UNITED STATES – CERTAIN MEASURES ON STEEL AND ALUMINIUM PRODUCTS REPORT OF THE PANEL
Document: Appendices This supplement contains Appendices A and B to the Report of the Panel to be found in document WT/DS544/R.
Date: 9 December 2022
Document codes: WT/DS544/R/Suppl.1; WT/DS544/R.
Complainant: China
Respondent: U.S.
Third parties: Bahrain, Brazil, Canada, Colombia, Egypt, EU, Guatemala, Hong Kong, Iceland, India, Indonesia, Japan, Kazakhstan, Malaysia, Mexico, New Zealand, Norway, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Switzerland, Taiwan, Thailand, Turkey, Ukraine, UAE, Venezuela
Dispute stage: Panel
Agreements cited: Art. XIX:1, XIX:2  GATT 1994Art. 2.1, 2.2, 4.1, 4.2, 5.1, 7, 11.1(a), 12.1, 12.2, 12.3  SafeguardsArt. II:1(a), II:1(b), I:1, X:3(a)  GATT 1994

UNITED STATES – CERTAIN MEASURES ON STEEL AND ALUMINIUM
PRODUCTS
REPORT OF THE PANEL
Appendices
This supplement contains Appendices A and B to the Report of the Panel to be found in document

APPENDIX A: MATERIALS SUBMITTED BY THE PARTIES ON URUGUAY ROUND
NEGOTIATIONS OF THE AGREEMENT ON SAFEGUARDS
EXHIBITS REFERRED TO IN APPENDIX A
Panel Exhibit Short Title Title
USA-190 Draft Final Act Embodying
the Results of the Uruguay
Round
(20 December 1991)
Trade Negotiations Committee, Draft Final Act Embodying
The Results of the Uruguay Round of Multilateral Trade
Negotiations (20 December 1991), MTN.TNC/W/FA
USA-215 June 1989 draft text Negotiating Group on Safeguards, Draft Text by the
Chairman (27 June 1989), MTN.GNG/NG9/W/25
USA-216 January 1990 draft text Negotiating Group on Safeguards, Draft Text by the
Chairman (15 January 1990), MTN.GNG/NG9/W/25/Rev.1
USA-217 July 1990 draft text Negotiating Group on Safeguards, Chairman's Report on
Status of Work in the Negotiating Group (13 July 1990),
MTN.GNG/NG9/W/25/Rev.2
USA-220 October 1990 draft text Negotiating Group on Safeguards, Draft Text of an
Agreement (31 October 1990), MTN.GNG/NG9/W/25/Rev.3

1 INTRODUCTION
1.1. The parties in this dispute have referred to various materials from the Uruguay Round of
negotiations to support their interpretations of Article 11.1(c) of the Agreement on Safeguards. The
Panel recalls its conclusions in section 7.7.2 of the Panel Report based on the interp retation of
Article 11.1(c) of the Agreement on Safeguards according to customary rules of interpretation of
public international law, including Articles 31 and 33 of the Vienna Convention. The Panel does not
consider that its interpretive conclusions regarding Article 11.1(c) of the Agreement on Safeguards
leave the meaning of that provision ambiguous or obscure, nor does the Panel find that they lead to
a result which is manifestly absurd or unreasonable. The Panel also notes the parties' agreement
that recourse to supplementary means of interpretation under Article 32 of the Vienna Convention
only serves to confirm the meaning of Article 11.1(c) of the Agreement on Safeguards as determined
through the application of Article 31 of the Vienna Convention.1
1.2. The Panel will therefore examine the documents submitted as the negotiating history of
Article 11.1(c) of the Agreement on Safeguards to confirm the meaning of the terms of that
provision. The Panel will begin by providing an overview of the materials sub mitted by the parties
as the negotiating history of Article 11.1(c) and their arguments in relation to these materials,
followed by an assessment of the contents of these materials in relation to the interpretive issues
raised in this dispute.
2 ARGUMENTS AND MATERIALS SUBMITTED BY PARTIES
2.1 June 1989 draft text
2.1. In the context of the multilateral trade negotiations of the Uruguay Round, the Chairperson of
the Negotiating Group on Safeguards circulated several draft texts for an agreement on safeguards.
A draft text issued on 27 June 1989 provided in relevant part:
4. A contracting party [or a customs union] may apply safeguard measures to a product
being imported into its territory, only in a situation in which other GATT provisions do
not provide specific remedies (e.g. Articles VI, XVI or XXVIII), and on the conditions
that: …2
2.2 January 1990 draft text
2.2. A revised draft, circulated on 15 January 1990, removed the references to "Articles VI, XVI
or XXVIII" in paragraph 4 of the June 1989 draft text as follows:
4. A contracting party [or a customs union] may apply a safeguard measure to a product
being imported into its territory only in a situation in which other provisions of the
General Agreement do not provide specific remedies and on the conditions that: …3
2.3 July 1990 draft text
2.3. Negotiations continued on the basis of draft texts by the Chairperson, who issued a new draft
on 13 July 1990 "indicating the general trend of discussion of the Negotiatin g Group".4 Unlike the
draft texts of June 1989 and January 1990, this draft did not stipulate that safeguard measures
could only be applied in the absence of "specific remedies" under other GATT provisions. Instead,

1 See e.g. United States' responses to Panel question No. 97; China's responses to Panel question
No. 97.
2 June 1989 draft text, (Exhibit USA-215), p. 1. The "conditions" under this draft provision were: (a) "an
unforeseen, sharp and substantial increase in the quantity of such product being imported"; (b) a
determination by "competent national authorities" that "such increase is causing serious injury to domestic
producers of like or directly competitive products"; and (c) "the measures are applied to products from all
sources".
3 January 1990 draft text, (Exhibit USA-216), p. 1. This draft included revised wording of the
"conditions" regarding the increase of imports and the determination by competent authorities of serious injury
caused to domestic producers, while moving the provision on application to products from all sources to
another paragraph.
4 July 1990 draft text, (Exhibit USA-217), p. 1.

Section I of this draft set out certain "General" provisions in two paragraphs, where paragraph 1
defined what "a safeguard measure shall be understood to mean"5 and paragraph 2 stated:
2. The provisions of paragraph 1 above do not prejudice the rights and obligations of
contracting parties re garding trade -restrictive measures taken in conformity with
specific provisions of the General Agreement other than Article XIX, protocols, and
agreements and arrangements negotiated under the auspices of GATT.6
2.4 October 1990 draft text
2.4. A revised draft text, accepted as "a working paper for the very final phase of the negotiations"
of an agreement on safeguards, was circulated on 31 October 1990 to represent the level of
agreement reached in the Negotiating Group on Safeguards at that stage.7 The "General" section of
this draft contained a single paragraph, stating that "[t]his agreement establishes rules for the
application of safeguard measures". 8 In Section VII titled "Prohibition and Elimination of Certain
Measures", the draft contained the following bracketed text:
24. No trade-restrictive measure shall be sought or taken by a contracting party unless
it conforms with the provisions of Article XIX as interpreted by the provisions of this
agreement, or is consistent with other provisions of the General Agreement, or protocols
and agreements or arrangements concluded within the framework of the General
Agreement. These include actions taken by a single contracting party as well as actions
under agreements, arrangements and understandings entered into by two or more
contracting parties. Any such measure in effect at the time of entry into force of this
agreement shall either be brought into conformity with the provisions of Article XIX and
this agreement or phased out in accordance with paragraph 25 below.9
2.5 Draft Final Act Embodying the Results of the Uruguay Round (20 December 1991)
2.5. On 20 December 1991, the Chairperson of the Trade Negotiations Committee tabled the "Draft
Final Act" embodying the results of the Uruguay Round of negotiations, including a draft agreement
on safeguards, with the understanding that this " offer[ed] a concrete and comprehensive
representation of the final global package of the results of the Uruguay Round ".10 Section VI of the
draft agreement on safeguards addressed "Prohibition and Elimination of Certain Measures" and
divided paragraph 24 of the October 1990 draft text into three parts as follows:
22. (a) A contracting party shall not take or seek any emergency action on imports of
particular products as set forth in Article XIX unless such action conforms with the
provisions of Article XIX of the General Agreement applied in accordance with this
agreement.
(b) Furthermore, a contracting party shall not seek, take or maintain any voluntary
export restraints, orderly marketing arrangements or any other similar measures on the
export or the import side.[1],[2] These include actions taken by a single contracting party
as well as actions under agreements, arrangements and understandings entered into
by two or more contracting parties. Any such measure in effect at the time of entry into
force of this agreement shall be brought into conformity with this provision or phased
out, in accordance with paragraph 23 below.
(c) Measures sought, taken or maintained by a contracting pa rty pursuant to other
provisions of the General Agreement, or protocols and agreements or arrangements

5 July 1990 draft text, (Exhibit USA-217), p. 3.
6 July 1990 draft text, (Exhibit USA-217), p. 3.
7 October 1990 draft text, (Exhibit USA-220), p. 1.
8 October 1990 draft text, (Exhibit USA-220), p. 3.
9 October 1990 draft text, (Exhibit USA-220), p. 9.
10 Draft Final Act Embodying the Results of the Uruguay Round (20 December 1991), (Exhibit USA-190).

concluded within the framework of the General Agreement are not included in the scope
of this agreement.11
1 An import quota applied as a safeguard measure in conformity with the relevant provisions of
the General Agreement may, by mutual agreement, be administered by the exporting contracting
party.
2 Examples of similar measures include export moderation, export-price or import-price
monitoring systems, export or import surveillance, compulsory import cartels and discretionary
export or import licensing schemes, any of which afford protection.

