus" between the measure adopted by the invoking Member and the circumstances set out in 
subparagraph (iii).  Examining whether there is a "sufficient nexus" involves, first, a determination 
that the measures were taken contemporaneously with the "war or other emergency in international 
relations".  The words "taken in" in the text indicate the need for this tempo ral connection.  Second, 
a panel must be satisfied that there is a sufficient nexus, or link, between the measures at issue and 
the war or other emergency  
17. The requirements of subparagraph (iii) cannot be satisfied with a mere assertion by the 
invoking Mem ber that there is a "war or other emergency".  This is because such as interpretation, 
if adopted, would result in reducing subparagraph (iii) to redundancy.  Meaning must be ascribed to 
the fact that Members chose to specify circumstances in which the sec urity exceptions could be 
invoked.  An interpretation that fails to require a Member to demonstrate that such a circumstance 
objectively exists, and that there is a sufficient connection between the measures and that 
circumstance, would be at odds with the  general rules of treaty interpretation that require meaning 
be given to each term and provision.4 
18. In this regard, Canada also notes that a panel may take the invoking Member's appreciation 
of the situation into consideration, but that view is not determi native.  Rather, the panel's task is to 
make an objective assessment based on available facts  where a Member has objectively 
demonstrated that an emergency in international relations was in existence at the time it took the 
measures, the Panel must then ac cord a high level of deference to the subjective determination by 
the invoking Member that it considers its measures necessary to protect its essential security 
interests.  Canada supports the "plausible link" text set out by the Panel Russia – Traffic in Transit  
between the measures invoked by the WTO Member and the security interest that is essential to the 
Member.5 
VI. CONTOURS OF THE PHRASE "EMERGENCY IN INTERNATIONAL RELATIONS"  
 
19. Canada also provided an additional observation in relation to  the contours of an "emergency 
in international relations".  T he panel in Russia – Traffic in Transit  appeared to suggest that the 
"emergency in international relations" must occur within the invoking Member or its immediate 
surroundings.6  Canada disagre es.  In Canada's view, such a territorial limitation fails to adequately 
recognize the myriad of ways in which emergencies in international relations may manifest in modern 
life.  A breakdown in the maintenance of law and public order need not necessarily take place within 
the territory of an invoking Member or its immediate surroundings in order for an "emergency in 
international relations" to occur.  Given our increasingly interconnected and complex world, events 
on distant shores can have significant imp lications for international relations.  Modern -day methods 
of waging conflict, such as cyber -attacks and misinformation campaigns seeking to undermine 
confidence in public institutions, can originate from any part of the globe. Moreover, a significant 
deterioration in respect for human and democratic rights in one country, could have negative 
repercussions for the international community more generally.  Such developments may, depending 
on the context, constitute or contribute to an emergency in internation al relations, despite occurring 
outside the territorial limits of the invoking WTO member or its immediate neighbourhood.    
20. With respect to the panel's statement in Russia – Traffic in Transit  that the interests that arise 
from the enumerated subparagraph s of Article XXI(b) are "all defence and military interests, as well 
as maintenance of law and public order interests", Canada agrees that these interests can arise from 
 
3 Panel Report, Russia – Traffic i n Transit,  paras. 7.77 and 7.83.  
4 Appellate Body Report, US – Gasoline , para. 61.  
5  Panel Report, Russia – Traffic in Transit , para. 7.138. 
6 Ibid, para. 7.135.  WT/DS597/R/Add.1  
 
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  the enumerated subparagraphs of Article XXI(b), and that subparagraphs (i) to (iii) of  Article XXI(b) 
provide guidance as to the seriousness of the subject matter covered by Article XXI(b). Canada 
cautions, however, against taking too restrictive of an interpretive approach to the subparagraphs 
of Article XXI(b) or the phrase "emergency in international relations". As expressed in Canada's 
opening statement, our world is increasingly interconnected and complex - States must retain a 
certain level of flexibility to determine, for themselves, what constitutes an emergency in 
international rela tions serious enough to warrant taking measures(s) in response. This does not 
detract from the requirement that Members demonstrate that such circumstances objectively exist 
and that there is a sufficient connection between the measures and those circumsta nces. 
VII. APPLICABILITY OF ARTICLE XXI TO THE ARO AND THE TBT AGREEMENT  
 
21. In the event that the Panel finds that the U.S. measure violates obligations under the ARO 
and the TBT Agreement, it will be necessary to determine whether Article XXI applies to cla ims under 
the ARO and the TBT Agreement.  In Canada's view, the Panel's interpretive exercise in this case 
must be aimed at determining whether there are sufficient textual or contextual linkages between 
the ARO and the TBT Agreement and Article XXI of the  GATT 1994 to determine that the specific 
essential security exception set out in Article XXI is available as a defence to a claim of a violation 
of a substantive obligation in those Agreements.  The Panel is not called upon to establish broad 
rules regard ing the applicability of Article XXI to all Annex 1A Agreements.  
22. In China – Rare Earths, the Appellate Body  found that when the Annex 1A Agreement does 
not contain express language incorporating an exception from the GATT 1994, recourse to other 
interpretative elements will be necessary to determine the specific relationship among individual 
terms and provisions of the relevant agreements and that the "specific relationship" must be 
determined on a case -by-case basis, through a thorough analysis o f all relevant provisions.7  
Customary rules of international law on the interpretation of treaties would also be relevant.8  In 
Canada's view, this analytical approach is equally relevant in respect of the applicability of a GATT 
exception to an obligat ion set out in one of the Annex 1A Agreements.  One important distinction 
from the approach taken by the Appellate Body in that case is that, for the TBT Agreement and the 
ARO, the text of other Annex 1A Agreements also provide relevant context as they con tain text that 
specifically indicates that the exceptions under the GATT 1994 apply.9  This suggests  that Article XXI 
of the GATT 1994 is not intended to apply to all Annex 1A agreements.  
23. Although the ARO is conceptually linked to Article IX as a trade d iscipline, this does not mean 
that the entire architecture of the GATT 1994 can be imported into the ARO. Similarly, while the 
TBT Agreement contains several non -discrimination obligations that share conceptual similarities 
with GATT Article I:1, it does not flow from that fact that the security exception in GATT Article XXI 
can be used to justify violations of any of the provisions of the TBT Agreement, not least because 
the TBT Agreement itself contains references to national security in its operati ve provisions.  
24. With regards to the applicability of Article XXI to the TBT Agreement, Canada notes that the 
TBT Agreement clarifies that Members retain their right to regulate in respect of their essential 
security interests for measures covered by the TBT  Agreement.  In other words, it contains a clearly 
articulated right that Members may regulate in respect of essential security interests; however, it 
does so in a different way than Article XXI.  
25. The references to essential security interests in the pream ble and the text of Articles 2.2 and 
5.4 provide crucial context regarding how the TBT Agreement provides a distinct means to protect 
Members' right to regulate in respect of their essential security interests that is consistent with and 
reflective of the objectives of the TBT Agreement.  The presence of these references to essential 
security interests, in the context of specific operational provisions, indicates that the TBT Agreement 
already incorporates rights and obligations with respect to essential se curity interests.  Any analytical 
approach that resulted in considering first, whether a measure was justified on the basis of these 
specific references to essential security, and then secondly, whether that same measure could be 
 
7 Appellate Body Report, China – Rare Earths , para. 5.57.  
8 Ibid. 
9 See Article 3 of the Agreement on Trade -Related Investment Measures , Article 1.10 of the Agreement 
on Import Licensing Procedure s and Article 24.7 of the Agreement on Trade Facilitation . WT/DS597/R/Add.1  
 
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  justified under Article XX I of the GATT would not only be redundant, it would render these references 
meaningless.  
26. Canada is of the view that a panel's analysis of essential security interests in the TBT context 
should be grounded in the specific provision in the TBT Agreement to w hich the assessment of 
essential security was applied, not in the text and architecture of Article XXI.  As the EU notes, the 
TBT Agreement text also does not contain the words "which it considers necessary". Canada 
considers that the absence of such langu age likely signifies that, to the extent that there is a 
subjective element in Article XXI(b), this element does not exist in the TBT Agreement.   
VIII.  ARTICLE XXI AND NVNI  
 
27. Canada considers that it is abundantly clear in the text of the NVNI provisions10 that otherwise 
inconsistent measures that have been justified under an exception, including an essential security 
exception, can be subject to an NVNI claim. The phrase "whether or not it conflicts with the 
provisions of this Agreement" in the NVNI provis ions expressly indicates that such measures are 
captured. The negotiating history further confirms this interpretation.11 
28. Canada considers that the GATT/ITO negotiating history suggests that NVNI is available  for 
otherwise inconsistent measures found to be  justified under Article XXI, rather than being the only 
means of recourse for Members affected by essential security measures.  There must first be an 
assessment by a panel as to whether the measures are justified under Article XXI.  As Canada and 
other M embers have argued throughout, and previous panel decisions have confirmed, Article XXI 
is not self -judging and is subject to review by a panel.   
 
10 Articles XXIII:1 of the GATT 1994, and XXIII:3 of GATS.  
11 As the Un ited States delegate noted in 1947 during the negotiations of the NVNI article, "there is no 
exception from the application" of the provision and that it was perfectly clear from the text that NVNI covers 
everything in the agreement. See: E/PC/T/A/PV/30, p p. 26-29. WT/DS597/R/Add.1  
 
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  ANNEX C -3 
INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF CHINA  
1. China underscore s that, H ong Kong,  China is an inalienable part of the People's Republic of 
China and is also an original Member of the WTO by virtue of Article  XI of the Marrakesh Agreement 
Establishing the World Trade Organization  ("WTO Agreement"). Under the Basic Law of the 
Hong Kong Special Administrative Region of the People's Republic of China  (which was put into effect 
as of 1 July 1997, hereinafter the "Basic Law ") and completely in line with China 's "one country, two 
systems" policy, Hong  Kong,  China is a separate custo ms territory.  The Law of the People's Republic 
of China on Safeguarding National Security in the Hong Kong Special Administrative Region  (which 
came into effect on 30 June 2020) and relevant measures taken to safeguard the security and 
stability of the Ho ng Kong Special Administrative Region are fully in line with the Basic Law  and "one 
country, two systems" policy, and have not changed the status of Hong Kong, China as a separate 
customs territory, nor do they affect its qualifications and status as a WTO  Member.  These measures 
have nothing to do with the so -called "national security " of other WTO Members.  
I. THE MEASURES AT ISSUE ARE INCONSISTENT WITH RELEVANT PROVISIONS IN THE ARO,  TBT  
AGREEMENT  AND GATT 1994   
2. The measures at issue in this dispute invol ve a determination by the United States that goods 
manufactured or processed within the customs territory of Hong  Kong,  China originate within the 
People's Republic of China, and require these goods to be marked to indicate this origin. In China 's 
view, ba sed on the evidence and facts provided by Hong Kong, China in the present dispute, the 
measures at issue unlawfully discriminate against goods of Hong  Kong,  China origin and thus violate 
the relevant rules and disciplines provided in the ARO, TBT Agreement  and GATT 1994.  
3. As the rules of the ARO make clear, the country of origin determination must be made 
exclusively on the basis of where a good was manufactured or processed.  WTO Members have an 
interest in ensuring that the origin of their goods is correctly and uniformly  determined in accordance 
with the rules established for this purpose.  A WTO Member is not free to determine that another 
Member is not a "country " in the sense of the ARO and require the origin mark of that another 
Member to be changed, otherwise will ac tually deprive that another Member of its rights under the 
ARO and reduce the ARO provisions to inutility.   
4. The United States' determination that imported goods manufactured or processed in 
Hong Kong,  China have an origin of China appears to be inconsiste nt with Article  2(c) and 
Article  2(d) of the ARO.  It is inconsistent with Article  2(c) because it unlawfully conditions the 
conferral of a particular country of origin upon the discriminatory and arbitrary condition – whether 
Hong Kong,  China is so -called "sufficiently autonomous" from the People's Republic of China – 
unrelated to manufacturing or processing of the goods.  It is inconsistent with Article  2(d) because 
the United States does not apply the same rules of origin to goods imported from the customs 
territory of Hong  Kong,  China that the United States applies to goods imported from other WTO 
Members.  
5. As to the TBT issue, China views that the United States ' origin marking requirement is a 
technical regulation which appli es to goods imported from Hong  Kong,  China.  The additional 
condition as mentioned above when the United States  applies the country of origin rules results in 
the inability of Hong  Kong, China enterprises to correctly mark their goods as prior to the impos ition 
of the revised origin marking requirement, which detrimentally modifies the conditions of 
competition in the United States ' market for these goods vis -à-vis the treatment accorded to like 
products originating in other Members.  This technical regulat ion appears to be inconsistent with 
Article  2.1 of the TBT Agreement.  
6. In addition, taking into account the above potential inconsistencies with the provisions set 
forth in the ARO and the TBT Agreement , the United States ' origin marking requirement as appl ied 
to goods imported from Hong  Kong,  China appears to further violate Article  IX:1 and Article  I:1 of 
the GATT 1994 for the same essential reasons.  WT/DS597/R/Add.1  
 