2.6 Arguments by the parties
2.6. According to the United States, while early draft texts of the Agreement on Safeguards would
have limited the right to apply a safeguard measure to situations in which certain other provisions
of the GATT 1994 were not available12, negotiators subsequently abandoned this approach to make
clear that the proposed agreement would not prejudice a Member's ability to take action pursuant
to GATT provisions other than Article XIX.13
2.7. In this regard, the United States refers to the October 1990 draft text and the use of the word
"or" in paragraph 24 of that draft. For the United States, this confirms that Members could seek or
take trade-restrictive measures that were "either in conformity with Article XIX or consistent with
other provisions of the General Agreement (including Article XXI)" and that " the availability of
Article XIX as a release from obligations does not constrain a Member's ability to take action pursuant
to other provisions of the GATT 1994".14
2.8. The United States also advances several arguments in relation to the Draft Final Act embodying
the results of the Uruguay Round . The United States notes that the text that would become
Article 11.1(c) was revised in this draft to explicitly refer to the scope of "this agreement" and was
moved so that it appeared after the text that would become Article 11.1(b).15 The United States
considers these two changes to indicate that the entire Agreement on Safeguards, including
Article 11.1(b), is subject to Article 11.1(c).16 The United States further considers relevant that the
language in the Draft Final Act stating that measures sought, taken, or maintained pursuant to other
GATT provisions "are not included in the scope of" the proposed agreement on safeguards was
replaced in the final text of Article 11.1(c) with a "more definite statement" that the Agreement on
Safeguards "does not a pply" to such measures. The United States maintains that in this way, the
final text makes even clearer that a Member's ability to seek, take, or maintain safeguard measures
does not constrain a Member's ability to take such action pursuant to other provis ions of the
GATT 1994, such as Article XXI.17
2.9. Regarding the terms "pursuant to" in Article 11.1(c), the United States notes that the Draft
Final Act changed the references in the October 1990 draft text to "measures … consistent with other
provisions of the General Agreement" and in the July 1990 draft to measures "taken in conformity
with specific provisions of the General Agreement". For the United States, by referring instead to
measures sought, taken, or maintained "pursuant to" other GATT provisions, the Draft Final Act
underscores that the Agreement on Safeguards does not apply to measures that a Member "has
tried to do, succeeded in doing or caused to continue in accordance with provisions of the GATT 1994
other than Article XIX".18

11 Draft Final Act Embodying the Results of the Uruguay Round (20 December 1991), (Exhibit USA-190),
pp. M.6-M.7.
12 United States' response to Panel question No. 94. See also United States' second written submission,
paras. 213-214.
13 United States' second written submission, paras. 215-216 (referring to July 1990 draft text, (Exhibit
USA-217)).
14 United States' second written submission, para. 218. (emphasis original)
15 United States' response to Panel question No. 94 (further noting that in earlier drafts of the
Agreement on Safeguards, the provision that would become Article 11.1(b) was placed after the text that
would become Article 11.1(c) in the final Agreement).
16 United States' response to Panel question No. 94 (also arguing that by placing the reference to "This
Agreement" at the beginning of Article 11.1(c) in the Agreement on Safeguards, the final text of this
Agreement makes even clearer that the text of Article 11.1(c) applies to the entire Agreement on Safeguards).
17 United States' second written submission, paras. 221-222.
18 United States' response to Panel question No. 97.

2.10. China does not perceive any basis for the Panel to have recourse to supplementary means for
the interpretation of Article 11.1(c), arguing that "the general rule of interpretation under Article 31
does not leave the meaning of the relevant provisions ambiguo us or obscure, or lead to a result
which is manifestly absurd or unreasonable". China further contends that nothing in the negotiating
history of what ultimately became the "pursuant to" language in Article 11.1(c) of the Agreement
on Safeguards suggests t hat this language was meant to give Members the unilateral ability to
remove from the scope of that agreement a measure that is "objectively a safeguard measure".
According to China, the drafting history of Article 11.1(c) only reflects the drafters' recognition that
there are a variety of trade-restrictive measures that a Member may take under the GATT 1994, in
derogation of obligations that otherwise would apply, and that the Agreement on Safeguards would
not apply to measures other than those that Member s are required to take in accordance with
Article XIX and the Agreement on Safeguards.19
3 ASSESSMENT BY THE PANEL
3.1. Based on the parties' arguments and the relevant interpretive issues in this dispute, the Panel
will begin by reviewing the evolution of the t ext that became Article 11.1(c) of the Agreement on
Safeguards and its relation to the other draft provisions of the Agreement on Safeguards. The Panel
will then review the language used in various draft texts of the Agreement on Safeguards
corresponding to the terms "pursuant to" and "other than" in the final text of Article 11.1(c) of that
agreement. Finally, the Panel will make some concluding observations on the parties' arguments
concerning other paragraphs of the draft texts considered in this Appendi x as well as additional
materials submitted as the negotiating history of Article XIX of the GATT 1994 and the Agreement
on Safeguards.
3.2. Early draft texts for an agreement on safeguards did not contain explicit references to the
inapplicability of the propo sed agreement to certain measures. Nevertheless, negotiators
acknowledged the rights and obligations of contracting parties provided in other GATT provisions. In
this regard, the June 1989 and the January 1990 draft texts recognized certain "specific remedies"
provided in "other provisions of the General Agreement" .20 Notably, the July 1990 draft stipulated
that the provision of that draft text on wh at "a safeguard measure shall be understood to mean"
would " not prejudice the rights and obligations of contracting parties regarding trade -restrictive
measures taken in conformity with specific provisions of the General Agreement other than
Article XIX".21 These documents indicate that the proposed agreement on safeguards was intended
to preserve "specific remedies" or "trade -restrictive measures" available to Members under other
GATT provisions.
3.3. Subsequent draft texts similarly reflect the intention that the rights of the contracting parties
under other GATT provisions be preserved as part of the establishment of safeguard disciplines. In
the draft text of October 1990, the corresponding provision to Article 11.1(c) of the Agreement on
Safeguards was fram ed as a prohibition of " trade-restrictive measure [s]" with two exceptions:
measures that "conform[] with the provisions of Article XIX as interpreted by the provisions of this
agreement [on safeguards]" or measures that were "consistent with other provisions of the General
Agreement".22 In this manner, the draft text of October 1990 recogni zed that contracting parties
were permitted to seek or take trade -restrictive measures consistent with GATT provisions other
than Article XIX, notwithstanding the disciplines of an agreement on safeguards. The Draft Final Act
embodying the result of the Uruguay Round of negotiations reaffirmed this by explicitly setting out
the scope of the proposed agreement on safeguards. In addition to noting that the proposed
agreement "establishes rules for the application of safeguard measures", the Draft Final Act provided
that measures sought, taken or maintained pursuant to "other provisions of the General Agreement"
were "not included in the scope of [that] agreement".23
3.4. The Panel finds this negotiating history to confirm that the Agreement on Safeguards does not
preclude measures "pursuant to provisions of GATT 1994 other than Article XIX" and Article 11.1(c)

19 China's response to Panel question No. 97.
20 January 1990 draft text, (Exhibit USA-216), p. 1. See also June 1989 draft text, (Exhibit USA-215), p.
1 (referring to "specific remedies" provided in "other GATT provisions").
21 July 1990 draft text, (Exhibit USA-217), p. 3. (emphasis added)
22 October 1990 draft text, (Exhibit USA-220), p. 9.
23 Draft Final Act Embodying the Results of the Uruguay Round (20 December 1991), (Exhibit USA-190),
p. M.7. (emphasis added)

removes such measures from the scope of application of the Agreement.24 The Panel further notes
that none of the draft texts discussed above contained provisions limiting or otherwise subordinating
the provision that became Article 11.1(c) to other parts of the draft texts that became Articles
11.1(a) and 11.1(b) of the Agreement on Safeguards . Accordingly, the negotiating history of the
Agreement on Safeguards supports the Panel's inte rpretation that Article 11.1(c) governs the
inapplicability of the Agreement on Safeguards as a whole, including the rules specified in
Article 11.1(a) and the prohibition under Article 11.1(b).25
3.5. Regarding the terms "pursuant to" in Article 11.1(c) of the Agreement on Safeguards, the Panel
observes that early drafts of the Agreement on Safeguards contained references to measures that
were "taken in conformity with" provisions of the GATT 1994 other than Article XIX and measures
that were "consistent with" such other provisions. However, these references were not retained in
subsequent draft texts. In particular, in the Draft Final Act embodying the results of the Uruguay
Round, negotiators agreed to exclude measures that were " pursuant to other provisions o f the
General Agreement" from the scope of the proposed agreement on safeguards. 26 The fact that
negotiators deleted draft language requiring conformity or consistency from the provision in the
Draft Final Act corresponding to Article 11.1(c) supports the Panel's conclusion that the terms
"pursuant to" in Article 11.1(c) do not denote a standard of consistency with provisions of the
GATT 1994 other than Article XIX.
3.6. The evolution of the provision that became Article 11.1(a) of the Agreement on Safeguards
confirms this understanding. In the draft text of October 1990, the corresponding provision referred
to trade-restrictive measures that "conform[] with the provisions of Article XIX as interpreted by the
provisions of this agreement".27 This explicit reference to conformity was retained in the Draft Final
Act of the Uruguay Round negotiations, which precluded "emergency action on imports of particular
products as set forth in Article XIX unless such action conforms with the provisions of Article XIX of
the General Agreement applied in accordance with this agreement". 28 Thus, negotiators retained
terms from the early draft texts of Article 11.1(a) expressing a requirement of consistency or
conformity in the Draft Final Act of the Uruguay Round. 29 By contrast, similar terms from the early
draft texts of Article 11.1(c) were deleted and replaced with the phrase "pursuant to" in the Draft
Final Act of the Uruguay Round. This contrast provides further support for the Panel's conclusions
regarding the meaning of "pursuant to" in Article 11.1(c).
3.7. Regarding the terms "other than" in Article 11.1(c), the Panel notes that the draft texts
discussed above use the formulations " other GATT provisions "30, "other provisions of the General
Agreement"31, and "specific provisions of the General Agreement other than Article XIX".32 The Panel

24 The parties to this dispute have also advanced arguments relating to communications from certain
countries during the Uruguay Round of negotiations regarding the proposed agreement on safeguards. (See
United States' response to Panel question No. 81; closing statement at the second meeting of the Panel,
para. 42). The Panel observes that these communications aim to set out the views of certain countries on the
scope of issues that should be discussed in the Negotiating Group on Safeguards. The Panel also notes that
these communications do not indicate a shared understanding by all negotiators on the scope of the proposed
agreement on safeguards or the meaning of its terms. The Panel therefore does not consider it necessary to
further examine the content of these communications to confirm its interpretation of the terms of
Article 11.1(c).
25 The Panel notes that the placement of the various draft texts of Article 11.1(c) changed in the course
of negotiations. The Panel does not consider the placement of these draft provisions in itself to be
determinative of the function of Article 11.1(c) or its relation to draft texts of Articles 11.1(a) and 11.1(b).
26 Draft Final Act Embodying the Results of the Uruguay Round (20 December 1991), (Exhibit USA-190),
p. M.7 (emphasis added).
27 October 1990 draft text, (Exhibit USA-220), p. 9.
28 Draft Final Act Embodying the Results of the Uruguay Round (20 December 1991), (Exhibit USA-190),
p. M.6. (emphasis added)
29 The Panel also notes the requirement in early draft texts to bring certain measures in effect at the
time of entry into force of the proposed agreement on safeguards into "conformity" with the provisions of
Article XIX of the GATT and that agreement. The wording of this requirement was retained in paragraph 22(b)
of the Draft Final Act, which later became Article 11.1(b) of the Agreement on Safeguards. (See October 1990
draft text, (Exhibit USA-220), p. 9; Draft Final Act Embodying the Results of the Uruguay Round
(20 December 1991), (Exhibit USA-190), p. M.7).
30 June 1989 draft text, (Exhibit USA-215), p. 1.
31 January 1990 draft text, (Exhibit USA-216), p. 1; October 1990 draft text, (Exhibit USA-220), p. 9;
and Draft Final Act Embodying the Results of the Uruguay Round (20 December 1991), (Exhibit USA-190), p.
M.7.
32 July 1990 draft text, (Exhibit USA-217), p. 3.