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  7. China notes the United States does not dispute at all that, its measures at issue violate the 
provisions of  the ARO, the TBT Agreement  and GATT 1994 identified by Hong Kong, China in its 
request for establishment of a panel and in its first written submission, which  should be taken into 
account by the panel when assessing  whether the United States ' origin mar king requirement is in 
violation of relevant provisions under the ARO, the TBT Agreement  and GATT 1994 as mentioned 
above.  
II. INTERPRETATION AND APPLICATION OF ARTICLE XXI (B) OF THE GATT 1994  
8. Rather than contesting the merits of Hong Kong, China's substan tive claims, the United States 
devoted the entirety of its first written submission to asserting an affirmative defence under 
Article  XXI(b) of the GATT  1994.  
9. The United States' proposed interpretation of Article  XXI(b) is completely unfounded under 
accept ed principles of treaty interpretation.  Correctly interpreted, Article  XXI(b)  are not "self -
judging" in entirety by the invoking Member.  The applicability of the sub-paragraphs  of 
Article  XXI(b) to the GATT -inconsistent action for which justification is sought is an objective matter 
to be determined by the panel.  
10. Furthermore, an interpretation of Article  XXI(b) that would render this provision entirely self -
judging, including its sub-paragraphs , would gravely undermine the "security and predictability" of 
the multilateral trading system, contrary to the object and purpose of the WTO Agreement.  Such 
an interpretation would effectively emasculate the positive obligations that Members have 
underta ken in furtherance of a secure, predictable, and rules -based trading system.  That risk is 
evident not only in the measures at issue in the present dispute, but also in other measures that the 
United States has threatened to impose upon its trading partner s under the guise of "national 
security".  Such an entirely self -judging interpretation will open an extremely dangerous door and 
should be alerted by all WTO Members.  
11. As the party invoking an affirmative defence, the United States bears the burden of 
demonstrating the applicability of Article  XXI(b) to the measures at issue.  In this respect, the United 
States ' first written submission is wholly deficient.  The United States has never identified which of 
the three subparagraphs of Article  XXI(b) it considers applicable to the measures at issue, let alone 
presented evidence and legal argument sufficient to establish the prima facie  applicability of any one 
of those subparagraphs.  Such a defence is defective on its face.  In addition, the a ssertions or views 
put forwarded by third parties cannot remedy this fundamental flaw of the United States that it has 
failed completely to fulfill its burden to establish the prima facie  case for its affirmative defence.WT/DS597/R/Add.1  
 
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  ANNEX C -4 
INTEGRATED EXECUTIVE SUM MARY OF THE ARGUMENTS OF THE EUROPEAN UNION  
I. ORDER OF ANALYSIS  
 
1. The correct order of analysis in the present case is to firstly assess whether a prima facie 
case of inconsistency exists, and - should the Panel find that such inconsistency exists – then t urn 
towards the application of Article XXI of the GATT 1994.  
II. APPLICABILITY OF THE ARO  
 
2. The Panel has an obligation to verify that Hong Kong made a valid prima facie case with 
respect to all of the claims it makes. In the absence of that, it is improper  for a panel to uphold a 
claim by making violation findings, even where a responding party does not comment on the (validity 
of the) claims in question.  
3. Furthermore, pursuant to Article 11 DSU, the Panel is required to carry out an independent 
and objecti ve assessment of the applicability of the provisions of the covered agreements invoked 
by a complainant as the basis for its claims, regardless of whether such applicability has been 
disputed by the parties to the dispute.  
4. In its first written submission, Hong Kong claims that the measures at issue are inconsistent 
with Article 2(c) and Article 2(d) of the ARO. It asserts that the ARO applies to origin marking 
requirements by virtue of Article 1 ARO.  
5. Hong Kong 's interpretation of Article 1 is that origin marking requirements are the same 
as rules of origin. This reading is not supported by the text, which clearly draws a distinction between 
"rules of origin, which are defined in Article 1.1 ARO and "origin marki ng requirements ". 
6. In accordance with Article 1.2 ARO it is not the origin marking requirements, but the rules 
of origin used in the application thereof  that fall within the scope of the ARO.  
7. Origin is determined based on the conditions or "origin criteria " contained in the rules of 
origin, following which the origin marking must reflect origin in accordance with said determination.  
8. Rules of origin must be distinguished from origin marking and origin marking requirements. 
For example, the requirement that "all articles of foreign origin, must be marked permanently, legibly 
and in a conspicuous place, so as to inform an ultimate purchaser of the English name of the article 's 
country of origin " is a marking requirement. This requirement imposes the obligation to mark the 
origin, but it cannot be applied in practice without corresponding rules of origin, which set out how 
origin is determined for imported goods. These two sets of rules are interdepe ndent, but distinct.  
9. In sum, if the problem is conceptually reduced to its three constituent elements – "that 
originates there ", anything that develops the concept of "originates " is an origin rule controlled by 
the Agreement on Rules of Origin; and anythi ng that applies such origin rule(s) to a particular 
product or products is an application of such origin rule(s), that is, a determination of origin. 
However, anything that delimits what "there " is, does not in principle fall within the scope of the 
Agreem ent on Rules of Origin.  
10. Furthermore, a reason  given for a particular delimitation of "there " is not, without more, 
sufficient to bring that matter within the scope of the Agreement on Rules of Origin. The second 
sentence of Article 2(c) contains a specifi c and limited obligation: "they" (that is, rules of origin) 
must not require the fulfilment of a certain condition  not related to manufacturing or processing as 
a prerequisite for the origin determination (a condition is an "if – then" structure that may e ither be 
met or not met in particular instances). A reason for the enactment of a piece of legislation is not to 
be conflated with a condition as part of a legal provision and the legal test governing its application. 
If the measure at issue would contain a rule stating, for example, that if the product is dumped it is 
to be considered as originating in China, whereas if not dumped it is to be considered as originating WT/DS597/R/Add.1  
 
- 74 - 
 
  in Hong  Kong, China, that would be a condition and a violation of the second sentence of Article  2(c); 
but a reason is not a condition. This conclusion does not change merely because the measure delimits 
"there " for one specific purpose (origin marking) but not others – that alone does not bring the 
measure within the scope of the Agreement on  Rules of Origin where otherwise it would not control. 
That situation might or might not be relevant for the Panel 's assessment under Article XXI GATT, 
but that is a different question.  
III. APPLICABILITY OF ARTICLE XXI(B) GATT 1994 TO THE CLAIMS UNDER THE  TBT 
AGREEMENT AND CLAIMS UNDER THE TBT AGREEMENT  
 
11. Article XXI of the GATT 1994 is not applicable to claims under the other multilateral 
agreements mentioned in Annex 1 to the WTO Agreement, such as the TBT Agreement (and the 
ARO).  
12. Each time another Annex 1A agreement incorporates the general and security exceptions 
it does so by express reference, under a "bridge " provision  (e.g. Article 3 of TRIMs Agreement 
expressly provides that "[a]ll exceptions under GATT 1994 shall apply").  
13. It cannot be inferred from simple silence that the application of an exception is permitted 
or prohibited. However, silence in certain agreements is relevant in conjunction with the express 
reference in others. If certain agreements contain an express refe rence, a contrario  it can be inferred 
that silence means the lack of availability of the security exceptions absent a "bridge " provision.  
14. Several Annex 1A agreements have their own balancing between trade interests and other 
values, e.g. Article 2.2 of the  TBT Agreement.  
15. The EU notes the following with regard to the interpretation of the TBT Agreement in the 
light of also this recital:  
16. First, the difference between an operative article of an agreement and a recital as part of 
the preamble of an agreement m ust be recognised. A recital can enlighten as to the object and 
purpose of an agreement, but it is not as such part of the disciplines (or rights and obligations) 
stipulated in that agreement.  
17. Second , while the 7th Recital makes references to the "essentia l security interests " and 
therefore contains language which is similar to and recalls Article XXI of the GATT 1994, there are 
also important differences between the text of Article XXI and of the 7th Recital. In particular, the 
7th Recital does not contain  the specific wording contained in subparagraphs (i) to (iii) of 
Article  XXI(b), which are constituent elements and necessary conditions for a successful invocation 
of Article XXI. Furthermore, the 7th Recital does not contain the words "which it considers  
necessary ", which are present in Article XXI(b).  
18. Third, the EU considers, based on the foregoing, that the 7th Recital can be useful in 
interpreting Article 2.1 of the TBT Agreement. The EU submits that the interpretation of Article 2.1 
in the Appellate -Body's case -law concerning the implications of the 6th Recital of the preamble to 
the TBT Agreement are transposable to the 7th Recital.  
19. The EU submits that the 7th Recital can shed light on what can be considered a legitimate 
policy objective and a legit imate regulatory distinction, when applying Article 2.1 of the 
TBT Agreement. The European Union considers that its considerations above on the application of 
Article XXI of the GATT 1994 can therefore be transposed to the proper interpretation of Article 2.1 
of the TBT Agreement in light of the 7th Recital of the preamble to that agreement and to the 
application of Article 2.1 of the TBT Agreement in this case.  
20. The EU notes in this respect that the identification of such legitimate policy objective is just  
one step in the analysis required under Article 2.1 of the TBT Agreement. The 7th Recital does not 
provide for a "self-judging " exception to the disciplines of the TBT Agreement. Indeed, the disciplines 
of Article 2.1 remain as such unchanged and are prop erly within the jurisdiction of a panel before 
which a claim of inconsistency with those disciplines is brought. In any event, as the EU has explained 
beforehand, Article XXI of the GATT 1994 itself is not a self -judging exception.  WT/DS597/R/Add.1  
 
- 75 - 
 
  21. In conclusion , the EU co nsiders that the correct interpretation of Article 2.1 of the 
TBT Agreement needs to properly consider the 7th Recital to the Agreement as providing context 
and information on the object and purpose of the TBT Agreement.  
IV. INTERPRETATION OF ARTICLE XXI OF THE GATT 1994  
 
22. The US ' view that that Article XXI is "self-judging " has been convincingly rejected by the Panel 
Report in Russia — Traffic in Transit . It is wrong in light of the text, context, object and purpose, 
and indeed useful effect of the GATT 19 94.  
23. The EU notes that the correct interpretation and application of Article XXI of the GATT 1994 
have been discussed at some length before in other dispute settlement cases under the DSU, and 
notably in a series of cases concerning measures adopted by the  United States on steel and 
aluminium products (DS544, DS547, DS548, DS552, DS554, DS556 and DS564). The EU is on 
record in these cases on the interpretation of Article XXI of the GATT  1994 and its applicability 
outside of the GATT 1994 and considers its i nterpretation of Article XXI of the GATT 1994 to be 
consistent with the interpretation and application of the general exceptions contained in Article XX 
of the GATT 1994.  
24. The US position is not supported by any of the materials referred to in Articles 31 and 32 of 
the VCLT, including supplementary means of interpretation.  
25. In addition, while certain GATT Contracting Parties have expressed the view that Article XXI(b) 
is "self -judging", several others have repeatedly expressed diametrically oppos ed positions. Thus, 
the enquiry into the GATT 1947 palaeontology does not support the US position.  
26. The EU recalls, first, that Article XXI of the GATT 1994 is an affirmative defence. But it does 
not provide for an exception to the rules on jurisdiction lai d down in the DSU or to the special rules 
on consultations and dispute settlement contained in Articles XXII and XXIII of GATT 1994. The DSU 
creates compulsory jurisdiction, and it contains no security exception.  
27. Second , interpreting Article XXI as a "non -justiciable" provision in this dispute would be 
inconsistent with the terms of reference of the Panel, which follow Article 7.1 of the DSU. It would 
also be inconsistent with Article 7.2 of the DSU, which specifies that  "[p]anels shall address the 
relevant provisions in any covered agreement or agreements cited by the parties to the dispute ". 
28. Thus, the present dispute differs from the case under the GATT 1947 opposing the US and 
Nicaragua, where the terms of reference ex plicitly precluded that panel from examining or judging 
the validity or motivation for the invocation of Article XXI(b) by the US.  
29. Third,  interpreting Article XXI as a "non -justiciable" provision would make it impossible for the 
Panel to "make an objective  assessment of the matter before it ", as required by Article 11 of the 
DSU, as the "matter" before the Panel must also include any defence under Article XXI raised by the 
US. 
30. Fourth, interpreting Article XXI as a "non -justiciable" provision would undermine  one of the 
fundamental objectives of the DSU, as expressed in Article 3.2 of the DSU: security and 
predictability.  
31. Fifth, Article 23 of the DSU prohibits Members from making a determination to the effect that 
a violation has occurred, except through recou rse to dispute settlement in accordance with the DSU. 
If Article XXI was "non-justiciable ", a WTO Member, rather than the WTO adjudicating bodies, would 
be deciding unilaterally the outcome of a dispute.  
32. Finally, by way of illustration, the EU would like t o point out that  there are fundamental 
differences in the way that security exceptions are drafted in the GATT, on the one hand, and in 
other international agreements, on the other hand. For instance, an express text that comes very 
close to the idea of "n on-justiciability" can be found in the KORUS FTA. There is no such text agreed 
by the WTO Membership in any of the covered agreements.  WT/DS597/R/Add.1  
 