does not find these various formulations to provide additional clarity as to the ordinary meaning of
the terms "other than" in the context of Article 11.1(c). Nor does the Panel find these draft texts to
indicate an intention to impose a qualification with re spect to being "other than Article XIX" in
Article 11.1(c). The Panel notes that early draft texts of the Agreement on Safeguards contained
references to "specific remedies" in "other GATT provisions"33 and "specific provisions of the General
Agreement other than Article XIX".34 The Panel does not consider that the word "specific" in these
draft texts in itself indicates an additional requirement or limitation of being exclusively pursuant to
another GATT provision, and in any event, this word was removed f rom subsequent draft texts of
Article 11.1(c) of the Agreement on Safeguards. 35 Accordingly, the analysis of these draft texts
confirms, or at least does not undermine, the Panel's conclusion that the terms "other than" in
Article 11.1(c) do not impose an additional requirement or limitation of being exclusively pursuant
to another provision.
3.8. In their submissions on the negotiating history of Article XIX of the GATT 1994 and the
Agreement on Safeguards, the parties also discuss other paragraphs of the draft texts considered in
this Appendix and certain additional materials.36 The Panel notes that the parties' arguments in this
regard do not relate to Article 11.1(c) of the Agreement on Safeguards. Rather, the parties discuss
these materials in relation to their arguments on the "condition precedent" for the right to take
action under Article XIX of the GATT 1994, "invocation" of Article XIX of the GATT 1994, and
measures within the scope of Article 11.1(b) of the Agreement on Safeguards. As d iscussed in
section 7.7.2 of the Panel Report, the Panel focuses its assessment on the terms of Article 11.1(c)
of the Agreement on Safeguards and, in particular, the meaning of the terms "pursuant to" and
"other than" in that provision. Accordingly, the Panel does not find it necessary for the purposes of
this dispute to address the parties' arguments in relation to other paragraphs of the draft texts
considered in this Appendix and the additional materials submitted as the negotiating history of
Article XIX of the GATT 1994 and the Agreement on Safeguards.
3.9. Based on the foregoing, the Panel finds that the negotiating history of Article 11.1(c) of the
Agreement on Safeguards confirms the Panel's interpretation of that provision according to Articles
31 and 33 of the Vienna Convention.
Uruguay Round (20 December 1991), (Exhibit USA-190), p. M.7.
36 See United States' response to Panel question Nos. 18, 19 and 97; second written submission,
sections IV.A.5 and IV.B.4.a; and opening statement at the second meeting of the Panel, para. 23. See also
China's response to Panel question No. 97.

APPENDIX B: MATERIALS SUBMITTED BY THE PARTIES ON THE INTERPRETATION OF
ARTICLE XXI OF THE GATT 1994
EXHIBITS REFERRED TO IN APPENDIX B
Exhibit
Number
Short title (if applicable) Long title
USA-24 -- GATT CONTRACTING PARTIES, Third Session, Agenda
(Revised 8 April 1949), GATT/CP.3/2/Rev.2
USA-25 Statement by the Head of the
Czechoslovak Delegation
GATT CONTRACTING PARTIES, Third Session, Statement by
the Head of the Czechoslovak Delegation (30 May 1949),
GATT/CP.3/33
USA-26 -- GATT CONTRACTING PARTIES, Third Session, Reply by the
Vice Chairman of the US Delegation (2 June 1949),
GATT/CP.3/38
USA-27 Summary of the meeting of the
GATT CONTRACTING PARTIES
(8 June 1949)
GATT CONTRACTING PARTIES, Third Session, Summary of
the twenty-second meeting (8 June 1949),
GATT/CP.3/SR.22
USA-28 -- GATT, Basic Instruments and Selected Documents, Volume
II (Decisions, Declarations, Resolutions, Rulings and
Reports), May 1952
USA-31 Report of the First Session of
the Preparatory Committee
United Nations Conference on Trade and Development,
Report of the First Session of the Preparatory Committee
(31 October 1946), E/PC/T/33
USA-32 -- United Nations Economic and Social Council, Preparatory
Committee of the International Conference on Trade and
Employment, Committee II, Technical Subcommittee,
Second meeting (21 October 1946), E/PC/T/C.II/W.5
USA-33 Report of the Drafting
Committee of the Preparatory
Committee
United Nations Economic and Social Council, Report of the
Drafting Committee of the Preparatory Committee of the
United Nations Conference on Trade and Employment
(5 March 1947), E/PC/T/34
USA-34 May 1947 Proposal by the US
Delegation
United Nations Economic and Social Council, Second Session
of the Preparatory Committee of the United Nations
Conference on Trade and Employment, Proposal by the US
Delegation (6 May 1947), E/PC/T/W/23
USA-35 -- United Nations Economic and Social Council, Second Session
of the Preparatory Committee of the United Nations
Conference on Trade and Employment, Proposal by the US
Delegation (4 July 1947), E/PC/T/W/236
USA-36 -- United Nations Economic and Social Council, Second Session
of the Preparatory Committee of the United Nations
Conference on Trade and Employment, Report of the
Committee on Chapters I, II and VIII (31 July 1947),
E/PC/T/139
USA-37 Report of the Second Session of
the Preparatory Committee
United Nations Economic and Social Council, Report of the
Second Session of the Preparatory Committee of the United
Nations Conference on Trade and Employment
(19 August 1947), E/PC/T/180
USA-38 Draft General Agreement on
Tariffs and Trade
United Nations Economic and Social Council, Second Session
of the Preparatory Committee of the United Nations
Conference on Trade and Employment, (Draft) General
Agreement on Tariffs and Trade (30 August 1947),
E/PC/T/189
USA-39 An Informal Summary of the
ITO Charter
United Nations Conference on Trade and Employment, An
Informal Summary of the ITO Charter (21 November 1947),
E/CONF.2/INF.8
USA-41 Report of the 24 July 1947
Meeting
United Nations Economic and Social Council, Second Session
of the Preparatory Committee of the United Nations
Conference on Trade and Employment, Report of the Thirty-
Third Meeting of Commission A (24 July 1947),
E/PC/T/A/PV/33
USA-42 Report of the Working Party of
Sub-Committee G of Committee
VI (Organization) on Chapter
VIII
United Nations Conference on Trade and Employment,
Report of the Working Party of Sub-Committee G of
Committee VI (Organization) on Chapter VIII
(9 January 1948), E/CONF.2/C.6/W.30

Exhibit
Number
Short title (if applicable) Long title
USA-43 Third Meeting of the Sub-
Committee on Chapter VIII
(Settlement of Differences –
Interpretation) of Committee VI
(Organization)
United Nations Conference on Trade and Employment,
Summary Record of the Third Meeting of the Sub-
Committee on Chapter VIII (Settlement of Differences –
Interpretation) of Committee VI (Organization)
(13 January 1948), E/CONF.2/C.6/W.41
USA-44 Amendment to Article 94
proposed by the UK Delegation
United Nations Conference on Trade and Employment, Sub-
Committee I of Committee VI (Organization), Amendment
to Article 94 proposed by the UK Delegation
(16 January 1948), E/CONF.2/C.6/W.48
USA-45 United Nations Conference on
Trade and Employment, Final
Act and Related Documents
United Nations Conference on Trade and Employment, Final
Act and Related Documents (April 1948)
USA-46 United Nations Conference on
Trade and Employment, Sub-
Committee I (Article 94) of
Committee VI (Organization),
Notes of the Eight Meeting
United Nations Conference on Trade and Employment, Sub-
Committee I (Article 94) of Committee VI (Organization),
Notes of the Eight Meeting, E/CONF.2/C.6/W.123
(1 March 1948)
USA-47 United Nations Conference on
Trade and Employment, Sub-
Committee I (Article 94) of
Committee VI (Organization),
Notes of the Fourth Meeting
United Nations Conference on Trade and Employment, Sub-
Committee I (Article 94) of Committee VI (Organization),
Notes of the Fourth Meeting, E/CONF.2/C.6/W.60
(17 January 1948)
USA-48 US Delegation, Minutes of the
Delegation Meeting
(2 July 1947)
US Delegation, Second Meeting of the United Nations
Preparatory Committee for the International Conference on
Trade and Employment, Minutes of the Delegation Meeting
(2 July 1947)
USA-49 US Delegation, Memorandum of
Mr Rubin
US Delegation, Second Meeting of the United Nations
Conference on Trade and Development, Memorandum of
Seymour J. Rubin (14 July 1947)
USA-52 US Department of State,
Memorandum of Conversation
on "Security Exceptions to
proposed ITO Charter"
US Department of State, Memorandum of Conversation on
"Security Exceptions to proposed ITO Charter"
(17 June 1946)
USA-53 -- US Delegation, Economic Disarmament (Draft)
USA-54 US Delegation, Letter from Mr
Coppock to Mr Wilcox
US Delegation, Letter dated 3 July 1946 from Mr Coppock to
Mr Wilcox on "National Security Provisions in the Draft
Charter"
USA-56 US Delegation, Minutes of the
Delegation Meeting
(4 July 1947)
US Delegation, Second Meeting of the United Nations
Preparatory Committee for the International Conference on
Trade and Employment, Minutes of the Delegation Meeting
(4 July 1947)
USA-57 Summary of the meeting of the
GATT CONTRACTING PARTIES
(9 December 1961)
GATT CONTRACTING PARTIES, Nineteenth Session,
Summary Record of the Twelfth Session
(9 December 1961), SR.19/12
USA-58 Working Party Report on
Accession of the United Arab
Republic
GATT CONTRACTING PARTIES, Twenty-Sixth Session,
Report by the Working Party on Accession of the United
Arab Republic (25 February 1979), L/3362
USA-59 GATT Council, Minutes of the
Meeting (7 May 1982)
GATT Council, Minutes of the Meeting (7 May 1982),
C/M/157
USA-60 Communication of the
European Communities,
Australia, and Canada to GATT
contracting parties (4 May 1982)
European Communities, Australia, and Canada, "Trade
Restrictions Affecting Argentina Applied for Non-Economic
Reasons" (Revision), Communication to GATT contracting
parties (4 May 1982), L/5319/Rev.1
USA-61 GATT Council, Minutes of the
Meeting (29-30 June 1982)
GATT Council, Minutes of the Meeting (29-30 June 1982),
C/M/159
USA-62 -- GATT CONTRACTING PARTIES, Decision Concerning
Article XXI of the General Agreement (30 November 1982),
L/5426
USA-63 GATT Council, Minutes of the
Meeting (29 May 1985)
GATT Council, Minutes of the Meeting (29 May 1985),
C/M/188
USA-64 GATT Council, Minutes of the
Meeting (12 March 1986)
GATT Council, Minutes of the Meeting (12 March 1986),
C/M/196
USA-65 -- GATT Panel Report, United States – Trade Measures
Affecting Nicaragua
USA-66 GATT Council, Minutes of the
Meeting (5-6 November 1986)
GATT Council, Minutes of the Meeting (5-6 November 1986),
C/M/204

Exhibit
Number
Short title (if applicable) Long title
USA-90 -- GATT CONTRACTING PARTIES, Second Session, Rules of
Procedure for Sessions of the CONTRACTING PARTIES (As
adopted on 16 August 1948), GATT/CP.2/3 Rev.1
USA-91 -- GATT CONTRACTING PARTIES, Rules of Procedure for
Sessions of the CONTRACTING PARTIES
(6 September 1949), GATT/CP/30
USA-92 Corrigendum to Report of the
24 July 1947 Meeting
United Nations Economic and Social Council, Second Session
of the Preparatory Committee of the United Nations
Conference on Trade and Employment, Corrigendum to
Verbatim Report of Thirty-Third Meeting of Commission A
(30 July 1947), E/PC/T/A/PV/33.Corr.3
USA-150 Article XXI Proposal by
Nicaragua
Negotiating Group on GATT Articles, Article XXI Proposal by
Nicaragua (28 June 1988), MTN.GNG/NG7/W/48
USA-151 Communication from Argentina Negotiating Group on GATT Articles, Communication from
Argentina (4 February 1988), MTN.GNG/NG7/W/44
USA-152 -- Negotiating Group on GATT Articles, Communication from
Nicaragua (10 November 1987), MTN.GNG/NG7/W/34
USA-153 Negotiating Group on GATT
Articles, Note on Meeting of 27-
30 June 1988
Negotiating Group on GATT Articles, Note on Meeting of 27-
30 June 1988, MTN.GNG/NG7/8
USA-181 -- The Treaty of Rome
USA-183 -- Group of Negotiations on Services, Communication from
Switzerland – Draft General Agreement on Trade in Services
(7 June 1990), MTN.GNS/W/102
USA-184 Communication from Brazil,
Chile, Colombia, Cuba,
Honduras, Jamaica, Nicaragua,
Mexico, Peru, Trinidad and
Tobago and Uruguay – Structure
of a Multilateral Framework for
Trade in Services
Group of Negotiations on Services, Communication from
Brazil, Chile, Colombia, Cuba, Honduras, Jamaica,
Nicaragua, Mexico, Peru, Trinidad and Tobago and Uruguay
– Structure of a Multilateral Framework for Trade in Services
(26 February 1990), MTN.GNS/W/95
USA-185 Communication from the
United States – Agreement on
Trade in Services
Group of Negotiations on Services, Communication from the
United States – Agreement on Trade in Services
(17 October 1989), MTN.GNS/W/75
USA-186 Communication from the
European Communities – Draft
General Agreement on Trade in
Services
Group of Negotiations on Services, Communication from the
European Communities – Draft General Agreement on Trade
in Services (18 June 1990), MTN.GNS/W/105
USA-187 -- Group of Negotiations on Services, Communication from
Japan – Draft General Agreement on Trade in Services
(10 July 1990), MTN.GNS/W/107
USA-188 Group of Negotiations on
Services, Draft Multilateral
Framework for Trade in Services
(23 July 1990)
Group of Negotiations on Services, Draft Multilateral
Framework for Trade in Services (23 July 1990),
MTN.GNS/35
USA-189 -- Trade Negotiations Committee, Draft Final Act Embodying
the Results of the Uruguay Round of Multilateral Trade
Negotiations (Revision) (3 December 1990),
MTN.TNC/W/35/Rev.1
USA-190 Draft Final Act Embodying the
Results of the Uruguay Round
(20 December 1991)
Trade Negotiations Committee, Draft Final Act Embodying
the Results of the Uruguay Round of Multilateral Trade
Negotiations (20 December 1991), MTN.TNC/W/FA
USA-191 Draft Text of the
TRIPS Agreement
Negotiating Group on Trade-Related Aspects of Intellectual
Property Rights, including Trade in Counterfeit Goods,
Status of Work in the Negotiating Group – Chairman's
Report to the GNG (23 July 1990), MTN.GNG/NG11/W/76
USA-192 Communication from Nicaragua Negotiating Group on Dispute Settlement, Communication
from Nicaragua (3 November 1987), MTN.GNG/NG13/W/15
USA-193 -- Negotiating Group on Dispute Settlement, Meeting of
20 November 1987 – Note by the Secretariat,
MTN.GNG/NG13/5
USA-194 Negotiating Group on Dispute
Settlement, Meeting of
20 November 1987 – Note by
the Secretariat (Addendum)
Negotiating Group on Dispute Settlement, Meeting of
20 November 1987 – Note by the Secretariat (Addendum),
MTN.GNG/NG13/5/Add.1
USA-195 -- Negotiating Group on Dispute Settlement, Meeting of
25 June 1987 – Note by the Secretariat, MTN.GNG/NG13/2

Exhibit
Number
Short title (if applicable) Long title
USA-196 -- Negotiating Group on Dispute Settlement, Meeting of
11 July 1988 – Note by the Secretariat, MTN.GNG/NG13/9
USA-197 Israel – United States
Agreement on the Establishment
of a Free Trade Area
Agreement on the Establishment of a Free Trade Area
between the Government of Israel and the Government of
the United States of America
USA-221 EEA Agreement Agreement on the European Economic Area (EEA)

1 INTRODUCTION
1.1. The parties have referred to various materials to support or to confirm their interpretation of
the terms of Article XXI of the GATT 1994. Much of this material relates to the negotiations of
Article XXI of the GATT 1947, which remained unaltered in wording in the GATT 1994, as well as
various views and decisions of the contracting parties under the GATT 1947. At the outset, the Panel
notes that the relevant treaty provision for the purposes of its interpretive analysis is Article XXI of
the GATT 1994, an agreement that "is legally distinct from" the GATT 1947.1 The Panel also notes
that the materials submitted by the parties may be of interpretive relevance to Article XXI of the
GATT 1994 under the following legal bases: (i) Article XVI:1 of the WTO Agreement; (ii) paragraph
1(b)(iv) of the GATT 1994; (iii) Article 31(3) of the Vienna Convention; and (iv) Article 32 of the
Vienna Convention.2
1.2. Pursuant to Article XVI:1 of the WTO Agreement, except as otherwise provided in that
Agreement or in the Multilateral Trade Agreements, the WTO "shall be guided by the decisions,
procedures and customary practices followed by the CONTRACTING PARTIES to the GATT 1947 and
the bodies established in the framework of GATT 1947". Paragraph 1(b)(iv) of the GATT 1994
stipulates that "other decisions of the CONTRACTING PARTIES to the GATT 1947" are incorporated
into the GATT 1994. Article 31(3)(a) and (b) of the Vienna Convention establish that, when
interpreting a treaty, there shall be "taken into account", together with the context: "any subsequent
agreement between the parties regarding the interpretation of the treaty or the application of its
provisions"; and "any subsequent practice in the application of the treaty which establishes the
agreement of the parties regarding its interp retation". In addition, Article 32 of the
Vienna Convention allows recourse to supplementary means of interpretation to confirm the meaning
resulting from the application of Article 31 of the Vienna Convention or to determine the meaning
when the interpretation under Article 31 either leaves the meaning ambiguous or obscure or leads
to a result that is manifestly absurd or unreasonable.
1.3. In this Appendix, the Panel addresses the parties' arguments on the various materials
submitted in relation to the interpretation of Article XXI of the GATT 1994. The Panel will first review
materials from the negotiations of the GATT 1947 and the International Trade Organization (ITO)
Charter until the conclusion of the GATT 1947 (section 2). The Panel will then review materials from
the ITO Charter negotiations that took place after the conclusion of the GATT 1947 (section 3). The
Panel will next examine certain internal documents of the US delegation at the ITO/ GATT 1947
negotiations (section 4). Thereafter, the Panel will examine two decisions (sections 5 and 6) and
views expressed on various occasions by the GATT contracting parties (section 7). Finally, the Panel
will review the parties' arguments on materials from the Uruguay Round of negotiations (section 8).
1.4. In each of the following sections, the Panel will first provide an overview of the arguments and
the materials submitted by the parties. The Panel will then address the possible interpretive
relevance of such materials to Article XXI of the GATT 1994 before assessing the content of the
materials in relation to the interpretation of Article XXI of the GATT 1994.
2 NEGOTIATIONS OF THE ITO CHARTER AND THE GATT 1947
2.1 Arguments and materials submitted by the parties
2.1. The United States argues that the negotiat ing history of the GATT 1947 may constitute the
historical background against which the GATT 1994 was negotiated, and can therefore be relevant
for the purposes of interpreting provisions of the GATT 1994, including Article XXI.3 The
United States further emphasizes that the text of Article XXI remained unchanged when the

1 Article II:4 of the WTO Agreement. The text of the GATT 1947 was finalized in October 1947 and the
agreement was applied from 1 January 1948 on a provisional basis. The Havana Charter creating the ITO never
entered into force and the GATT 1947 continued to be provisionally applied until one year after the entry into
force of the WTO Agreement and the GATT 1994.
2 The Panel notes that the parties have not identified any other legal basis under which the submitted
materials may be relevant for the purposes of the interpretation of Article XXI of the GATT 1994. (See the
parties' responses to Panel question No. 24).
3 United States' first written submission, para. 56.

provision was incorporated in the GATT 1994 during the Uruguay Round, even if negotiators were
presented with the possibility of amending the language.4
2.2. China does not formally object to the use of the negotiating record of the GATT 1947.5
2.1.1 October 1946 proposal
2.3. In October 1946, the United States submitted a proposal for a draft text of the ITO Charter
that included the following two exceptions provisions:
Article 32 (General Exceptions to Chapter IV)
Nothing in Chapter IV of this Charter shall be construed to prevent the adoption or
enforcement by any Member of measures …
(c) relating to fissionable materials;
(d) relating to the traffic in arms, ammunition and implements of war and to such traffic
in other goods and materials as is carried on for the purpose of supplying a military
establishment;
(e) in time of war or other emergency in international relations, relating to the
protection of the essential security interests of a Member.