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  33. Thus, the invocation of Article XXI by a defending party does not have the effect of excluding 
the jurisdiction of a pane l. 
34. The EU fails to understand  how Article XXI(a) can exempt the US from meeting its burden of 
proof under Article XXI(b). Like Article XXI(b), Article XXI(a) is also a justiciable provision. Any 
discretion accorded under it is not unlimited.  
35. The EU acknow ledges that information relating to essential security interests is of a highly 
sensitive nature, but the respondent is expected at a minimum to explain in sufficient detail why 
such information cannot  be shared with the Panel. There is nothing that would prevent a panel, if 
necessary, from adopting appropriate procedures to deal with sensitive information in cases 
involving the invocation of Article XXI. At any rate, even if the US was justified in not providing 
certain information pursuant to Article XXI( a), that would not discharge the US from its burden of 
proof in relation to Article XXI(b).  
36. Regarding the interpretation of Article XXI, in the EU 's view, the phrase "which it considers " 
refers only to the necessity test and not to any other provisions. Fu rthermore, t he subparagraphs to 
Article XXI(b) are exhaustive of the types of circumstances covered by the provision, and cannot be 
considered cumulative in nature. A ll those distinct circumstances are objective, and susceptible to a 
panel 's assessment. Mo reover, the terms "other emergency in international relations"  do not extend 
to an "emergency" in commercial or trade relations . 
37. Concerning the negotiating history raised by the US, even under the Havana Charter, the 
correct position would have been that t he predecessor to Article XXI is "justiciable ", and not self -
judging. Even under the Havana Charter, all issues arising out of the Charter were intended to be 
subject to the dispute settlement procedures provided therein, whether involving the ITO itself 
(Articles 93 -95 of the Havana Charter), or the ICJ (Article 96 of the Havana Charter). The evolution 
towards the WTO covered agreements, and notably the provisions of the DSU, further confirms that 
position.  
38. Furthermore, the 1949 GATT Council decision cited by the US cannot be considered as a 
subsequent agreement on the interpretation even of the GATT 1947, or in any way binding to all the 
contracting parties to the GATT 1947. Still less could it be considered as binding under the 
GATT  1994. In  any event, it also supports the complainants ' position rather than that of the US.  
 WT/DS597/R/Add.1  
 
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  ANNEX C -5 
INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF JAPAN* 
Introduction  
1. As a third party, Japan chooses to submit its  responses to the Panel's Written Questions 1 to 
6 concerning the ARO and Questions 9 and 10 concerning the TBT Agreement .  
2. As an initial  matter, Japan wishes to note its view that, even if the respondent chooses not to 
rebut explicitly the interpretation and application of a WTO provision underlying the claim raised by 
the other party, a panel should independently "make an objective assessment" in accordance with 
Article 11 of the DSU, before it determines the consistency of the measure at issue with such a WTO 
provision.   
3. Japan  understands that these questions by the Panel are posed on the premise that WTO 
panels have the authority and responsibility to interpret and apply a provision at issue of the WTO 
Agreement, so that "[r]ecommendations and rulings o f the DSB" do not "add to or diminish the 
rights and obligations provided in the covered agreements" (Article 3.2 of the DSU).  In this regard, 
the Appellate Body has found that " a panel is not only entitled, but indeed required, under Article 
11 of the DS U to carry out an independent and objective assessment of the applicability of the 
provisions of the covered agreements invoked by a complainant as the basis for its claims, regardless 
of whether such applicability has been disputed by the parties to the d ispute ".1  The Appellate Body 
also stated that:  
With respect to the "applicability of … the relevant covered agreements", a panel is 
required to conduct an objective assessment of whether the obligations in the 
covered agreements, with which an inconsistency is claimed, are relevant and 
applicable to the case at hand. The touchstone of this obligation is that a panel's 
assessment must be "objective".2 
4. On this understanding and its agreement with that position, Japan provides some observations 
on some of the Panel's questions to facilitate the Panel's examination.   
Questions 1 -6 
1. To all third parties : Article 1.2 of the ARO indicates that rules of origin are "used … in the 
application of … origin marking requirements under Article IX of [the] GATT  1994"? Please 
explain how rules of origin are used in such application of origin marking requirements.  
2. To all third parties : What constitutes a "determination" of origin within the meaning of 
Article  1.1 of the ARO ("applied … to determine the country of origin of goods  …")? 
3. To all third parties : In paragraph 296 of its first written submission, the United States argues 
that " Hong Kong, China, appears to seek a finding that the Agreement on Rules of Origin  not 
only disciplines how Members determine the cou ntry of origin, but also obligates Members to 
recognize particular claims of sovereignty or territory. Hong Kong, China, would require an 
importing Member agree with an exporting Member’s claims as to territorial boundaries, for 
purposes of its origin mark ing requirements. Put simply, this is not a determination that WTO 
Members agreed to assign to dispute settlement panels." Similarly, i n paragraph 6 of its third -
party statement, Canada states that the determination of what constitutes a country "is not a 
'rule of origin' per se , and therefore not governed by the ARO.  The ARO governs rules that 
 
* Japan requested that its responses to questions from the Panel serves as its executive summary.  
1 Appellate Body Report, Indonesia – Iron or Steel Products , para. 5. 33.  
2 Appellate Body Report, Colombia – Textiles , para. 5.17.  WT/DS597/R/Add.1  
 
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  determine whether a product originates in a particular country, not the identification of that 
particular country."3   
a. Is the determination of "what constitutes a 'country' for country of origin marking 
purposes" a question of interpretation of the term "country" in Articles 1 and 2 of the 
ARO? In this context, what is the relevance of the Explanatory Notes to the WTO 
Agreement, discussed by Hong Kong, China in para graphs 26 et al. of its first written 
submission and by Canada in paragraphs 7 to 8 of its third -party submission?  
b. For purposes of clarifying the meaning of "country of origin" in Article 1.1 of the ARO, 
is it the Panel's task to clarify the meaning of "co untry" pursuant to Article 3.2 of the 
DSU? If not, why not?  
c. Do the disciplines set out in Articles 1 and 2 of the ARO limit the manner in which 
Members must recognize the territorial boundaries of other Members when conferring 
origin to products manufactur ed or processed in any given country?  
d. If, as submitted by Canada, the determination of "what constitutes a 'country' for 
country of origin marking purposes" is not governed by the disciplines of the ARO, is it 
governed by any other disciplines under the co vered agreements? In this context, 
please comment, in particular, on disciplines governing origin marking and those 
covering equal treatment among Members (e.g. Article 2.1 of the TBT Agreement and 
Article IX:1 of the GATT 1994)?  
4. To all third parties:  With reference to paragraph 30 of Hong Kong, China's first written 
submission, under what circumstances would a country -of-origin determination be wrong or  
incorrect pursuant to the ARO?  
5. To all third parties : Canada argues that the [ARO] provisions at issue in  this dispute "do not 
discipline or dictate what the actual  country of origin of a good must be".4 Please comment.  
6. To all third parties : Does the requirement to indicate a particular country as a country of 
origin for the purpose of an origin mark necessarily involve a prior determination that that 
country is the country of origin as stated by Hong Kong, China in paragraphs 24 and 30 of its 
first written submission, or can that indication be made independently of such a 
determination? If so, on what  basis?  
Japan's Response  
5. Japan  is of the view that "rules of origin" subject to the ARO are distinct from "(origin) marking 
requirements" under Article IX of the GATT 1994.  Pursuant to Article 1.1 of the ARO, rules of origin 
are "laws, regulations and administrative determinations of general application" applied to 
"determine  the country of origin of goods" (emphasis added).  Rules of origin are concerned with 
processes that goods undergo and whether such processes are sufficient for a good to be considered 
as being from one country or  another.  For example, rules of origin may refer to a change of tariff 
classification or may refer to a particular manufacturing process.  
6. Origin  marking requirements under Article IX of the GATT 1994 do not entail any 
"determination" as to the country of origin of goods.  They are simply a "device, stamp, brand, label, 
inscription"5 that identifies the origin of the good.  Thus, a requirement that products manufactured 
in any country be marked with the label "made in [relevant country]" is an origin marki ng 
requirement subject to Article IX, but does not constitute a "rule of origin" subject to the ARO.   
 
3 See also Canada's third -party submission, para. 6; and third -party statement, paras. 4 to 7.  
4 Canada's third -party submission, para. 6.  
5 See https://www.oed.c om/view/Entry/114169?isAdvanced=false&result=1&rskey=xHoqiz&  (last 
visited 14 October 2021). See Exhibit JPN -1. WT/DS597/R/Add.1  
 
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  Questions 9 and 10  
9. To all third parties : With regard to Article 2.1 of the TBT Agreement, does a finding of 
detrimental impact, in this case, depend o n whether requiring the name "China" on the origin mark 
for goods produced in Hong Kong, China is contrary to WTO rules? In your response, please comment 
on Canada's submission in paragraph 12 of its third -party statement that there may not be 
differential  treatment here.  
10. To all third parties : If essential security interests were taken into account in the assessment 
of a claim under Article 2.1 of the TBT Agreement:  
a. what burden  of proof would each party carry in respect of such an examination? In your 
response, please comment on Canada's argument in paragraph 14 of its third -party 
statement that Hong Kong, China has not met its burden of proof.  
b. what would be the relevance of th e sixth and seventh recitals of the preamble of the 
TBT Agreement for determining the contours of such an examination;  
c. how would  such an examination compare to an examination of the same interests in Article 
XXI(b) of the GATT 1994? In this regard, please consider the European Union's 
submission that there are textual differences between the 7th recital of the preamble of 
the TBT Agreement and Article XXI(b). Specifically, there are no sub -paragraphs 
describing specific situations in the 7th recital, and th e terms "which it considers" are 
missing from that recital6; 
d. how would such an examination compare to the necessity test carried out in respect of 
"national security  requirements" in Article 2.2 of the TBT Agreement. In this context, 
what is the relevance , if any, of this term, as used in Article 2.2, to the assessment of 
a claim under Article 2.1?  
Japan's Response  
7. Article  2.1 of the TBT Agreement requires Members to accord treatment "no less favourable" 
to imports than that accorded to like products of na tional origin and to like products originating in 
any other country. As is clear from previous Appellate Body interpretations of Article 2.1 of the 
TBT Agreement, an assessment of whether a technical regulation accords "no less favourable" 
treatment entail s a two -step examination:  (1) whether the technical regulation modifies the 
conditions of competition to the detriment of imported products; and (2) if so, whether the 
detrimental impact from the measure stems exclusively from a legitimate regulatory dist inction.7  If 
the detrimental impact stems exclusively from a legitimate regulatory distinction, it will not be found 
inconsistent with Article 2.1.   
8. Further , Japan draws the Panel’s attention to the seventh recital of the preamble of t he 
TBT Agreement, which states "no country should be prevented from taking measures necessary for 
the protection of its essential security interest", which should be taken into account as part of the 
context of Article 2.18 in interpretation and applicati on of the provision with respect to such "a 
legitimate regulatory distinction".
 
6 European Union's third -party submission, para. 51.  
7 Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico) , para. 7.233 (referr ing to 
Appellate Body Reports, US – COOL , paras. 268 and 271).  
8 Appellate Body Reports,  US — Clove Cigarettes , para. 89; US – Tuna II (Mexico) (Article 21.5 – 
Mexico) , para. 7.88. See also Appellate Body Report, US – Shrimp , para. 155.  WT/DS597/R/Add.1  
 
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  ANNEX C -6 
INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF NORWAY  
I. INAPPLICABILITY OF ARTICLE XXI TO THE AGREEMENT ON RULES OF ORIGIN AND 
THE TBT AGREEMENT  
 
1. One must recall that Article XXI of the GATT 1994 offers a potential justification for violations 
of the GATT 1994 alone, as made clear by the opening words of the provision, "Nothing in this 
Agreement shall…".1 On its face, it does not justify a violatio n of an agreement other than the one 
referenced by the demonstrative "this", i.e., the GATT 1994.  
2. When  Members intended a GATT 1994 exception to apply to another covered agreement, they 
included express language to that effect, as they did in the Import Li censing Agreement, the 
TRIMS  Agreement, and the Trade Facilitation Agreement.2  However, no such language renders 
Article XXI of the GATT 1994 available as a justification for a violation of neither the Agreement on 
Rules of Origin nor the TBT Agreement.  
3. The United States asserts that, as the Marrakesh Agreement is an umbrella, Article XXI of the 
GATT 1994 applies to all the multilateral agreements on trade in goods listed in Annex 1.3 If the US 
view were permitted, the words "this Agreement " in Article X XI would serve no purpose, and the 
explicit incorporation of the GATT 1994 exceptions in certain other goods agreements would be 
redundant.  
II. INTERPRETATION OF ARTICLE XXI  
 
4. The United States asserts that, properly interpreted, Article XXI is self -judging .4 Norway 
disagrees.  While Norway accepts that Article XXI confers discretion on Members to protect their 
essential security interests, this discretion is not unlimited. In particular, properly interpreted, (i) 
the three sub -paragraphs set out objectively v erifiable circumstances which a respondent must 
demonstrate; and (ii) the words "it considers " accord the respondent some, but not unlimited, 
discretion with respect to the choice of the "action " to which the chapeau refers. A Member invoking 
Article XXI(b ) carries the burden to prove the elements of the defence in both the chapeau and, at 
least, one subparagraph. The only two panels to have adjudicated the security exception share 
Norway 's view.  
a. Analysis under sub -paragraph (iii)  
 
5. The three sub -paragrap hs under Article XXI(b) set out "objective fact[s] " that are "amenable 
to objective determination ".5  In other words, the respondent must demonstrate with evidence, and 
the Panel must assess, the existence of the facts referenced in the sub -paragraphs in an objective 
manner.  Specifically, under sub -paragraph (iii), the existence of a "war or other emergency in 
international relations " needs to be demonstrated objectively.  
6. The United States argues that the subparagraphs are modified by the phrase "which it  
considers " in the chapeau  and, as a result, the respondent is free to decide for itself if the 
subparagraphs are met.6 The United States errs.   
7. The verb "consider " qualifies the terms of the chapeau ; it does not qualify any words in the 
three sub -paragraphs.  This flows from an interpretation of the words of Article XXI(b), in line with 
 
1 Emphasis added.  
2 Import Licensing Agreement, Article 1.10; TRIMS Agreement, Article 3; Trade Facilitation Agreement, 
Article  24.7. 
3 The United States ' first written submission, para. 269.  
4 The United States ' first written submission, Section A.  
5 Panel Report, Saudi Arabia – IPRs, para. 7.244; Panel Report, Russia – Traffic in Transit , para. 7.712.  
6 The United States ' first written submission, para. 48.  WT/DS597/R/Add.1  
 
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  the rules of English grammar, and in a manner that ensures consistency among the various language 
versions.  
8. Properl y interpreted, each of the three subparagraphs qualifies the word "action ", and not the 
words "essential security interests ".  This follows from the text, context, object and purpose, and 
negotiating history of Article XXI(b). In particular, the US view is  irreconcilable with the Spanish 
version of the text, in which the term "relativas " (relating) can only qualify the word "medidas " 
("action "); and, the chapeau / subparagraphs are broken by a comma.  
9. The United States acknowledges this interpretation of th e Spanish version of Article XXI.7 
However, rather than to interpret the three equally authentic language versions of the GATT 1994 
in a coherent and consistent manner, the United States opts to reject the Spanish version and 
construes its interpretation of the English and French versions in a way that serves their purpose.  
10. The Vienna Convention on the Law of Treaties requires that treaty terms be given their 
"ordinary meaning ".  There is nothing "ordinary " about a meaning premised on US arguments that 
entail inconsistency and incoherence, which even the United States calls "less in line with rules of 
grammar and conventions ".8  Instead of this strained interpretation, the ordinary meaning dictates 
that each of the subparagraphs modifies the same noun – "action " – which ensures interpretive 
consistency and coherence. The subparagraphs are not qualified by other words in the chap eau. 
When accounting for all the words in the text, the Spanish version confirms the English and French 
versions: the subparagraphs modify the noun "action ". 
11. The chapeau  / subparagraph relationship has important implications for the Panel 's approach 
under Article XXI(b).  Specifically, as a consequence of the relationship, a Member 's "action " under 
Article XXI(b) is subject to two sets of distinct and independent conditions :  
(1) the "action " must "relate to " the specific circumstances set forth in subparag raph (i) 
or (ii), or be "taken in time of war or other emergency in international relations ", 
under subparagraph (iii); and,  
(2) it must be "action " that the Member "considers necessary " for the protection of its 
essential security interests.  
12. As a first st ep, therefore, a panel must make an objective assessment of whether the Member 
has demonstrated that the "action " meets the circumstances / situation in at least one of the 
subparagraphs.  Textually, the phrase "which it considers " is not part of this step.  Therefore, a 
Member 's demonstration that it fulfils the conditions in the subparagraphs is not subject to a more 
forgiving standard of review flowing from the verb "consider " in the chapeau.   
13. As pointed out by Switzerland in it s written third party submission, even the United States 
acknowledges that subparagraph (iii) relates to the term "action " in the chapeau.9 Consequently, it 
is undisputed that the assessment of whether the Member 's action is taken in time of war or other 
emergency in international relations cannot be modified by the phrase "which it considers ". Thus, 
there is no basis for arguing that the sub -paragraph is self -judging.  
14. In sum, what matters under sub -paragraph (iii) is whether an emergency has, objectively,  
been shown to exist, on the facts.  This is a matter for objective determination by the Panel, and 
not a question of what the United States "considers ". 
b. Analysis under the chapeau  
 
15. If the Panel finds that the requirements of sub -paragraph (iii) are met , the respondent must 
demonstrate, under the chapeau , that it "considers " the "action " "necessary for the protection of its 
essential security interests ".  
 
7 The United States ' first written submission, para. 1 65. 
8 The United States ' first written submission, para. 163.  
9 Switzerland 's third party submission, para. 12, referring to the United States ' first written submission, 
para. 45. WT/DS597/R/Add.1  
 
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  16. Although the words "which it considers ", in the chapeau , establish a degree of deference, the 
standard of review is not total deference . A panel must still exercise scrutiny over the respondent 's 
assertion that its measures are justified under Article XXI(b), including by respecting the legal 
conditions in the  chapeau . Like with other provisions of the covered agreements, the acceptable 
standard of review lies somewhere between the two poles of "total deference " and "de novo " review, 
both of which are excluded.10  
17. A standard  of "total deference " would fail to g ive effect to the individual terms in the chapeau .  
The chosen treaty terms – including the word "considers " itself as well as the other words in the 
chapeau  – entail, by their ordinary meaning, constraints on a respondent 's exercise of discretion 
under Ar ticle XXI(b).  
18. Total deference would also fail to give effect to the requirement under Article 11 of the DSU 
for a panel to make an "objective assessment ". A panel fails to act with objectivity if it accepts 
mechanically and blindly a respondent 's unsubstan tiated assertions, without assessing whether it 
has complied with the conditions in Article XXI(b).  
19. The wording of the chapeau of Article XXI(b) means that a panel reviews the Member 's own 
alleged action of "consider[ing] " the different factors specified in the chapeau .  Because the provision 
focuses on the respondent 's own consideration  regarding the need for the measure, a respondent 
must, at a minimum, be able to offer a plausible basis in support of that consideration. If a 
respondent cannot substantiate, with argument and evidence, such a basis to support its 
consideration that the measure is necessary, a panel has an objective basis to conclude that the 
respondent has not satisfied the terms of the chapeau . 
20. In establis hing a plausible basis for its conclusion, under the terms of the chapeau , a 
respondent must:  
First, articulate "its essential security interests ", so as to allow a panel to assess whether 
the asserted "interests " rise to the level of "essential " "securit y" interests;11 
Second , set out, with argument and evidence, a plausible basis on "which it considers " there 
to be a "clear and objective " relationship between the "action " and the protection of the 
articulated essential security interest, such that the me asure is apt to make a "material 
contribution " to the objective at stake.12  
21. By arguing that a  panel must afford an invoking Member total deference without providing 
any explanation or evidence to support its argument, the United States deprives the terms of the 
chapeau of their meaning.  The chapeau  comprises a series of words and phrases, each of  which 
must be given their own meaning, with each constraining a respondent 's action.  These are: "action ", 
"which it considers ", "necessary ", "for the protection of " and "essential security interests ". The 
interpreter cannot interpret two of these words ( "it considers ") in a way that deprives the others of 
their meaning.  
22. In undertaking  its review, a panel does not make a judgment on what the panel itself 
"considers " is "necessary " in the circumstances. Nor does the panel agree or disagree with the 
responde nt's own conclusion. Thus, a panel does not conclude, for itself, that a measure is, or is 
not, necessary for the protection of the respondent 's essential security interests.  
c. Relationship between Article XXI(a) and XXI(b)  
 
23. Norway disagrees with the underlying premise in the United States ' arguments that  that 
"Article XXI(a) anticipates that there may not be facts on the record before a panel that could be 
used to 'test' a Member 's invocation of Article XXI(b)" and that "a Member may be required to c hoose 
between exercising its rights under Article XXI(a) and Article XXI(b) ".13 
 
10 Appellate Body Report, EC – Hormones , para. 115.  
11 Panel Report, Russia – Traffic in Transit , para. 7.131; Panel Report, Saudi Arabia – IPRs, para. 7.247.  
12 Panel Report, Russia – Traffic in Transit , para. 7.139; Panel Report, Saudi Arabia – IPRs, para. 7.252.  
13 The United States ' first written submission, paras. 50 and 51.  WT/DS597/R/Add.1  
 
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  24. The United States ' arguments are not directed towards the interpretation of any words in 
Article XXI(b).  Instead, they are based on speculation about the amount of evidence th at might (or 
might not) be available to a panel. The interpretation of Article XXI(b) (or any other provision) 
cannot, however, be driven by speculation about the evidence  that might be available in a particular 
case involving the application of the provis ion.  Instead, the treaty terms must be given their 
ordinary meaning under the usual rules of treaty interpretation.  
25. A panel is always required, in applying its standard of review, to tailor its objective assessment 
to the particular circumstances of each dispute.  The contours of a panel 's assessment, therefore, 
vary from case -to-case.  
III. ORDER OF ANALYSIS  
 
d. The United States argues that the Panel should begin its analysis by "addressing the invocation 
by the United States of Article XXI(b) ".14 In suppor t, the United States refers to what it calls the 
"self-judging nature of that provision " and that the Panel should make no other finding in its report 
than to note its understanding of Article XXI and the United States ' invocation of the provision.15 
Norwa y disagrees with this view.  
e. Article XXI(b) operates to justify certain GATT -inconsistent action, using the same language 
as Article XX:  "nothing in this Agreement shall be construed to prevent any Member from taking 
any action which… ". Hence, Article XXI (b) is, just like Article XX, an affirmative defence to a violation 
of the GATT 1994. Under Article XX, panels and the Appellate Body have, without exception, 
addressed first whether the complainant has made out its claims of WTO -inconsistency; and second 
whether the respondent has made out its affirmative defence that the measures are justified. This 
is because an affirmative defence is only relevant where a panel has found a violation. If there is no 
violation, then the relevant exceptions provision has n o operative role; there is nothing to justify in 
the first place. Logically, therefore, where a respondent invokes Article XXI(b), the panel should first 
confirm whether there is a violation; and second whether the violation is justified.  
f. Moreover, it is w ell-accepted, from jurisprudence under Article XX of the GATT 1994, that it is 
the WTO -inconsistent aspect of the measure – and not the measure as a whole – which must be 
justified.16 Of course, a panel cannot identify the WTO -inconsistent aspects of a mea sure that would 
require justification, until it has addressed the claims. Hence, in our view, it is clear that the same 
reasoning must apply with respect to the other exceptions provisions applicable under the 
GATT  1994. By contrast, if a panel were oblige d to address Article XXI(b) before addressing the 
claims, it would also have to assess whether the measures are justified in a vacuum, without yet 
having determined which aspects of the measures are WTO -inconsistent.17 
 
14 The United States ' first written submission, para. 328.  
15 Ibid. 
16 Appellate Body Report, US – Gasoline , pp. 13 -14; Appellate Body Report, Thailand – Cigarettes , para. 
177; Appellate Body Reports, EC – Seal Products , para. 5.185.  
17 In Norway 's view, the pa nel in Russia – Traffic in Transit  erred by departing from the accepted order 
of analysis under "exceptions provisions " in the GATT 1994.  WT/DS597/R/Add.1  
 
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  ANNEX C -7 
INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF THE RUSSIAN FEDERATION  
INVOCATION OF ARTICLE XXI(B) OF THE GATT 1994  
1. The United States has invoked Article XXI(b) of the GATT 1994 seeking to defend the 
challenged measure.1  In this regard, Russia would li ke to focus on the proper interpretation of 
national security exceptions and note the following. First, the overall United States ' interpretation of 
Article XXI(b) of the GATT 1994 is wrong and leads to redundancy and inutility of the whole provision. 
The United States ' arguments regarding the self -judging nature of the security exceptions in its 
entirety are legally flawed and must be rejected.  
2. Second, Russia is of a position that when invoking Article XXI(b) of the GATT 1994 the 
respondent is under obliga tion to identify a particular subparagraph. The claimant and the Panel 
should not left to guess whether the measures at issue are related to fissionable materials or to 
materials from which they are derived under subparagraph (i), to the traffic in arms, a mmunition 
and implements of war, etc. under subparagraph (ii), or whether they are taken in time of war or 
other emergency in international relations under subparagraph (iii). Third parties to the dispute are 
neither in a position to substantiate the respo ndent 's defense. In particular, Russia notes that the 
EU's and Canada 's attempts to introduce subparagraph (iii) as a basis for the measures at issue 
have no legal value and must fail.2 The EU and Canada are not responding parties in this case.  
3. Third, the  United States ' attempts to re -argue the Russia – Traffic in Transit dispute must fail. 
The panel in this dispute undertook an extensive assessment of the matters under its jurisdiction 
and of the content of rights and obligations of the Members under Arti cle XXI(b)(iii) of the GATT 
1994 in its report, based on the text of the WTO Agreements and the relevant negotiating history. 
The United States as a third party to that dispute was provided with a sufficient opportunity to make 
its position be heard. Accor ding to the DSU third parties had the opportunity  to express their 
comments when the DSB considered the adoption of the panel report. The present dispute is not an 
appropriate forum to "appeal " the panel report which was adopted by the DSB on 26 April 2019 . 
Panels are not bound by prior panels ' decisions; however, given the objective of the dispute 
settlement system to provide security and predictability to the international trading system, Russia 
is of the view that the panel report in Russia – Traffic in Transit is relevant in this dispute and can 
guide the Panel as well.  
4. These points are dealt with in more detail below.  
5. The United States insists that, because of the self -judging nature of Article XXI(b) of the 
GATT  1994 covering the chapeau and each of the subparagraphs of this provision, the Panel allegedly 
cannot review whether or not the measures at issue are in breach of the requirements thereof.  
6. The reading of Article XXI(b) of the GATT 1994 by the United States is incorrect and 
unreasonable, it le ads to creation of the possibility for any Member to justify any violation of any 
provision of the WTO Agreements as soon as such Member merely declares the invocation of the 
said Article, irrespectively of whether the measures were indeed designed or inte nded to protect 
essential security interests of that Member in the circumstances specifically provided for therein. 
The GATT security exceptions do not offer a carte blanche  to WTO Members. The right to adopt any 
measures a Member considers necessary for p rotection of its essential security interests is 
conditioned by the content of the subparagraphs of Article XXI(b) of the GATT 1994 and the good 
faith principle.  
7. Furthermore, it should be noted that provisions of the DSU do not provide any legal basis for  
an exclusion of the measure at issue, which was declared by a WTO Member as being taken under 
Article XXI of the GATT, from the examination and assessment of its WTO -inconsistency by the Panel 
in accordance with the rules and procedures of the DSU, includ ing Article 11 of the DSU. Instead, 
 