Article 49.2 ( Exceptions to Provisions Relating to Intergovernmental Commodity
Agreements)
None of the foregoing provisions of Chapter VI is to be interpreted as applying to
agreements relating to fissionable materials; to the traffic in arms, ammunition and
implements of war and to such traffic in other goods and materials as is carried on for
the purpose of supplying a military establishment; or, in time of war or other emergency
in international relations, to the protection of the essential security int erests of a
Member.6
2.4. The United States notes that the two proposed exceptions dealing with essential security
interests were not explicitly self -judging in their initial formulation, emphasi zing that this proposal
did not include the phrase "it considers necessary", which features instead in the final text of
Article XXI of the GATT 1947.7
2.5. China does not specifically comment on this document.
2.1.2 March 1947 draft text
2.6. A report of the Drafting Co mmittee of the Preparatory Committee of the United Nations
Conference on Trade and Employment, dated 5 March 1947, contained a draft general exceptions

4 United States' second written submission, para. 45.
5 China's response to Panel question No. 57.
6 United Nations Conference on Trade and Development, Report of the First Session of the Preparatory
Committee (31 October 1946), E/PC/T/33, (Exhibit USA-31), Annexure 11 (United States Draft Charter), pp.
60 and 63.
7 United States' first written submission, para. 59. The United States also refers to a statement that a
delegate of the United States made in October 1946 in the context of a meeting of the Preparatory Committee
of the International Conference on Trade and Employment (Committee II – Technical Subcommittee).
Responding to the concerns raised by another delegation on the scope of the draft provision on freedom of
transit, the delegate of the United States "pointed out that Article 32(e) afforded complete opportunity for the
adoption of all measures regarded as necessary for the protection of national interests in time of war or other
national emergency". (United Nations Economic and Social Council, Preparatory Committee of the International
Conference on Trade and Employment, Committee II, Technical Subcommittee, Second meeting
(21 October 1946), E/PC/T/C.II/W.5, (Exhibit USA-32), p. 11)

provision reproduced with the same text both in the GATT (Article XX) as well as in the draft text of
the ITO Charter (Article 37). The text of the draft provision read, in relevant part:
Article 37 (General exceptions to chapter V) and Article XX (General exceptions)
Subject to the requirement that such measures are not applied in a manner which would
constitute a means of arbitrary or unjustifiable discrimination between countries where
the same conditions prevail, or a disguised restriction on international trade, nothing in
this Agreement shall be construed to prevent the adoption or enforcement by any
contracting party of measures: …
(c) Relating to fissionable materials;
(d) Relating to the traffic in arms, ammunition and implements of war and to such traffic
in other goods and materials as is carried on for the purpose of supplying a military
establishment;
(e) In time of war or other emergency in international relations, relating to the
protection of the essential security interests of a contracting party.8
2.7. The United States notes that the security exceptions were placed alongside several
subparagraphs identical to those that would later feature in the text of Article XX of the GATT 1947.9
Furthermore, the United States points out that the security exceptions were subject to a proviso
with language similar to that of the chapeau of Article XX of the GATT 1994 as it currently stands.10
According to the United States, this structure and, specifically, the presence of the chapeau suggest
that, at the time of the draft, not all delegations viewed the security exceptions as "self-judging".11
2.8. China does not specifically comment on this document.12
2.1.3 May 1947 proposal
2.9. In May 1947, the United States proposed several amendments to the draft text of the ITO
Charter, including a proposal to move the security exceptions from being part of a broader provision
on "general exceptions" to featuring as a standalone provision at the end of the Charter. 13 The
proposed text submitted by the United States read, in relevant part:
Nothing in this Charter shall be construed to prevent the adoption or enforcement by
any Member of measures: …

8 United States' first written submission, para. 60; United Nations Economic and Social Council, Report
of the Drafting Committee of the Preparatory Committee of the United Nations Conference on Trade and
Employment (5 March 1947), E/PC/T/34, (Exhibit USA-33), pp. 31 and 77. Similarly, Article 59 of the draft text
of the ITO Charter at that time (Exceptions to provisions relating to intergovernmental commodity
arrangements) read:
The provisions of Chapter VII shall not apply: …
(c) to arrangements relating to fissionable materials, to the traffic in arms, ammunition and
implements of war and to such traffic in other goods and materials as is carried on for the
purpose of supplying a military establishment, or in the time of war or other emergency in
international relations, to the protection of the essential security interests of a Member. (Report
of the Drafting Committee of the Preparatory Committee, (Exhibit USA-33), pp. 43-44).
9 United States' first written submission, para. 61.
10 United States' first written submission, para. 61.
11 United States' first written submission, para. 61.
12 The European Union, in its third-party submission, disagrees with the United States on the
significance of subjecting the security exceptions to a proviso akin to the language of the chapeau of Article XX
of the GATT 1994. According to the European Union, a chapeau is not a necessary element for an exception to
be justiciable, and several exceptions in the covered agreements, although not containing a chapeau à la
Article XX of the GATT 1994, are nevertheless "justiciable" and are thus subject to panels' review when invoked
in disputes. (See European Union's third-party submission, para. 84 (referring to Articles XIV.1 and XXIV of the
GATT 1994)).
13 United States' first written submission, para. 62; United Nations Economic and Social Council, Second
Session of the Preparatory Committee of the United Nations Conference on Trade and Employment, Proposal
by the US Delegation (6 May 1947), E/PC/T/W/23, (Exhibit USA-34), p. 5.

(c) Relating to fissionable materials;
(d) Relating to the traffic in arms, ammunition and implements of war and to such traffic
in other goods and materials as is carried on for the purpose of supplying a military
establishment;
(e) In tim e of war or other emergency in international relations, relating to the
protection of the essential security interests of a contracting party.14
2.10. The United States notes that, under the proposed amendment, security exceptions would be
formally separated from other exceptions and would apply to the entire ITO Charter as opposed to
a specific chapter thereof.15
2.11. China does not specifically comment on this document.
2.1.4 4 July 1947 proposal
2.12. On 4 July 1947, the United States proposed the addition of a new chapter at the end of the
draft text of the ITO Charter ("Miscellaneous"). The United States suggested the inclusion of the
security exceptions provision in the new chapter, and proposed the following amendments to the
previously circulated versions of the provision:
Article 94 (General Exceptions)
Nothing in this Charter shall be construed to require any Member to furnish any
information the disclosure of which it considers contrary to its essential security
interests, or to prevent any Member from taking any action which it may consider to be
necessary to such interests:
a) Relating to fissionable materials or their source materials;
b) Relating to the traffic in arms, ammunition and implements of war and to such traffic
in other goods and materials as is carried on for the purpose of supplying a military
establishment;
c) In time of war or other emergency in international relations, relating to the protection
of its essential security interests;
d) Undertaken in pursuance of obligations under the United Nations Charter for the
maintenance of international peace and security.16
2.13. The United States notes that this was the first time that the text of the provision on security
exceptions contained a reference to actions that an ITO member might "consider" necessary relating
to the protection of its essential security interests.17 In the United States' view, the text as modified
explicitly indicated that the provision could be invoked based on an ITO member's own judgment.18
Furthermore, the United States submits that this reformulation marked a distinction between the
"self-judging" nature of exceptions pertaining to security matters and exceptions related to the
protection of other interests.19
2.14. China does not specifically comment on this document.20

14 May 1947 Proposal by the US Delegation, (Exhibit USA-34), p. 5.
15 United States' first written submission, para. 62.
16 United Nations Economic and Social Council, Second Session of the Preparatory Committee of the
United Nations Conference on Trade and Employment, Proposal by the US Delegation (4 July 1947),
E/PC/T/W/236, (Exhibit USA-35), p. 13.
17 United States' first written submission, para. 64.
18 United States' first written submission, para. 64.
19 United States' first written submission, para. 64.
20 In its third-party submission, the European Union argues that the inclusion of language such as "it
may consider necessary" does not demonstrate anything further on the proper interpretation of those words,

2.1.5 24 July 1947 meeting
2.15. The parties have referred to exchanges between delegates at a meeting of Commission A
(Second Session of the Preparatory Committee of the United Nations Conference on Trade and
Employment) that took place on 24 July 1947.21
2.16. During this meeting, the delegate of the Netherlands requested clarification on the scope of
the security exceptions in relation to the meaning of "emergency in international relations" and
"essential security interests" in the draft provision.22 The delegate of the Netherlands further raised
the concern that an exception based on "essential security interests" could be "possibly a very big
loophole in the whole Charter".23
2.17. The delegate of the United States took the floor to respond to these quest ions as the draft
provision in question originated in a proposal by the United States. The delegate of the United States
expressed recognition of "a great danger of having too wide an exception" that "would permit
anything under the sun" if the provision simply referred to "measures relating to a Member's security
interests".24 The same delegate stated the desire to "draft provisions which would take care of real
security interests and, at the same time, so far as we could, to limit the exception so as to p revent
the adoption of protection for maintaining industries under every conceivable circumstance".25
2.18. The delegate of the United States commented in relation to the expression "in time of war"
that "the limitation … is primarily in the time" of the actions taken by an ITO member. The delegate
of the United States added that "no one would question the need of a Member, or the right of a
Member, to take action relating to its security interests in time of war and to determine for itself …
what its security interests are."26 Regarding the terms "other emergency in international relations",
the delegate of the United States explained that "we had in mind particularly the situation which
existed before" the participation of the United States in the Second World War.27 Specifically, the
delegate of the United States referred to measures that the United States took at that time "for [its]
own protection" and that would have been prohibited by the Charter. 28 The delegate of the
United States concluded the intervention by affirming the need for some "latitude" for security
measures while maintaining a "balance":
It is really a question of a balance. We have got to have some exceptions. We cannot
make it too tight, because we cannot prohibit measures which are needed purely for
security reasons. On the other hand, we cannot make it so broad that, under the guise
of security, countries will put on measures which really have a commercial purpose.29

nor does it show that the provision is self-judging and that WTO panels are precluded from objectively
assessing the invocation of Article XXI by a party in a dispute. (See European Union's third-party submission,
para. 86).
21 The Second Session of the Preparatory Committee of the United Nations Conference on Trade and
Employment was divided into two commissions, each consisting of representatives of all delegations.
Commission A and its sub-committees worked on texts relating to the chapters on Employment and Economic
Activity, Economic Development and General Commercial Policy. All the drafts were submitted for review at
final plenary meetings of the Preparatory Committee. (See United Nations Economic and Social Council, Report
of the Second Session of the Preparatory Committee of the United Nations Conference on Trade and
Employment (19 August 1947), E/PC/T/180 (Exhibit USA-37), p. vi, fn 1).
22 United Nations Economic and Social Council, Second Session of the Preparatory Committee of the
United Nations Conference on Trade and Employment, Report of the Thirty-Third Meeting of Commission A
(24 July 1947), E/PC/T/A/PV/33, (Exhibit USA-41), p. 19.
23 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 19.
24 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 20.
25 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 20; United Nations Economic and Social
Council, Second Session of the Preparatory Committee of the United Nations Conference on Trade and
Employment, Corrigendum to Verbatim Report of Thirty-Third Meeting of Commission A (30 July 1947),
E/PC/T/A/PV/33.Corr.3, (Exhibit USA-92).
26 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 20; Corrigendum to Report of the
24 July 1947 Meeting, (Exhibit USA-92).
27 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 20.
28 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 20.
29 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 21.