1 US First Written Submission, para. 23.  
2 Third Party Written Submission by the European Union, paras. 16, 39 and 40; Canada 's oral 
statement, paras. 17 – 19. WT/DS597/R/Add.1  
 
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  provisions of the DSU require WTO Members to bring their complaints on WTO -inconsistency of 
measures at issue to the WTO dispute settlement procedure for panel and the Appellate Body 
examination, assessment and rulings.  
8. Russia believes that the ordinary meaning of the treaty terms of Article XXI(b) of the 
GATT  1994 gives full and unequivocal picture of the way how the Article`s provisions shall be applied 
and interpreted.  In Russia 's view, the provisions of Article XXI(b) of the GATT 1994 represent a 
combination of subjective (self -judging) and objective elements. The phrase "any action which it 
considers necessary for the protection of its essential security interests " leaves it wit hin the sole 
discretion of a Member to determine what its essential security interests are and the ways and means 
of their protection. However, this phrase does not qualify the subparagraphs, which are objective in 
their nature and are subject to objective  determination by the Panel.  
9. The panel in Russia – Traffic in Transit made an extensive review of Article XXI(b) of the 
GATT  1994 and examined the extent to which it is of self -judging nature. The panel concluded that 
the self -judging nature of the chapea u of Article XXI(b) of the GATT 1994 resulting from the use of 
words "which it considers" cannot be extended to the subparagraphs thereof. The panel found that 
the rights provided for in Article XXI(b) of the GATT 1994 are limited by the content (circumsta nces) 
set out in the subparagraphs and that such circumstances can be objectively assessed by the panel, 
including their existence.3 
10. The panel in Russia – Traffic in Transit  reasoned, inter alia , that the object and purpose of the 
GATT 1994 and the WTO Ag reement support a mandate to objectively review the requirements of 
the subparagraphs of Article XXI(b) of the GATT 1994 and that it would be entirely contrary to 
security and predictability "to interpret Article XXI as an outright potestative condition, s ubjecting 
the existence of a Member's GATT and WTO obligations to a mere expression of the unilateral will of 
that Member".4 
11. Moreover, the panel in Russia – Traffic in Transit  has concluded that "the obligation of good 
faith requires the Members not use t he exceptions in Article XXI of the GATT 1994 as a means to 
circumvent their obligations under the GATT 1994".5 
12. The Panel in Russia – Traffic in Transit clarified the "essential security interests" being the 
category of interests narrower than simply "sec urity interests" as "the quintessential functions of 
the state, namely, the protection of its territory and its population from external threats, and the 
maintenance of law and public order internally".6 Meanwhile, they will depend on the particular 
situation and perceptions of the state and can be expected to vary with changing circumstances.7In 
order to ensure that there is no abuse in the application of good faith principle, the Member, invoking 
Article XXI(b) of the GATT 1994, should articulate and th e Panel should review that "the essential 
security interests …sufficient enough to demonstrate their veracity"8 and whether the measures at 
issue are so remote from, or unrelated to the provisions of subparagraphs that it is implausible that 
the Member im plemented the measures at issue for the protection of its essential security interests.9 
13. Russia is of a position that such approach is in line with the object and purpose of the WTO 
Agreement, serves as a guarantee against possible abuses and at the same time does not prevent 
Members to exercise the right as the sovereigns to determine their essential security interests and 
the means of their protection. This alone allows panels to perform their task as provided for in 
Article  11 of the DSU, and not o nly to make an objective assessment of the matter before them, 
including an objective assessment of the facts of the case and the applicability of and conformity 
with the relevant covered agreements, including Article XXI(b) of the GATT 1994, when the said  
Article is invoked by a respondent but also to make such other findings that will assist the DSB in 
making recommendations and rulings provided for in the covered agreements.  
 
3 Panel Report, Russia – Traffic in Transit , para. 7.82.  
4 Panel Report, Russia – Traffic in Transit , paras. 7.78 - 7.79. 
5 Panel Report, Russia – Traffic in Transit , para. 7.133.  
6 Panel Report, Russia – Traffic in Transit , para. 7.130.  
7 Panel Report, Russia – Traffic in Transit , para. 7.131.  
8 Panel Report, Russia – Traffic in Transit , para. 7.134 – 7.139.  
9 Panel Report, Russia – Traffic  in Transit , paras. 7.138 - 7.145.  WT/DS597/R/Add.1  
 
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  14. Russia agrees with the conclusions of the panel in Russia – Traffic in Transit  and reaffirms that 
the words "which it considers" provided for in the chapeau of Article XXI(b) of the GATT qualify the 
chapeau only, but not the subparagraphs. This interpretation is based on the text of the Article. The 
United States' attempts to connect subparagraphs of the said Article with the words "essential 
security interests" rather than the word "actions" are fundamentally wrong.  
15. The term "which it considers" further qualifies the action  that can be taken under this provision 
(i.e. it must be cons idered to protect the Member's essential security interests). Such action is 
further conditioned by three distinct sets of circumstances enumerated (i) -(ii) connected with the 
chapeau through "relating to" and (iii) through "taken in time of".  
16.  In Russia – Traffic in Transit  the panel explained that "[t]he phrase 'relating to', as used in 
Article XX(g) of the GATT 1994, has been interpreted by the Appellate Body to require a 'close and 
genuine relationship of ends and means' between the measure and the obj ective of the Member 
adopting the measure. This is an objective relationship between the ends and the means, subject to 
objective determination".10 Therefore, the words "relating to" in subparagraphs (i) -(ii) of 
Article  XXI(b) of the GATT 1994 confirm that  the content of the said subparagraphs ("ends") is 
connected with "actions" in the chapeau ("means").  
17. The French and Spanish versions confirm that subparagraphs (i) to (iii) refer to actions and 
not to the essential security interests. A feminine "relativa s" points out that it is linked to the word 
"medidas" and not "intereses". This is relevant for subparagraph (iii) as well – "aplicadas" and 
"appliquées" can refer only to "medidas" and "mesures".  
18. Additionally, it should be noted that according to Article  33 (3) of the Vienna Convention, 
where treaties have been authenticated in two or more languages, "the terms of the treaty are 
presumed to have the same meaning in each authentic text ".  In discussing the draft text of this 
Article the International Law Commission noted that such presumption "requires that every effort 
should be made to find the common meaning for the texts before preferring one to another ".11 
Article  XVI of the WTO Agr eement provides that for the covered agreements the English, French and 
Spanish language each are authentic. The Appellate Body in US – Softwood Lumber IV  confirmed 
that "the treaty interpreter should seek the meaning that gives effect, simultaneously, to all the 
terms of the treaty, as they are used in each authentic language ".12 
19. Therefore, in Russia 's view, the meaning of the terms and provisions shall not vary depending 
the language version. The WTO dispute settlement system being a central element in pr oviding 
security and predictability shall ensure the simultaneous meaning in each authentic language 
version. Thus, Russia believes that despite certain grammatical/structural differences, the terms and 
provisions contained in the three language versions s hall be given the same meaning. Otherwise, 
different countries depending on the language preferred could be guided by different provisions and, 
therefore, apply security exceptions or any other provision of the WTO agreements in a different 
way. It is high ly dubious that the drafters intended to create a significant distinction between 
identical texts in different languages.  
20. Furthermore, since Article XXI of the GATT 1994 is an "exception" and an affirmative defense, 
the burden of proof is on the party tha t asserts such affirmative defense13 to establish the prima 
facie case of the applicability of the invoked provision to its measures at issue and of the WTO -
consistent application of the invoked exception. However, the United States failed to state a 
particular subparagraph of Article XXI(b) in justification of its measures and to provide supporting 
evidence and reasons why the specific circumstances under each of subparagraphs of Article XXI(b) 
of the GATT 1994 apply to its measures at issue.  
21. The Russian Federation recalls that "one aspect of ensuring that the proceedings are fairly 
conducted is that each party must be entitled to know the case that it has to make or to answer and 
must be afforded a fair and reasonable opportunity to do so".14 It follows t hat the burden is still on 
the United States. We find it absolutely unacceptable that third parties in these proceedings attempt 
 
10 Panel Report, Russia – Traffic in Transit , para. 7.69.  
11 Yearbook of the International Law Commission (1966), Vol. II, p. 225.  
12 Appellate Body Report, US – Softwood Lumber , para.59.  
13 Appellate Body Report, US – Wool Shirts and Blouses , p. 14, 16.  
14 Appellate Body Report, US – Large Civil Aircraft (2nd complaint) , para. 1140. (emphasis added)  WT/DS597/R/Add.1  
 
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  to fill the gaps in the United States ' defense and refer to subparagraph (iii) of Article XXI(b) of the 
GATT 1994. We are quite  surprised that from the evidence and arguments out forward by the United 
States, or rather from the lack thereof, the EU and Canada managed to arrive to an assumption that 
the situation the United States presumably refers to, or rather does not refer to, concerns an 
"emergency in international relations ". 
22. Furthermore, the EU in its Third Party Written Submission refers to certain statements made 
by the EU authorities15 to support the existence of "significant elements which can indicate that the 
situation to which the United States sought to respond by its measures is one of an "emergency in 
international relations " within the meaning of Article XXI(b)(iii) of the GATT 1994 "16. First, as it was 
already mentioned, the United States in its First Written Submi ssion did not refer to a particular 
subparagraph of Article XXI(b) and did not even mention explicitly or implicitly that the measures 
at issue were taken in time of war or other emergency in international relations between the United 
States and Hong Kong,  China. For all we (collectively) know, the United States could equally rely on 
subparagraphs (i) or (ii), or to some circumstances, situations or reasons none of which is covered 
by any of the subparagraphs set out in Article XXI(b). In any case the Unite d States did not provide 
any evidence and arguments in support that any emergency really exists. Thus, Russia believes that 
the United States failed to meet its burden of proof and the EU, whatever its reasons are, cannot fill 
in these gaps. Second, even i f the US had claimed that there was some sort of emergency in 
international relations between the United States and Hong Kong, China, the statements to which 
the EU refers do not provide any evidence thereon. They just contain certain concerns expressed by  
the EU itself. Therefore, Russia believes that the Panel should disregard the EU 's attempts to perform 
the role of the United States ' defense lawyer and the statements made in this regard.  
23. The United States asserts that Article XXI(a) anticipates the sco pe and application of 
Article  XXI(b), and, therefore, "a Member need not provide any information —to a WTO panel or 
other Members —regarding its essential security measures or its underlying security interests ".17 
Russia disagrees. Article XXI(a) and XXI(b) of the GATT 1994 are distinct . They are structured 
differently and separated by conjunction "or". A WTO Member may have recourse to any of the 
paragraphs set forth in Article XXI or may refer to several of them simultaneously. Moreover, it 
should be  noted that Article XXI(a) is applicable to every provision of the agreement, for example, 
Article XX of the GATT. However, it does not mean that the Member in this case is no longer under 
obligation to indicate specific circumstances contributing to adopt ion of the measure under general 
exceptions. Thus, Russia is of a position that each of these provisions shall be given its proper 
meaning independently of each other.  
24. Having taken such stand, i t seems that United States ' position in this respect is that 
Article XXI(a) shields the invoking Member from meeting its burden under Article XXI(b) of the 
GATT  1994, inter alia , proving the existence of circumstances as embodied in subparagraphs. Such 
position cannot be accepted.   
25. Nevertheless, Russia believes that  pursuant to Article 32 of the Vienna Convention the Panel 
could be guided by supplementary means of interpretation to confirm the meaning resulting from 
the application of Article 31 of the VCLT, nothing in GATT/ITO negotiating history suggests that the 
GATT national security exceptions are totally self -judging, thus, are not subject to any review, and 
could be challenged only as non -violating obligations.   
26.  In Russia – Traffic in Transit  the panel examined the negotiating history of Article XXI of the 
GATT 1947, including draft texts and discussions, inter alia , to which the United States refers in 
these proceedings. The panel concluded that the negotiating history confirms that "the eval uation 
of whether the invoking Member has satisfied the requirements of the enumerated subparagraphs 
of Article XXI(b) made objectively rather than by the invoking Member itself".18 The panel stressed 
that "there is no basis for treating the invocation of Article XXI(b)(iii) of the GATT 1994 as an 
incantation that shields a challenged measure from all scrutiny".19Russia agrees.  
 