2.19. The Chairperson intervened next and stated "in defence of the text" that "the atmosphere
inside the ITO will be the only efficient guarantee against abuses of the kind to which the Netherlands
Delegate has drawn our attention".30
2.20. Subsequently at the meeting, the Chairperson posed the question of whether "transferring
these items from Article 37 to the end of the Charter" would mean that "these clauses should not
provide for any possibility of redress", including under Article 35 of the draft text on consultations
and nullification or impairment. 31 The delegate of the United States took the floor to express the
view that the place of a provision in the Charter had "nothing to do" with the applicability of Article 35
of the draft text 32, which at that time provided recourse if "any other Member is applying any
measure, whether or not it conflicts with the terms of the Charter, or that any situation exists, which
has the effect of nullifying or impairing any object of this Charter".33
2.21. In the view of the delegate of the United States, Article 35 was "very broad in its terms", and
"probably cover[ed] any action taken by a Member under any provision of the Charter". 34 The
delegate of the United States further stated that an action taken under the security exceptions "could
not be challenged in the sense that it could not be claimed that the Member was violating the
Charter", but there was still a possibility for that action, even if not in conflict with the terms of
Article 94, to affect another ITO member. 35 The delegate of the United States thus noted that, in
those circumstances, the affected ITO member "would have the right to seek redress under
Article 35" of the draft text of th e ITO Charter.36 The delegate of the United States concluded the
intervention noting that "there [was] no exception from the application of Article 35 to [Article 94]
or any other Article".37 The delegate of Australia intervened next to confirm that its de legation was
reassured about the confirmation that, "at any rate", ITO members would still have the right to seek
redress under Article 35(2) for actions justified under Article 94.38 Following some additional
discussion of the applicability of Article 35 to the proposed security exceptions 39, the Chairperson
concluded the discussions noting that the Committee had considered and approved the draft of
Article 94.40
2.22. In this dispute, the United States argues that this exchange demonstrates that the drafters
understood that "essential security measures" could not be challenged as violating obligations in the
underlying agreement. 41 According to the United States, the debate further shows th at an ITO
member affected by such measures could claim that its expected benefits under the Charter had
been nullified or impaired as foreseen in Article 35(2).42 Applied to the WTO context, the
United States argues that the discussion indicates that essential security interests measures cannot

30 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 21.
31 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 26.
32 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 26.
33 Report of the Drafting Committee of the Preparatory Committee, (Exhibit USA-33), p. 30.
34 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 26.
35 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 26.
36 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 27.
37 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 27.
38 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 27. The delegate of Australia also proposed
that a note be inserted in the Report of the Commission saying that it was the unanimous opinion of the
drafters that the text of Article 94 was not in conflict with the ITO members' rights under Article 35(2). The
delegate of the United States responded that, while not objecting to the proposal, the insertion of such a note
would pose questions of interpretation elsewhere in the Charter. According to the delegate of the
United States, Article 35 on consultations and nullification or impairment covered "everything in the Charter".
The delegate of the United States further stated that, in order to prevent the application of Article 35 to
Article 94, the negotiators would need to have "an explicit provision in Article 35 saying that no Member should
bring any complaint in respect of measures taken pursuant to Article 94". However, in the view of the delegate
of the United States, as it was "perfectly clear" from the existing text that Article 35 did apply to the security
exceptions in Article 94, a note emphasizing what was already clear text was not necessary. The delegate of
Australia acknowledged the intervention of the United States and withdrew Australia's reservation. (Ibid. pp.
28-29; see also Corrigendum to Report of the 24 July 1947 Meeting, (Exhibit USA-92), with a corrigendum to
the verbatim report of the discussion).
39 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 29.
40 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 30.
41 United States' first written submission, para. 71.
42 United States' first written submission, para. 71.

be found to be in violation of any provision of the GATT 1994, but could at most be the subject of a
non-violation complaint.43
2.23. China maintains that the exchange clarifies that Article XXI(b) was not meant to "permit
anything under the sun", and that the drafters sought to strike a proper balance between allowing
ITO members to protect their security interests, while at the same time ensuring that protectionist
measures would not be condoned.44
2.24. Certain third parties p rovided their views on the 24 July 1947 meeting. According to the
European Union, the discussion demonstrates that the United States did not intend to draft the
security exceptions as a self -judging provision. The European Union notes that the delegate of the
United States emphasized the existence of objective and testable limits to the scope of the provision.
The European Union also observes that the delegate of the United States was careful to exclude the
applicability of the provision to measures "which really have a commercial purpose". Finally, the
European Union disputes that non -violation complaints were the only available response to the
invocation of the security exceptions.45 In Switzerland's view, the exchanges at the meeting of the
negotiating committee prove that the drafters did not want to have a too broad exception that would
permit "anything under the sun", did not envisage a self-judging security exceptions provision, and
did not intend to subject security measures exclusively to non-violation complaints, as the discussion
reveals that the entirety of Article 35 would be applicable to measures taken pursuant to Article 94
of the draft text of the ITO Charter. 46 Türkiye refers to the exchanges within the negotiating
committee to argue that the United States itself recognized that the security exceptions had limited
scope. Türkiye further maintains that nothing in the negotiations suggests that non -violation
complaints were considered to be the only available remedy.47 Hong Kong, China reads the summary
of the discussion as showing how delegations, including the United States, did not consider
Article XXI(b) to be entirely self -judging or that ITO members' rights of redress in respect of the
exception would be limited.48
2.1.6 31 July 1947 and 19 August 1947 Draft Texts
2.25. A report of the Preparatory Committee of the United Nations Conference on Trade and
Employment, dated 31 July 1947, includes a text of the provision reflecting approval of the
United States' proposed revision:
Article 91* (General Exceptions)
Nothing in this Charter shall be construed to require any Member to furnish any
information the disclosure of which it considers contrary to its essential security
interests, or to prevent any Member from taking any action which it may consider to be
necessary to such interests:
(a) Relating to fissionable materials or their source materials;
(b) Relating to the traffic in arms, ammunition and implements of war and to such traffic
in other goods and materials as is carried on for the purp ose of supplying a military
establishment;
(c) In time of war or other emergency in international relations, relating to the
protection of its essential security interests;

44 China's opening statement at the first meeting of the Panel, para. 39, referring to Report of the
24 July 1947 Meeting, (Exhibit USA-41), p. 20.
45 European Union's third-party submission, paras. 89-98.
46 Switzerland's third-party submission, paras. 69-70.
47 Türkiye's third-party submission, paras. 3.73–3.77.
48 Hong Kong, China's third-party submission, para. 43.

(d) Undertaken in pursuance of obligations under the United Nations Charter for the
maintenance of international peace and security.49
* As approved by Commission A
2.26. A report of the Second Session of the Preparatory Committee of the United Nations Conference
on Trade and Employment dated 19 August 1947 contains a new draft text of the ITO Charter,
including the following text for the security exceptions:
Article 94 (General Exceptions)
Nothing in this Charter shall be construed
(a) to require any Member to furnish any information the disclosure of which it considers
contrary to its essential security interests, or
(b) to prevent any Member from taking any action which it considers necessary for the
protection of its essential security interests
(i) relating to fissionable materials or the materials from which they are
derived;
(ii) relating to the traffic in arms, ammunition and implements of war and
to such traffic in other goods and materials as is carried on directly or
indirectly for the purpose of supplying a military establishment;
(iii) taken in time of war or other emergency in international relations; or
(c) to prevent any Member from taking any action in pursuance of its obligations under
the United Nations Charter for the maintenance of international peace and security.50
2.27. The United States notes that, in this revised text, the lan guage of the security exceptions
changed, in relevant part, from "action which it may consider necessary" to "action which it considers
necessary".51 The United States further notes that the final text of Article XXI of the GATT 1947
reflected this revision to the text of the security exceptions.52
2.28. China does not specifically comment on these documents.
2.1.7 "An Informal Summary of the ITO Charter" (21 November 1947)
2.29. The United States refers to a document entitled "An informal summary of the ITO Charter"
prepared by the Negotiating Group in November 1947. Regarding the security exceptions, the
summary reads:
Members may … do whatever they think necessary to protect their security interests
relating to atomic materials, arms traffic, and wartime or other international
emergencies, and to maintain peace according to their obligations under the United
Nations Charter.53

49 United Nations Economic and Social Council, Second Session of the Preparatory Committee of the
United Nations Conference on Trade and Employment, Report of the Committee on Chapters I, II and VIII
(31 July 1947), E/PC/T/139, (Exhibit USA-36), pp. 25-26.
50 Report of the Second Session of the Preparatory Committee, (Exhibit USA-37), p. 178.
51 United States' first written submission, para. 65.
52 United States' first written submission, para. 65; United Nations Economic and Social Council, Second
Session of the Preparatory Committee of the United Nations Conference on Trade and Employment, (Draft)
General Agreement on Tariffs and Trade (30 August 1947), E/PC/T/189, (Exhibit USA-38), p. 47.
53 United Nations Conference on Trade and Employment, An Informal Summary of the ITO Charter
(21 November 1947), E/CONF.2/INF.8, (Exhibit USA-39), p. 35.

2.30. The United States argues that the summary comments on the self -judging nature of the
provision.54
2.31. China does not specifically comment on this document.
2.2 Assessment by the Panel
2.32. The Panel takes note of the parties' views on the relevance of the negotiating history of the
ITO Charter and the GATT 1947 as supplementary means for the interpretation of the GATT 1994
under Article 32 of the Vienna Convention.
2.33. The supplementary means of interpretation that may be considered under Article 32 of the
Vienna Convention are not exhaus tively defined and may include, but are not limited to, the
preparatory work and the circumstances of the conclusion of the treaty. 55 As noted above, the
relevant treaty provision in this analysis is Article XXI the GATT 1994, an agreement that "is legally
distinct from" the GATT 1947.56 This legal distinction does not preclude recourse to the preparatory
work of the ITO Charter and the GATT 1947 as supplementary means for the interpretation of
corresponding provisions in the GATT 199457, particularly given that the terms of Article XXI of the
GATT 1994 have not been amended compared to their original formulation in the GATT 1947. At the
same time, the Panel is mindful that the ITO Draft Charter and the GATT 1947 were negotiated
against the background of a d ifferent institutional setting compared to the WTO, particularly with
respect to the resolution of disputes. The Panel will factor this consideration into its assessment as
relevant to the contested issues in this dispute regarding the interpretation of Article XXI of the
GATT 1994.
2.34. Under Article 32 of the Vienna Convention, recourse to supplementary means of interpretation
may be had either to confirm the meaning resulting from the application of Article 31, or to
determine the meaning when the interpreta tion according to Article 31 leaves the meaning
ambiguous or obscure or leads to a result which is manifestly absurd or unreasonable. The Panel
does not consider that the application of Article 31 of the Vienna Convention to the interpretation of
Article XXI(b) of the GATT 1994 leaves the meaning of the provision ambiguous or obscure in relation
to the contested interpretive issues in this dispute, nor does the Panel find that it leads to a result
which is manifestly absurd or unreasonable. The Panel also n otes the parties' agreement that any
recourse to supplementary means of interpretation may only serve to confirm the meaning of
Article XXI(b) of the GATT 1994 as determined through the application of Article 31 of the
Vienna Convention.58 The Panel therefore reviews the negotiating history of the ITO Charter and the
GATT 1947 in light of the interpretive conclusions resulting from the application of Article 31 of the
Vienna Convention and the limited purposes under Article 32 of the Vienna Convention for having
recourse to supplementary means of interpretation.
2.35. Based on the parties' arguments and the contested issues in this dispute, the Panel will begin
by reviewing the evolution of the security exceptions provision in terms of its envisag ed scope of
application, the removal of language similar to the chapeau of Article XX of the GATT 1994, and the
inclusion of reference to what a Member "considers" or "may consider" necessary as part of the
provision. The Panel will then review the discuss ion that took place on 24 July 1947 with specific
regard to the positions of the delegations on the limits for the invocation of the security exceptions
and the possibility for ITO members affected by security measures to seek some form of redress.
The Panel will next address the relevance of an informal summary prepared by the Negotiating Group
towards the end of 1947. Finally, the Panel will make some concluding observations on early debates

54 United States' first written submission, para. 65.
55 See Appellate Body Report, EC – Chicken Cuts, para. 283.
57 See Appellate Body Reports, Japan – Alcoholic Beverages II, p. 24, fn 52 (regarding Article III:2 of
the GATT 1947and the Ad note thereto); Canada – Periodicals, p. 34 (regarding Article III:8(b) of the
GATT 1947); US – Line Pipe, para. 175 (regarding Article XIX of the GATT 1947), and Panel Report, Russia –
Traffic in Transit, para. 7.83 (regarding Article XXI of the GATT 1947).
58 While the parties disagree on the meaning of Article XXI(b), they do not consider such disagreement
to be symptomatic of an ambiguity that must be resolved through recourse to supplementary means of
interpretation. (See United States' response to Panel question No. 56; China's response to Panel question
No. 56).

in the negotiations of the ITO Charter concerning the distinctio n between "justiciable" and
"non-justiciable" issues.
2.36. Regarding the scope of application of the security exceptions, draft provisions were originally
included in the general exceptions to the Chapter on general commercial policy in the draft text of
the ITO Charter. Negotiators ultimately agreed that the security exceptions would be moved to the
end of the Charter in a standalone provision applicable to the entire Charter and to the entire
GATT 1947. Notably, the proponent of this amendment indicated its understanding at the time that
the placement of the provision at the end of the Charter would not affect the applicability of the
provisions on consultation and nullification or impairment. 59 The Panel similarly considers that the
placement of the security exceptions does not in itself determine the applicability of provisions on
consultations and nullification or impairment, which is instead a function of the terms of the
exception and the relevant procedures in the event of nullification or impairment.
2.37. The United States draws the Panel's attention to the fact that, in earlier formulations, security
exceptions would have been subject to a proviso akin to the chapeau of Article XX of the GATT 1994
and, by implication, that the removal of the chapeau language was a step towards making the
security exceptions self-judging.60 The Panel does not see the presence or absence of such language
as indicating the intentions of the drafters regarding the review of an invocation of a provision dealing
with "essential security interests". The text of the proviso included in the March 1947 draft does not
refer to review of the invocation of the security exceptions, but rather includes requirements similar
to those under the chapeau of Article XX of the GATT 1994 concerning application of measures in a
manner that would qualify as arbitrary or unjustifiable discrimination, or as a disguised restriction
to trade. The fact that negotiators decided not to include similar requirements in the introductory
language to the security exceptions offers no indication, in and of itself, about the scope and nature
of review that could be conducted in accordance with the specific terms and requirements that were
ultimately included in Article XXI of the GATT 1947. Therefore, the Panel does not find a clear
connection between early proposals to include certain requirements in an introductory proviso and
any consideration that the security exceptions were "self -judging" in the sense argued by the
United States.
2.38. The Panel takes note of the app earance in the security exceptions of terms such as "it may
consider" and "it considers" beginning with a proposal by the United States dated 4 July 1947. The
Panel does not find any explicit indication that these terms establish the entirely "self-judging nature"
of the provision as argued by the United States. The terms "it may consider" (or "it considers" in
later iterations of the text) denote the consideration or judgment of the Member taking action under
the security exceptions. However, the introduct ion and retention of such terms does not in itself,
and without regard to other relevant features and terms of the provision, provide further clarity on
the possible review of an invocation of the security exceptions in Article XXI of the GATT 1994.
2.39. The parties have submitted arguments concerning exchanges that took place at a meeting of
the ITO Negotiating Committee of 24 July 1947. The Panel makes the following observations on
these discussions, specifically concerning the scope of the security exception s and the possible
redress for ITO members affected by measures taken under that exception.
2.40. First, the negotiators agreed that there would be limits for the invocation of the security
exceptions. The Panel refers to the explanation provided at the meeting by the delegate of the
United States on "a great danger of having too wide an exception … that would permit anything
under the sun" and the motivation to "take care of real security interests and, and the same time,
so far as we could, to limit the exception so as to prevent the adoption of protection for maintaining
industries under every conceivable circumstance". 61 This suggests that the proponents of the text
did not consider the security exceptions to be limitless. This statement should be read in the context
of the explanation by the delegate of the United States on the need for "a balance" between providing
ITO members with "latitude" to determine what their security interests are, while limiting the

59 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 26.
60 See para. 2.7 above.
61 See para. 2.17 above. This understanding is also confirmed when considering the observation made
by the delegate of the United States at the meeting that the expression "in time of war" was meant to impose
a limitation concerning primarily the time when an ITO member would be allowed to take action. The delegate
of the United States added that "no one would question the need of a Member, or the right of a Member, to
take action relating to its security interests and to determine for itself … what its security interests are".
(Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 20).

circumstances in which they could invoke the secur ity exceptions.62 Notably, the delegate of the
United States specified that the security exceptions were not meant to be "so broad" to apply to
measures that countries would adopt "under the guise of security, … which really have a commercial
purpose".63 The Panel considers the exchanges at the above -mentioned meeting, and specifically
the concerns raised about the possibility of abuse, as an element against interpreting the provision
as entirely "self-judging" in the sense argued by the United States.
2.41. Second, regarding the possible redress for ITO members affected by measures under the
security exceptions, the Panel notes the Chairperson's statement that, once the ITO was in
operation, the atmosphere inside the Organization would have been "the only eff icient guarantee
against abuses" of the security exceptions. This statement by the Chairperson was offered "[i]n
defence of the text" following the comment of the delegate of the United States on the draft text
preserving a "proper balance" between an exception that is either "too tight" or "broad".64 The Panel
does not understand the Chairperson to have expressed a legal view on the full range of potential
recourse in relation to measures taken under the security exceptions, but rather to have offered a
general consideration on the institutional operation of the ITO based on the specific drafting
questions raised by delegates at the meeting. In fact, further discussion in the meeting focused on
the possibility for ITO members affected by the imposition of security measures to seek some form
of redress, specifically in light of draft Article 35(2) dealing with consultations and nullification or
impairment, which provided as follows:
Article 35 (Consultation – Nullification or impairment)
…
2. If any Member should consider that any other Member is applying any measure,
whether or not it conflicts with the terms of this Charter, or that any situation exists,
which has the effect of nullifying or impairing any object of this Charter, the Member or
Members concerned shall give sympathetic consideration to such written
representations or proposals as may be made with a view to effecting a satisfactory
adjustment of the matter. If no such adjustment can be effected, the matter may be
referred to the Organiza tion, which shall, after investigation, and, if necessary after
consultation with the Economic and Social Council of the United Nations and any
appropriate intergovernmental organizations, make appropriate recommendations; to
the Members concerned. The Org anization, if it considers the case serious enough to
justify such action, may authorize a Member or Members to suspend the application to
any other Member or members of such specified obligations or concessions under this
Chapter as may be appropriate in the circumstances. If such obligations or concessions
are in fact suspended. any affected Member shall then be free, not later than sixty days
after such action is taken, to withdraw from the Organization upon the expiration of
sixty days from the day on w hich written notice of such withdrawal is received by the
Organization.65
2.42. At the time of the meeting in question, the draft text of the ITO Charter did not yet distinguish
between violation, non-violation, and situation complaints as did the final agreed text of Article XXIII
of the GATT 1947. While the discussion confirms the shared understanding among negotiators that
ITO members affected by security measures could submit non -violation complaints, it does not
reveal that non-violation complaints were the only available option to seek redress for the imposition
of security measures. The discussion instead indicates that the security exceptions were not intended
to be shielded from the application of Article 35, irrespective of its position in the draft text of the
ITO Charter. Negotiators explicitly confirmed their understanding that Article 35 would apply to the
entire draft text of the ITO Charter such that the security exceptions would not be excluded from
the scope of application of the provisions on con sultation and nullification or impairment as they
existed at that time. This conclusion is further reinforced by the fact that the provisions on
consultation and nullification or impairment in the ITO Draft Charter and GATT 1947 evolved to

62 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 21; Corrigendum to Report of the
24 July 1947 Meeting, (Exhibit USA-92).
63 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 21.
64 Report of the 24 July 1947 Meeting, (Exhibit USA-41), p. 21.
65 Report of the Drafting Committee of the Preparatory Committee, (Exhibit USA-33), p. 30; see also
Article XIX:2 of the draft text of the GATT 1947 at the time (Ibid. pp. 76-77).

distinguish between violation, non-violation, and situation complaints 66, with no explicit carve -out
from any of these categories for matters arising under the security exceptions.
2.43. The applicability of provisions on consultations and nullification or impairment to matters
arising under the security exceptions is not undermined by the following statement made by the
delegate of the United States at that meeting:
It is true that an action taken by a Member under Article 94 could not be challenged in
the sense that it could n ot be claimed that the Member was violating the Charter; but
if that action, even though not in conflict with the terms of Article 94, should affect
another Member, I should think that that Member would have the right to seek redress
of some kind under Article 35 as it now stands. In other words, there is no exception
from the application of Article 35 to this or any other Article.67
2.44. The Panel understands this statement to clarify that actions taken in conformity with the
provision on security exceptions could not be challenged as being in violation of the draft text of the
ITO Charter, but it would still be possible for ITO members affected by those actions to claim that
their benefits were nullified or impaired. This statement does not clearly address the possibility that
an affected ITO member could claim that an action purportedly taken pursuant to Article 94 did not
meet the requirements laid down in the provision and was thus inconsistent with the draft text of
the ITO Charter. Therefore, while the exch anges at this meeting indicate that ITO members would
retain some form of recourse for matters arising under the security exceptions, they do not reflect
a limitation on the specific procedures or nature of possible review for claims of nullification or
impairment by measures under the security exceptions.
2.45. The Panel further notes the United States' citation of the informal summary prepared in late
1947 by the Negotiating Group of the Preparatory Committee of the United Nations Conference on
Trade and Employment.68 That informal summary reported that, under the security exceptions, ITO
members would be free to do "whatever they think necessary to protect their security interests
relating to atomic materials, arms traffic, and wartime or other international em ergencies, and to
maintain peace according to their obligations under the United Nations Charter". 69 The Panel notes
the informal nature of the document as a relevant factor in assessing the value that it should be
given in the context of an interpretive a nalysis.70 Furthermore, while the summary refers to the
discretion that ITO members would retain to protect their essential security interests, it also refers
to the specific subject matter and circumstances covered by the agreed provision in the ITO Draft
Charter and reflected in the text of the Article XXI of the GATT 1947. The Panel does not consider
this to provide clarity on the possible review of invocations of this provision 71 or that the provision
should be treated as "self-judging" in the sense argued by the United States.
2.46. Finally, the Panel observes that early drafts of the ITO Charter contained references to
"justiciable" issues, but such references were not retained as the negotiations continued. Specifically,
the September 1946 draft text of the ITO Charter foresaw that questions or differences concerning
the interpretation of the Charter could be referred to the ITO Conference (where all ITO members