15 Third Party Written Submission by the European Union, paras. 11 – 16.  
16 Ibid, para. 39.  
17 US First Written Submission, para. 50.  
18 Panel Report, Russia – Traffic in Transit , para. 7.100.  
19 Ibid. WT/DS597/R/Add.1  
 
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  27. Finally, the only conclusion that could be made based on GATT/ITO negotiating history is that 
if the taken action meets the releva nt requirements, then it will be justified and consistent with 
security exception provisions. If it is consistent and nullifies or impairs benefits, nothing shall 
preclude the Member to lodge a non -violation complaint. If it does not meet these requirement s 
(e.g. taken in normal times), then the action will be inconsistent with the relevant provisions and, 
thus, non -violation complaint will not available. No specific rules in respect of security exceptions 
were established - the availability of the non -violation complaints for the Members does not affect 
the right of the Members to make use of the violation complaints.   
28. Moreover, Russia would like to refer to the Communication by the United States  
of 10 June 2014 IP/C/W/599 regarding Non -violation Complaint s under the TRIPS Agreement which 
confirmed that in fact the United States does not expect any non -violation complaints, even if 
brought against the United States, to be successful, because security exceptions were written into 
the respective agreements, a greed by all Members and, therefore, could be foreseen by the Member 
affected by other's Member measures undertaken under Article XXI(b) of the GATT 1994.  
 WT/DS597/R/Add.1  
 
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  ANNEX C -8 
INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF SINGAPORE  
I. INTRODUCTION  
 
1. Singapore attaches great importance to upholding an open, stable, and predictable rules -
based multilateral trading system. As such, Singapore has consistently intervened as a third 
party in past WTO disputes where security exceptions were in voked1, given Singapore's keen 
interest in this issue. In this particular dispute, the novel but significant issue of whether 
security exceptions are applicable to the Agreement on Rules of Origin and the Agreement on 
Technical Barriers to Trade ("TBT Agr eement") has arisen and Singapore therefore considers 
it important to state its views. However, Singapore emphasises that it is not commenting on 
the merits of the legal claims and defences raised by the parties to the current dispute. 
Singapore's particip ation is strictly confined to the legal interpretation and applicability of the 
security exceptions.  
 
II. EXECUTIVE SUMMARY OF SINGAPORE'S THIRD PARTY ORAL STATEMENT  
 
A. Applicability of Article XXI of the General Agreement on Tariffs and Trade 1994 
("GAT T 1994") to the Agreement on Rules of Origin and the TBT Agreement  
 
2. Without taking a position on whether the claims of inconsistencies with the Agreement on 
Rules of Origin and the TBT Agreement are prima facie  valid, in the event the Panel proceeds 
to consider the applicability of Article XXI to these two agreements, in determining  the 
relationship between the provisions of different covered agreements, the Appellate Body has 
applied a standard "analytical approach". This requires an agreement -by-agreement analysis 
that starts with the text of the agreement in question, an d entails a "thorough analysis of the 
relevant provisions", on the understanding that the lack of an express textual reference is not 
dispositive in and of itself.2 Further, the relationship must be "ascertained through scrutiny of 
the provisions concerne d, read in the light of their context and object and purpose, with due 
account being taken of the overall architecture of the WTO system as a single package of 
rights and obligations, and any specific provisions that govern or shed light on the relationshi p 
between the provisions of different instruments".3 As such, the absence of an explicit cross -
reference to or incorporation of Article XXI in these two agreements is not per se  dispositive 
of the issue.  
 
3. The analysis  in Thailand – Cigarettes (Philippines) (Article 21.5 – Philippines)  is instructive . 
The question was whether Article XX of the GATT 1994 is applicable to the  Agreement on 
Implementation of Article VII of the GATT 1994  (Agreement on Customs Valuation), in light 
of its preambular re ferences to the GATT 1994. The panel noted that a preamble is useful for 
providing interpretative context for the operative provisions being interpreted; the language 
and the title to the Agreement on Customs Valuation reflect a general link between the 
Agreement on Customs Valuation and the GATT 1994, but do not establish any textual link to 
Article XX of the GATT 1994.4 The panel also held that the applicability of Article XX of the 
GATT 1994 must be decided on the basis of a clear and sufficient textual  link between 
provisions of the GATT 1994, especially Article XX, and the agreement to which Article XX 
allegedly applies.5   
 
 
1 The disputes in DS512, DS567, DS526, and the set of disputes in DS544, DS547, DS548, DS552, DS554, 
DS556 and DS564.  
2 Appellate Body Reports, China – Rare Earths , paras. 5.61 to 5.63.  
3 Appellate Body Reports, China – Rare Earths , para. 5.55. 
4 Panel Report, Thailand – Cigarettes (Philippines) (Article 21.5 – Philippines), paras. 7.748 and 7.749.  
5 Panel Report, Thailand – Cigarettes (Philippine s) (Article 21.5 – Philippines), para. 7.750.  WT/DS597/R/Add.1  
 
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  4. Some of the multilateral agreements on trade in goods within Annex 1A of the WTO Agreement 
have explicit language that specifica lly provide for the application of security  exceptions.6 
Some of the agreements within other Annexes of the WTO Agreement also have such explicit 
language.7 The initial conclusion that can be drawn is that the presence of such explicit 
language in only certain  agreements is an indication that Article XXI of the GATT 1994 is not 
intended to apply across -the-board to all Annex 1A agreements.  
 
5. The Agreement on Rules of Origin and the TBT Agreement do not have the above -mentioned 
explicit language. While the re are references to "essential security interest" and "national 
security" in the TBT Agreement, there is the complete absence of such references in the 
Agreement  on Rules of Origin . The various references to the provisions of the GATT 1994 in 
both the mai n text and preamble of the Agreement  on Rules of Origin,  which reflect the 
relationship between the Agreement on Rules of Origin and the GATT 1994, are merely of a 
general nature. As such, there is insufficient textual basis for applying Article XXI of the  
GATT  1994 to the Agreement  on Rules of Origin .  
 
6. In contrast, the TBT Agreement contains the terms "essential security interest" and "national 
security " in various discrete provisions8, each with their own unique drafting. As such, to layer 
over these the blanket application of Article XXI of the GATT 1994 simply because the TBT 
Agreement is one of the Annex 1A agreements is legally untenable. In particular, to do so 
would render otiose  Article 10.8.3 of the TBT Agreement, as it has almost  the exact wording 
as Article XXI(a) of the GATT 1994. If there were such blanket application of Article XXI, there 
would be no need for Article 10.8.3 because Article XXI(a) would already have applied by 
virtue of the blanket application of Article XXI.  
 
7. What matters instead is the presence of language which can be interpreted as applying the 
consideration of essential security interests/national security to obligations in the 
TBT Agreement. The 7th Recital and Article 10.8.3 of the TBT Agreement are two such discrete 
provisions which have cross -cutting application within the TBT Agreement. The Appellate Body 
has read Members ' right to regulate in the 6th Recital as counterbalancing  the trade -
liberalizat ion objective expressed in the 5th Recital.9 The 7th Recital (which has the same 
opening phrase as the 6th Recital) also plays a similar balancing role, and due recognition must 
be given to the language in the 7th Recital. Given that the preamble is usefu l for providing 
interpretative context for the provisions being interpreted, the 7th Recital can be considered 
by the Panel in the interpretation of obligations in the TBT Agreement.  
 
B. Interpretation of Article XXI(b) of the GATT 1994 – the applicable te st 
 
8. As regards the test that the Panel should apply in the interpretation of Article XXI(b), in the 
event the Panel finds inconsistencies with the GATT 1994, Singapore has three points to 
highlight.  
 
9. First, the word "it" in the phrase "it considers necessary" clearly refers to a "contracting party". 
This has to be from the standpoint of the Member invoking the e xception and whether the 
Member considers the action to be necessary. This phrase points to the self -judging nature of 
the assessment, indicating that a Member is allowed to determine with a significant degree of 
subjectivity what action "it considers nece ssary" to protect "its essential security interests".  
  
10. Second , the assessment of threats  to the essential security interests of a Member and the 
necessary measures in response involves judgement on the part of that Member and is 
dependent on the particula r context and circumstances of that Member. In arriving at this 
judgment, every Member has to make determinations of the security threats, sometimes 
under the most urgent circumstances, relying on information the disclosure of which may itself 
prejudice th e security interest of the Member or other Members. Therefore, there is necessarily 
a degree of subjectivity in this exercise, and an accompanying diversity of assessments that 
 
6 Apart from Article XXI of the GATT 1994, there are Article 3 of the Agreement on Trade -Related 
Investment Measures, Article 1.10 of the Agreement on Import Licensing Procedures and Article 24.7 of the 
Agreeme nt on Trade Facilitation.  
7 Article 73 of the Agreement on Trade -Related Aspects of Intellectual Property Rights and Article XIV bis 
of the General Agreement on Trade in Services.  
8 The 7th Recital, Articles 2.2, 2.10, 5.4, 5.7 and 10.8.3.  
9 Appellate Body  Report, US – Clove Cigarettes , paras. 95, 109 and 174.  WT/DS597/R/Add.1  
 
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  has to be respected. It would be well within a Member's right to take a measure  to deal with 
the threat and to protect its essential security interests even though a different measure is 
taken by another Member in response to the same type of threat.  
 
11. Third, there are many areas in the WTO regime where some margin of appreciation is 
accepted, for example, in the context of the Agreement on the Application of Sanitary and 
Phytosanitary Measures,10 and in relation to the necessity of a measure taken for the 
protection of health under the GATT 1994.11 None of these provis ions come anywhere close 
to being as explicit and definitive with respect to self -judgment as Article XXI(b). A fortiori , a 
higher level of deference , and a significant margin of appreciation, should be accorded to a 
Member's chosen level of protection, an d its assessment of risk and of the necessity of a 
measure taken for the protection of its essential security interests.  
 
12. That said, Article XXI(b) should not be read as giving a Member entirely unfettered discretion 
in invoking this exception. A Member m ust act in accordance  with the standard of good faith 
as set out in Article 26 of the Vienna Convention on the Law of Treaties ("VCLT")12 and with 
the general international law prohibition of abuse of rights. It is also well accepted that a 
Member seeking to rely on an affirmative exception bears the burden of proof. The Member 
invoking Article XXI would have to provide its reason(s) for doing so. The Member should 
minimally explain its course of action and invocation of Article XXI, bearing in mind the mar gin 
of appreciation to be accorded to Members on matters involving their essential security 
interests. The extent and degree of detail required is fact and context specific and will be 
informed by the specific circumstances and the underlying security and confidentiality 
considerations. Singapore generally agrees with the Russia – Traffic in Transit panel's analysis 
of Article XXI(b)(iii).  
III. EXECUTIVE SUMMARY OF SINGAPORE'S RESPONSES TO PANEL'S QUESTIONS TO 
THIRD PARTIES  
 
C. Response to Question  10  
 
13. Paragraphs 216 and 283 of the Appellate Body report in US – Tuna II (Mexico) recalled and 
applied the established principle that the burden of proof rests upon the party who asserts the 
affirmative of a particular claim or defence, and that the party who ass erts a fact is responsible 
for providing proof thereof. Where the complaining party has met the burden of making its 
prima facie  case, it is then for the responding party to rebut that showing.  
 
14. In the context of Article 2.1 of the TBT Agreement, the Appe llate Body  has held that the 
complainant must prove its claim by showing that the treatment accorded to imported 
products is "less favourable" than that accorded to like domestic products or like products 
originating in any other country. If less favourable treatment is prima facie  established, the 
measure may nevertheless be consistent with Article 2.1 if the detrimental impact on imported 
products stems exclusively from a legitimate regulatory distinction.13 However, the burden of 
showing that the detrimental impact stems exclusively from a legitimate regulatory distinction 
falls on the respondent. Having promulgated the technical regulation containing the regulatory 
distinction, the respondent will be best s ituated to explain why the detrimental impact stems 
exclusively from a legitimate regulatory distinction.14 
  
15. Both the 6th and 7th Recitals play similar roles counterbalancing the trade -liberalisation 
objective expressed in the 5th Recital of TBT Agreement . The preamble is useful for providing 
interpretative context for the provisions being interpreted, including the interpretation of what 
would constitute a legitimate regulatory distinction. Essential security interests may therefore 
form the basis of a le gitimate regulatory distinction under Article 2.1. Where this is asserted, 
the burden of proving it would likewise fall upon the respondent.   
 
 
10 Appellate Body Report, Australia – Salmon , para. 199.  
11 Appellate Body Report, EC – Asbestos , para. 168.  
12 Done at Vienna, 23 May 1969, 1155 U.N.T.S. 331; 8 International Legal Materials 679.  
13 Appellate Body Reports, US – Clove Cigarettes, paras. 180-182, US – Tuna II (Mexico) , paras. 215 -
216, US – COOL , paras. 271 -272. 
14 Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico),  paras. 7.32–7.33. WT/DS597/R/Add.1  
 
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  16. As for the specific application  of the Recitals in determining whether there is legitimate 
regulatory distinctio n, there is a significant difference between the 6th and 7th Recitals on the 
extent to which deference will be given to a respondent Member. The Appellate Body has 
indicated  that "[t]he sixth recital suggests that Members' right to regulate should not be 
constrained if the measures taken are necessary to fulfil certain legitimate policy objectives, 
and provided that they are not applied in a manner that would constitute a means of arbitrary 
or unjustifiable discrimination or a disguised restriction on inter national trade, and are 
otherwise in accordance with the provisions of the [TBT] Agreement."15 Comparing the 6th and 
7th Recitals, it is clear that the proviso stated in the quoted text would  be of no relevance in 
the context of 7th Recital. As such, there  is greater discretion afforded to a regulating Member 
when the legitimate policy objective being pursued pertains to the protection of its essential 
security interests, as compared to those objectives in the 6th Recital. While the term "which it 
considers " found in Article XXI(b) of the GATT 1994 is missing from the 7th Recital, significant 
deference has to be accorded to that Member given the very nature of essential security 
interests. That said, the Member must act in accordance with the standard of goo d faith as 
set out in Article 26 of the VCLT.  
 
D. Response to Questions 15 and 16  
 
17. The Panel would need to apply a standard "analytical approach".16 As such, the absence of an 
explicit cross -reference to or incorporation of Article XXI in these two agreements is not per 
se dispositive of the issue. There is insufficient textual basis for applying Article XXI of the 
GATT 1994 to the Agreement on Rules of Origin. As for the TBT Agreement, there are various 
discrete provisions that contain the terms "essential security interest" or "national security", 
and to layer over these the blanket application of Article XXI of the GATT 1994 is legally 
untenable; wh at matters is the presence of these discrete provisions within the TBT 
Agreement, which can be interpreted as applying the consideration of essential security 
interests/national security to obligations in the TBT Agreement.  
 
E. Response to Question 33  
 
18. Article XXI(a) and Article XXI(b) deal with different situations. Article XXI(a) is concerned with 
a scenario where a Member  is asked to "furnish" information, the disclosure of which it 
considers contrary to that Member's essential security interest. In contrast, Article XXI(b) 
deals with the situation in which a Member takes actions which it considers necessary for the 
protec tion of its essential security interest. The Member would need to demonstrate that its 
measure is applied in good faith. This is a contextual exercise and minimally calls for the 
Member to provide a narrative to explain its course of action and invocation of Article XXI(b), 
to articulate the applicability of the conditions in the sub -paragraphs to Article XXI(b), while 
bearing in mind the margin of appreciation to be accorded to Members on matters involving 
their essential security interests.   
 
F. Response to Question 35  
 
19. The phrase "which it considers" in Article XXI(b) points to the self -judging nature of the 
assessment under Article XXI(b) and indicates that a Member is allowed to determine with a 
significant degree of subjectivity  what action "it conside rs necessary" to protect "its essential 
security interests". Given this phrase, a higher level of deference, and a significant margin of 
appreciation, should be accorded to a Member's chosen level of protection, and its assessment 
of risk and of the necess ity of a measure taken for the protection of its essential security 
interests. This gives effect to the phrase "which it considers".  
 
G. Response to Question 48  
 
20. The phrase " which  it considers" points to the self -judging nature of the assessment and 
indicates that a Member is allowed  to determine with a significant degree of subjectivity what 
action "it considers necessary" to protect "its essential security interests". Under 
Article XXI(b), a higher level of deference, and a significant margin of appreciation, should be 
 
15 Appellate Body Report, US – Clove Cigarettes , para. 95. [emphasis added]  
16 Appellate Body Reports, China – Rare Earths , paras. 5.55, 5.61-5.63; see also Panel Report, Thailand 
– Cigarettes (Philippines) (Article 21.5 – Philippines) , paras. 7.748 and 7.749 . WT/DS597/R/Add.1  
 
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  accorded to a Member's  chosen level of protection, and its assessment of risk and of the 
necessity of a measure taken for the protection of its essential security i nterests.  
 
H. Response to Question 50  
 
21. Singapore does not read paragraph 7.135 of the Russia – Traffic in Transit  report as having 
imposed a territorial limitation. Rather, the panel's observations relate more to the level of 
specificity or articulation that is required by an invoking Member to invoke Article XXI(b), 
including Article XXI(b)(iii), and which will be f act and context specific.  
 
I. Response to Question 52  
 
22. Singapore generally  agrees with the panel's observation at paragraph 7.74 of the Russia – 
Traffic in Transit  report on the matters addressed by the subparagraphs of Article XXI(b). 
While subparagraphs of Article XXI(b) are intended to be exhaustive, it would be inadvisable 
for a panel to put forward a label or prescriptive definition of what constitutes the 
circumstances listed in the subparagraphs. For example, in the case of subparagraph (iii), the 
panel states that there is a useful "sliding scale" of circumstances that might qualify as an 
"emergency in international relations", including "heightened tension or crisis" or "general 
instability engulfing or surrounding a state". Singapore agrees with th is conclusion and notes 
that a panel should adopt a contextual approach in assessing the circumstances, and also be 
alive to the possibility that the specific interests that would arise from the subparagraphs of 
Article XXI(b) may evolve over time.    
 
J. Response to Question 56  
 
23. Singapore's approach does not diverge from Russia – Traffic in Transit . At paragraph 7.138, 
the panel states that the obligation of good faith requires that, under Article XXI(b)(iii), the 
measures at issue must meet a minimum requ irement of plausibility in relation to a proffered 
essential security interest. The panel reviewed whether the measures were so remote from, 
or unrelated to, the emergency that it was implausible that Russia had implemented measures 
for protection of its e ssential security interests arising out of the emergency. At paragraph 
7.134, the panel stated that it is incumbent on the invoking Member to articulate the essential 
security interests sufficiently enough to demonstrate their veracity. Singapore's approac h is 
consistent with this. As noted, a Member should minimally explain its course of action and 
invocation of Article XXI. However, once it is established that the minimum requirement of 
plausibility has been met, a panel should accord a higher level of de ference and significant 
margin of appreciation to the Member's chosen level of protection, its assessment of risk and 
of the necessity of the measure that had been taken.  WT/DS597/R/Add.1  
 
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  ANNEX C -9 
INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF SWITZER LAND  
I. INTERPRETATION OF ARTICLE XXI(b) OF THE GATT 1994  
 
a) Introduction  
 
1. Switzerland submits that the correct interpretation of Article XXI(b), on the basis of the 
ordinary meaning of its terms, taken in their context and in light of the object and purpose of the 
GATT 1994 and the WTO Agreement, clearly establishes that the WTO Member invoking 
Article  XXI(b) as a defence does not enjoy absolute discretion and a panel needs to review whether 
the conditions set out in that provision are satisfied. Swit zerland is of the view that recourse to 
supplementary means of interpretation, including the negotiating history , is not necessary, given 
that t he interpretation based on the text of Article XXI(b) in its context and in light of the object and 
purpose of t he GATT is clear. Switzerland wants to stress that interpreting Article XXI(b) as a self -
judging provision not subject to review by a panel is also manifestly inconsistent with fundamental 
obligations and principles set out in the covered agreements, in pa rticular in the DSU.  
b) Interpretation of Article XXI(b) based on the text of that provision, its context 
and the object and purpose of the GATT 1994  
 
1) The text of Article XXI(b)  
2. First, Switzerland considers that it is clear from the text of Article XXI(b),  including its structure 
and grammar, that the phrase "which it considers " does not qualify the subparagraphs nor the 
remaining part of the chapeau, and only qualifies the "necessity " of the action.  
3. In terms of structure, Article XXI(b) of the GATT 1994 i s composed of two distinct parts: on 
the one hand, the chapeau and on the other hand, the three subparagraphs. Furthermore, 
Switzerland also submits that it is clear from the wording and the grammatical structure of 
Article  XXI(b) that the three subparagra phs and the circumstances identified therein qualify the word 
"action " in the chapeau and are not part of the clause "which it considers necessary for the protection 
of its essential security interests ".  
4. In fact, the relative clause that follows the word "action " starts with "which it considers " and 
ends at the end of the chapeau with "essential security interests ". The subparagraphs (i), (ii) and 
(iii) are not part of the relative clause. They constitute coordinated participial clauses which relate 
direct ly and modify the noun "action " in the chapeau. More specifically, subparagraphs (i), (ii) and 
(iii) constitute a case of "coordinate construction ", which means that the three subparagraphs of 
Article XXI(b) must have the same function. Given that it is undisputed and undisputable that 
subparagraph (iii) relates to the noun "action " – the United States itself acknowledges this1 –, it 
means that all three subparagraphs modify the noun "action " in the chapeau. In other words, from 
a grammatical viewpoint, it is not possible that subparagraphs (i) and (ii) modify the noun "interests " 
if (iii) modifies the noun "action ". 
5. Thus, in Article XXI(b), we have a case of double modification of the noun "action ": the first 
modifier is the relative clause ( "which it considers necessary for the protection of its essential 
security interests ") while the second modifier is the coordinate construction including subpara graphs 
(i), (ii) and (iii).  
6. This analysis is not only supported by, but also is the only one consistent with, the French and 
Spanish versions of Article XXI(b). In particular, in the Spanish version, the word "relativas " is not 
included in the subparagraph s but at the end of the chapeau to introduce the three subparagraphs. 
Given that this word is feminine and plural, it can relate to the only other word in the chapeau which 
is feminine and plural, i.e. "medidas " ("action ").  
 
1 United States' first written submission, para. 45.  WT/DS597/R/Add.1  
 
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  7. Second, the chapeau and subpara graphs identify objective elements that are subject to 
objective determination by a panel. Regarding the subparagraphs, they all refer to objective 
elements, as noted by the panel in Russia – Traffic in Transit2.  
8. Regarding the chapeau, the fact that the phrase "essential security interests " of a Member 
implies a degree of discretion, does not mean that whether an interest may be regarded as an 
"essential security interest " may not objectively be assessed by a panel. Similarly, a panel must 
make an objecti ve assessment of whether there is a rational connection between the action taken 
and the protection of the Member’s essential security interests  given that the action must be taken 
"for" the protection of "essential security interests ". 
9. The word "considers " does not imply boundless discretion. The word "consider " is defined inter 
alia as to "estimate, reckon ".3 Thus, the Member taking the action must "estimate " or "reckon " that 
the action taken is "necessary " for the protection of its essential se curity interests. This meaning is 
consistent with the French and Spanish versions of Article XXI(b).  
10. Switzerland submits that the discretion granted to the Member as to the "necessity " of its 
action implies that no comparison of the action taken by that Me mber against a benchmark of a less 
trade restrictive action that could have been taken by that WTO Member instead is required. 
However, the Member invoking that defence must still present the grounds for its finding of the 
"necessity " of the measure in ord er for the panel to assess whether the Member has exercised its 
discretion in good faith.  
2) The context of Article XXI(b)  
11. The immediate context provided by the other paragraphs of Article XXI, as well as the broader 
context provided by other provisions of t he GATT 1994 support the conclusion that Article XXI(b) is 
reviewable by a panel.  
12. First, Article XXI(a) merely notes that a Member does not need to provide information "the 
disclosure of which " it considers contrary to its essential security interests. Im portantly, 
Article  XXI(a) does not relieve a WTO Member from its burden of proof in the context of dispute 
settlement proceedings. Article XXI(a) does not change the principle confirmed by the Appellate 
Body that "the burden of proof rests upon the party, whether complaining or defending, who asserts 
the affirmative of a particular claim or defence ".4  
13. In addition, the fact that t he phrase "which it considers necessary " is not present in XXI(c) 
does not imply that Article XXI is not reviewable by a panel. As seen above, the phrase "which it 
considers " in Article XXI(b) only qualifies the "necessity " of the action and does not qualify the 
subparagraphs nor the remaining p art of the chapeau. Moreover, the phrase "taken in time of " 
describes the connection between the action and the events of war or other emergency in 
international relations. This connection is a temporal one, which is an objective fact, amenable to 
objectiv e determination.  
14. Second, the broader context provided by other provisions of the GATT 1994, in particular 
Article XX, also supports the conclusion that the invocation of Article XXI(b) is reviewable by a panel. 
Both Article XX and Article XXI, which are e ntitled "exceptions ", constitute defences to measures 
that are inconsistent with the GATT 1994. They are in the nature of "affirmative defences ", which 
means that it is up to the party invoking the exception to offer proof that the conditions set out in 
the provision laying down the exception are met. Article XX and Article XXI also have a similar 
structure, including a chapeau and a number of subparagraphs. The Appellate Body found that 
Article  XX sets out a two -tier test for determining whether a measure can be justified under that 
provision, namely first, whether the measure falls under one of the ten exceptions listed in the 
paragraphs of Article XX and second, whether it satisfies the requirements of the chapeau.5 The 
similar structure of Article XXI(b ) suggests that a similar approach should be followed in the context 
of Article XXI(b) whereby the Panel first assesses whether the circumstance identified under one of 
 
2 Panel Report, Russia – Traffic in Transit , para. 7.82  
3 Shorter Oxford English Dictionary , 6th ed., A. Stevenson (eds.) (Oxford University Press, 2007), Vol.1, 
p. 496.  
4 Appellate Body Report, US – Wool Shirts and Blouses , p. 14.  
5 Appellate Body Report, Indonesia – Import Licensing Regime , para. 5.96.  WT/DS597/R/Add.1  
 
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  the subparagraphs is met before examining whether the measure satisfies the conditions of the 
chapeau.  
3) The object  and purpose of the GATT 1994  
15. That Article XXI(b) is subject to the panel’s review is further supported by the object and 
purpose of the GATT 1994 which is inter alia  "the security and predictability of ‘the reciprocal and 
mutual ly advantageous arrangements and the substantial reduction of tariffs and other barriers to 
trade’ ".6 The possibility to completely shield a trade -restrictive measure from any scrutiny by merely 
invoking Article XXI(b) would be entirely contrary to the se curity and predictability of the multilateral 
trading system established by the GATT 1994 and the WTO Agreements.7  
16. While Switzerland agrees with the observation that the GATT contains both obligations and 
exceptions (including the Article XXI(b) exceptio n), it submits that the need to maintain "a balance 
of rights and obligations between the right of a Member to invoke one or another of the exceptions 
[…], on the one hand, and the substantive rights of the other Members under the GATT 1994, on 
the other h and"8 implies that the invocation of Article XXI(b) as an exception is necessarily 
reviewable by a panel.  
c) Negotiating history and supplementary means of interpretation  
 
17. Switzerland submits that there is no need to look at supplementary means of interpretation. 
The interpretation based on the text of Article XXI(b) in its context and in light of the object and 
purpose of the GATT is clear: Article XXI(b) is not self -judging.  
18. The interpretation of Article XXI(b) according to its ordinary meaning, i n its context and in 
light of the object and purpose of the GATT 1994, is clear and reasonable. Thus, the interpretation 
of Article XXI(b) according to Article 31 of the Vienna Convention does not leave the meaning 
ambiguous or obscure and does not lead to  a result which is manifestly absurd or unreasonable . In 
these circumstances, recourse to the supplementary means of interpretation is not necessary . 
19. In any event, supplementary means of interpretation, including the negotiating history, do 
not support the  United States’ interpretation as confirmed by the Panel Report in Russia – Traffic in 
Transit .9  
d) Fundamental obligations and principles  
 
20. Removing a matter from the scope of a panel’s review because the defending party invokes 
Article XXI(b) of the GA TT has also no basis in the DSU. In fact, it would be contrary to various 
principles and obligations included in the WTO covered agreements and, in particular, in the DSU 
which establish that the Panel shall duly exercise its jurisdiction.  
21. Pursuant to Arti cle 11 of the DSU, panels must make an objective assessment of the facts of 
the case and the applicability of and conformity with the relevant covered agreements. This implies 
making findings with respect to the claims raised by the complainants. In some c ases, panels will 
be also required to make "such other findings " pursuant to Article 11 of the DSU as those may be 
necessary for the DSB to make the recommendations or give the rulings provided for in the covered 
agreements.  
22.  Article 23.1 of the DSU requi res Members which "seek the redress of a violation of obligations 
or other nullification or impairment of benefits under the covered agreements " to "have recourse to, 
and abide by, the rules and procedures of this Understanding ". When read together with Ar ticle 3.3 
of the DSU, the Appellate Body has concluded that "[t]he fact that a Member may initiate a WTO 
dispute whenever it considers that ‘any benefits accruing to [that Member] are being impaired by 
measures taken by another Member’ implies that that Me mber is entitled  to a ruling by a WTO 
 
6 Appellate Body Report, EC – Chicken Cuts , para. 243. See also Appellate Body Report, EC – Computer 
Equipment , para. 82.  
7 Panel Report, Russia – Traffic in Transit , para. 7.79.  
8 Appellate Body Report, US – Shrimp , para. 156.  
9 See Panel Report, Russia – Traffic in Transit , paras. 7.83 -7.100.  WT/DS597/R/Add.1  
 
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  panel. "10 Concluding that this Panel cannot make findings on Hong Kong’s claims would "diminish " 
Hong Kong’s right to seek redress within the meaning of Article 23 of the DSU and to bring a dispute 
pursuant to Article 3.3 of the DSU.11  
23. Accepting that the mere invocation of Article XXI(b) of the GATT 1994 automatically excludes 
the challenged measure  from any scrutiny by a panel or the Appellate Body would also be 
inconsistent with Article 23.2(a) of the DSU which prohibits Members from making a determination 
to the effect that a violation has occurred, except through recourse to the multilateral disp ute 
settlement system. Indeed, if Article XXI(b) is exempted from any review, this would mean that, by 
merely invoking that provision, WTO Members would be able to unilaterally decide the outcome of a 
dispute, in place of WTO adjudicating bodies, contrary to the obligation laid down in Article 23.2(a) 
of the DSU.  
II. ORDER OF ANALYSIS AND BURDEN OF PROOF  
 
24. Article XXI(b) of the GATT 1994, like Article XX, constitutes an affirmative defence that may 
be invoked to justify a measure that is inconsistent with t he GATT 1994. This has important 
implications for the order of analysis that should be followed by this Panel and for the allocation of 
the burden of proof.  
25. First, as explained by the Appellate Body, "an analysis of whether a measure infringes an 
obligatio n necessarily precedes, and is distinct from, the ‘further and separate’ assessment of 
whether such measure is otherwise justified ".12 Thus, in the present case, the Panel must first 
address the claims of violation before addressing a defence under Article  XXI. This is a logical order 
since if there is no violation, a defence under Article XXI would not even come into play.13 This order 
of analysis is also necessary since it is the WTO -inconsistent aspect of the measure, not the measure 
as a whole, that mus t be justified under an affirmative defence.14 In order to identify the WTO -
inconsistent aspects of a measure, a panel must first examine the claims of violation put forward by 
a complainant.  
26. Second, the fact that a provision is an affirmative defence mean s that the burden of proof is 
on the party asserting that defence.15 Indeed, "the burden of proof rests upon the party, whether 
complaining or defending, who asserts the affirmative of a particular claim or defence ".16 A 
responding party invoking Article X XI(b) bears the burden of proving first that its defence under 
Article XXI(b) of the GATT 1994 is available and second (and if so) that the conditions laid down in 
Article XXI(b) are fulfilled.17 This requires submitting evidence, presenting arguments and linking 
the evidence to the arguments raised.   
27. In that regard, a responding party invoking Article XXI(b) must also clearly indicate which of 
the subparagraphs of Article XXI(b) it is relying on for its defence . Furthermore, Switzerland recalls 
that the Ap pellate Body stressed that "the principles of good faith and due process oblige a 
responding party to articulate its defence promptly  and clearly . This will enable the complaining 
party to understand that a specific defence has been made, ‘be aware of its dimensions, and have 
an adequate opportunity to address and respond to it’. "18 
III. WHETHER ARTICLE XXI(b) IS AVAILABLE TO JUSTIFY MEASURES INCONSISTENT 
WITH THE AGREEMENT ON RULES OF ORIGIN AND THE TBT AGREEMENT  
 
28. In the context of Article XX of the G ATT 1994, which, like Article XXI, contains the words 
"nothing in this Agreement ", the Appellate Body explained that whether that provision may be 
invoked to justify a breach of an obligation set out in another covered agreement requires a case -
 
10 Appellate Body Report, Mexico – Taxes on Soft Drinks , para. 52. (emphasis original)  
11 Ibid, para. 53.  
12 Appellate Body Report, Thailand – Cigarettes (Philippines) , para. 173, referring to the Appellate Body  
Report in US – Gasoline , p. 23 and GATT Panel Report in US – Section 337 Tariff Act , para. 5.9.  
13 Panel Report, Dominican Republic – Import and Sale of Cigarettes , para. 7.107.  
14 Appellate Body Report, US – Gasoline , pp. 13 -14. 
15 Appellate Body Report, US – Wool Shirts and Blouses , p. 14.  
16 Ibid. 
17 Panel Report, Turkey – Textiles , para. 9.57.  
18 Appellate Body Report, US – Gambling , para. 272. (emphasis added)  WT/DS597/R/Add.1  
 
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  by-case ana lysis of the relationship between the relevant provisions.19 The Appellate Body noted 
that such examination will lead to the conclusion that exceptions in one covered agreement, such 
as Article XX of the GATT 1994, may be invoked to justify a breach of an obligation in another 
covered agreement, for instance where that other agreement contains an express language 
incorporating that provision.20 The Appellate Body noted that, where there is no such express 
language, recourse to other interpretative elements will be necessary to determine the specific 
relationship among individual terms and provisions of the relevant agreements. Switzerland 
considers that the same approach should be followed for determining the applicability of the 
Article  XXI exceptions outsi de of the GATT 1994.  
29. Switzerland notes that certain Agreements included in Annex 1A do explicitly provide that 
Article XXI of the GATT 1994, or more generally the exceptions under the GATT 1994, apply in the 
context of those agreements. For instance, Article 1.10 of the Agreement on Import Licensing 
Procedures, Article 3 of the TRIMS Agreement and Article 23.7 of the Trade Facilitation Agreement. 
Switzerland notes that no such provision can be found in the Agreement on Rules of Origin or in t he 
TBT Agreement.  
30. Absent a specific provision incorporating the text, or explicitly providing for the applicability 
of Article XXI of the GATT, its applicability to another agreement may nevertheless result from the 
specific links between  Article XXI and the provisions of such other agreement.21 The existence of 
such specific links must be assessed on a case -by-case basis, through a thorough analysis of the 
relevant provisions on the basis of the customary rules of treaty interpretation, a s well as the 
circumstances of each dispute.22 A general link between the GATT 1994 and another agreement 
listed in Annex 1A, such as a reference to the GATT 1994 or the fact that an agreement "elaborates" 
upon the disciplines set out in the GATT 1994 , will not suffice. Similarly, references to Articles XXII 
and XXIII of the GATT 1994 and to the DSU do not support the applicability of Article XXI to the ARO 
and the TBT Agreement.
 
19 Appellate  Body Reports, China – Rare Earths , para. 5.55.  
20 Ibid, para. 5.56.  
21 Panel Report, Thailand – Cigarettes (Philippines) (Article 21 .5 – Philippines) , paras. 7.744.  
22 See Appellate  Body Reports, China – Rare Earths , para. 5.57.  WT/DS597/R/Add.1  
 
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  ANNEX C -10 
INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF UKRAINE  
1. INTRODUCTION  
 
1. In its written submission and responses to questions posed by the Panel to the third parties 
Ukraine provided comments on certain aspects of understanding and meaning of Article 2(c) and (d) 
of the Agreement on Rules of Origin ( "ARO"), the in terpretation and application of Article XXI of the 
General Agreement on Tariffs and Trade 1994 ( "GATT 1994 ") with respect to the measures 
concerning the origin marking requirement introduced by the United States to goods manufactured 
or produced within the  customs territory of Hong Kong, China.  
2. CLAIMS REGARDING ARTICLE XXI OF THE GATT 1994  
 
2. Ukraine is of the view that the question of the authority of a panel to review invocation of 
Article XXI of the GATT 1994 should not be a matter in any further disput es. Without repetition of 
the findings in Russia – Traffic in Transit , Ukraine believes that a panel may interpret Article XXI(b) 
of the GATT 1994 and review the reliance on this provision. It means that Article XXI(b) of the 
GATT  1994 is justiciable in th e same manner as any other provision of the WTO covered agreements.  
3. The Panel in Russia – Traffic in Transit  found that the obligation of good faith requires that 
Members not use the exceptions of Article XXI as a means to circumvent their obligations unde r the 
GATT 1994.1 
4. Therefore, Ukraine insists that WTO Members in any case must indicate their essential 
security interests if they use security exceptions to justify their actions. This can also be confirmed 
by the fact that the Panel in Russia – Traffic in Transit  found that it follows from the Panel 's 
interpretation of Article XXI(b) of the GATT 1994, as vesting in panels the power to review whether 
the requirements of the enumerated subparagraphs are met, rather than leaving it to the unfettered 
discret ion of the invoking Member, that Article XXI(b) of the GATT 1994 is not totally "self-judging ".2 
5. In Ukraine 's view, a panel has to examine whether (i) the interests or reasons advanced by 
a defendant for imposing the measures fall within the scope of the phrase "its essential security 
interests "; and whether (ii) the measures are directed at safeguarding a defen dant Member 's 
security interests, meaning that there is a rational relationship between the action taken and the 
protection of the essential security interest at issue.  
6. Due to the exceptional features of the disputes involving the "security exceptions " 
provisions, Ukraine notes that it is important that the Panel considers each invocation carefully, in 
light of the particular circumstances of the dispute before it.  
3. CLAIMS REGARDING ARTICLES 2(C) AND 2(D) OF THE ARO  
 
7. This dispute raises issues on certain measures concerning the origin marking requirement 
introduced by the United States to goods manufactured or produced within the customs territory of 
Hong Kong, China.  
8. According to Hong Kong, China, the measures of the United States pursuant to whic h goods 
manufactured or processed within the customs territory of Hong Kong, China, must be marked as 
originated within the People 's Republic of China ( "PRC"), a different WTO Member.  
9. The claims of Hong Kong, China, that the United States has reached this erroneous 
determination for political reasons unrelated to a proper determination of the country of origin of 
the goods.3 
 
1 Panel Report, Russia – Traffic in Transit,  para. 7.133.  
2 Ibid, para. 7.102.  
3 First Written Submission by Hong Kong, China, para . 5. WT/DS597/R/Add.1  
 
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  10. In accordance with Article 2(c) of the ARO rules of origin shall not themselves create 
restrictive, distorting, or disruptive effects  on international trade. They shall not pose unduly strict 
requirements or require the fulfilment of a certain condition not related to manufacturing or 
processing, as a prerequisite for the determination of the country of origin.  
11. In its First Written Subm ission Hong Kong, China, also challenges the non -compliance of the 
United States ' measures with Article 2(d) of the ARO. From the point of view of Hong Kong, China, 
the United States therefore "discriminate[s] between other Members " in respect of the rules  of origin 
that the United States applies to imports, in contravention of Article 2(d) of the ARO.4 
12. In accordance with Article 2(d)  of the ARO  Members shall ensure that  the rules of origin that 
they apply to imports and exports are not more stringent than the rules of origin they apply to 
determine whether or not a good is domestic and shall not discriminate between other Members, 
irrespective of the affiliation of the m anufacturers of the good concerned.  
13. Therefore, the Panel should carefully analyze the nature of the United States ' measures and 
determine whether alleged by Hong Kong, China, measures are in line with Article 2(d) of the ARO.  
 
__________  
 
4 First Written Submission by Hong Kong, China , para. 48.