66 The draft text of the GATT circulated in August 1947 already contained the distinction between
violation, non-violation, and situation complaints. See Article XXI (Nullification or impairment), Draft General
Agreement on Tariffs and Trade, (Exhibit USA-38), pp. 50-51.
67 Report of the 24 July 1947 Meeting, (Exhibit USA-41), pp. 26-27.
68 See para. 2.29 above.
69 See para. 2.29 above.
70 As stated in the foreword of the document, "[t]he purpose of this information paper is to provide for
the non-technical reader a summary of the Draft Charter for an [ITO]" that "attempts to restate in simple
terms the salient features of each Article" with the addition of "[s]hort, informal and unofficial comments … in
order to indicate the relationship between one part of the Charter and another or to suggest some of the
factors which were taken into consideration by the members of the Preparatory Committee during the
formulation of the Draft." Given the limited purpose of the document, the foreword further refers readers to
the "full text of the Draft Charter". (An Informal Summary of the ITO Charter, (Exhibit USA-39), p. ii).
71 Regarding the provisions in Chapter VIII on "Settlement of Differences – Interpretation", the informal
summary refers to "three general stages in the settlement of disputes": "[f]irst, consultation between
members; secondly, reference of the dispute to the ITO; thirdly, reference to the International Court of
Justice". The informal summary observes parenthetically that "the Preparatory Committee gave only a limited
time to the study of this section and that a full re-examination by the World Trade Conference will be
desirable." (An Informal Summary of the ITO Charter, (Exhibit USA-39), p. 34; see also Report of the Second
Session of the Preparatory Committee, (Exhibit USA-37), p. 166).

would be represented). ITO members could seek review by the International Court of Justice (ICJ)
of "any justiciable issue" arising out of an interpretation by the Conference of certain provisions
including those related to security matters.72 The distinction between "justiciable" issues and other
issues was removed in subsequent drafts after having b een commented upon as "untenable" and
"unworkable".73 The debate on "justiciable" issues took place in the context of a draft text that
foresaw a different institutional setting from the one that exists under the WTO covered agreements.
In that context, the distinction between "justiciable" and "non-justiciable" issues was not to preclude
external review but rather concerned which institution would be competent to review the invocation
of certain provisions of the ITO Charter. Furthermore, both the security exceptions and the provisions
on dispute settlement underwent substantial changes in the course of the negotiations leading to
the final texts of the ITO Draft Charter and GATT 1947. The Panel considers these early debates on
"justiciable" issues to underscore the different institutional backdrop of the ITO negotiations as part
of the overall guidance that may be drawn from the negotiations of the ITO Charter and the
GATT 1947 for the interpretive issues in this dispute.
2.47. The Panel does not find support in these materials for the "self -judging nature" of
Article XXI(b) of the GATT 1994 as contended by the United States. Accordingly, the analysis of
these materials confirms, or at least does not undermine, the Panel's interpretation of Article XXI(b)
of the GATT 1994.
3 NEGOTIATIONS OF THE ITO CHARTER IN 1948
3.1 Arguments and materials submitted by the parties
3.1. The United States has submitted materials pertaining to negotiations of the ITO Charter that
took place in early 1948, thus after the text of the GATT 1947 was finalized and started being
provisionally applied.74 In submitting these materials, the United States argues that views expressed
by the negotiators, including after the conclusion of an agreement, may provide "pertinent evidence
of the intention of the parties", particularly as the GATT 1947 discussions were integral to the
negotiations of the ITO Charter.75
3.2. China does not provide arguments in relation to this set of materials submitted by the
United States.
3.1.1 9 January 1948 – Report of Working Party of Sub-Committee G of Committee VI on
Chapter VIII (Settlement of Differences – Interpretation)
3.3. The United States refers to a report of a Working Party composed of four delegations (Australia,
India, Mexico, and the United States) dated 9 January 1948.76 The Working Party considered several
suggested alternatives and agreed unanimously on new texts for Articles 89 (Consultation between
Members) and 90(4) (Reference to the Organization).
3.4. The newly suggested text of Article 89 retained a distinction between three cases where an
ITO member could seek redress if it considered that the benefits accruing to it under the Charter
were being nullified or impaired: (a) the failure of another member to carry out its obligations; (b)
the application by another member of any measure, whether or not it conflicted with the provisions
of the Charter; (c) the existence of any other situation.77

72 Report of the First Session of the Preparatory Committee, (Exhibit USA-31), Annexure 11
(United States Draft Charter), Article 76, p. 67.
73 Report of the Drafting Committee of the Preparatory Committee, (Exhibit USA-33), "General
Comments" to Article 86, p. 51.
74 United States' first written submission, para. 72.
75 United States' first written submission, para. 72 and fn 70.
76 United States' first written submission, paras. 73-74 (referring to United Nations Conference on Trade
and Employment, Report of the Working Party of Sub-Committee G of Committee VI (Organization) on Chapter
VIII (9 January 1948), E/CONF.2/C.6/W.30, (Exhibit USA-42), p. 2). The Working Party was established within
Sub-Committee G of Committee VI on Chapter VIII.
77 The suggested text of Article 89 read:
If any Member should consider that any benefit accruing to it directly or indirectly, implicitly or
explicitly under any of the provisions of this Charter other than Article 1 is being nullified or

3.5. The document submitted by the United States includes an explanation of the reasons leading
to the agreement between the four participants to the Working Group:
After extensive discussion of sub-paragraph (b) of Article 89 it was decided to allow this
sub-paragraph to remain as is in the Geneva text. The working party considered that
this sub-paragraph would apply to the situation of action taken by a Member such as
action pursuant to Article 94 of the Charter. Such action, for example, in the interest of
national security in time of war or other international emergency would be entirely
consistent with the Charter, but might nevertheless result in the nullification or
impairment of benefits accruing to other Members. Such other Members should, under
those circumstances, have the right to bring the matter before the Organization, not on
the ground that the measure taken was inconsistent with the Charter, but on the ground
that the measure so taken effectively nullified benefits accruing to th e complaining
Member.78
3.6. According to the United States, this excerpt reflects the intention of the parties that measures
taken purportedly pursuant to the security exceptions could be subject to non -violation claims, to
the exclusion of claims of inconsist ency.79 Specifically, the United States argues that this excerpt
confirms that, even after a distinction was introduced between violation and non -violation claims,
the drafters continued to believe that non-violation claims would be the only available reco urse for
ITO members affected by the imposition of security measures.80
3.7. China does not specifically comment on this document.
3.1.2 13 January 1948 – Meeting of Sixth Committee: Organization, Sub -Committee on
Chapter VIII (Settlement of Differences – Interpretation)
3.8. At a meeting of the sub -committee dealing with the chapter on settlement of differences and
interpretation, "[f]ive representatives agreed with the Chairman that action of the type mentioned
in Article 94 [i.e., the security exceptions prov ision] could not be challenged by recourse to the
procedures of Chapter VIII". 81 According to this view, "[h]owever, any Member which considered
that any benefit accruing to it being nullified or impaired as specified in Article 89 might invoke the
procedures of Chapter VIII in order that compensatory measures might be permitted". 82 The
representative of the United Kingdom stated that his delegation intended to propose an amendment
to Article 94 that would clarify the relationship between the national secur ity exceptions and the
potential recourse for affected ITO members.83 Two other representatives expressed doubts on the
opinion given by the Chairperson.84 The delegations eventually agreed to leave the question of the

impaired, [or that the attainment of any of the objectives set forth in Article 1 is being impeded],
as a result of
(a) the failure of another Member to carry out [its] an obligation[s] under this Charter, or
(b) the application "by another Member of any measure, whether or not it conflicts with the
provisions of the Charter, or
(c) the existence of any other situation[,] the Member may … discussions undertaken. (emphasis
original)
(See Report of the Working Party of Sub-Committee G of Committee VI (Organization) on Chapter VIII,
(Exhibit USA-42), p. 1)
78 Report of the Working Party of Sub-Committee G of Committee VI (Organization) on Chapter VIII,
(Exhibit USA-42), p. 2.
79 United States' first written submission, para. 74.
80 United States' response to Panel question No. 59.
81 United States' first written submission, para. 75; United Nations Conference on Trade and
Employment, Summary Record of the Third Meeting of the Sub-Committee on Chapter VIII (Settlement of
Differences – Interpretation) of Committee VI (Organization) (13 January 1948), E/CONF.2/C.6/W.41, (Exhibit
USA-43), p. 1.
82 United States' first written submission, para. 75; Third Meeting of the Sub-Committee on Chapter VIII
(Settlement of Differences – Interpretation) of Committee VI (Organization), (Exhibit USA-43), p. 1.
83 Third Meeting of the Sub-Committee on Chapter VIII (Settlement of Differences – Interpretation) of
Committee VI (Organization), (Exhibit USA-43), p. 1.
84 Third Meeting of the Sub-Committee on Chapter VIII (Settlement of Differences – Interpretation) of
Committee VI (Organization), (Exhibit USA-43), p. 1.

relationship between Article 94 and the rules on settlement of differences in Chapter VIII for further
consideration later.85
3.9. The United States argues that the views expressed at this meeting, like those in the Working
Party report discussed in the previous section, confirm the understanding that non -violation
complaints were intended to be the only available form of redress for invocations of the national
security exceptions.86
3.10. China does not specifically comment on this document.
3.1.3 16 January 1948 – Amendment to Article 94 proposed by the UK Delegation
3.11. The United Kingdom proposed the following amendment to the text of the security exceptions:
Article 94 – General Exceptions
Nothing in this Charter shall be construed: …
(b) to prevent any Member, either singly or with other Members, from taking any action
which it considers necessary for the protection of its essential security interests; where
such action
(i) relates to fissionable materials or the materials from which they are derived;
(ii) relates to the traffic in arms, ammunition and implements of war and to such traffic
in other goods and materials as is carried on directly or indirectly for the purpose of
supplying a military establishment of the Member or of any other country;
(iii) is taken, in time of war or other emergency in international relations … [.]87
3.12. This amendment was adopted and is reflected in the final text of the ITO Draft Charter.88
3.13. The United Kingdom also proposed the introduction of the following subparagraph 1(d) to the
text of the security exceptions:
Nothing in this Charter shall be construed: …
(d) to prevent a Member from taking any action in connection with any matter which
has been brought before the United Nations in accordance with the provisions of
Article 10, 11, or 14 of Chapter IV of the Char ter of the United Nations, provided that
the matter relates to the maintenance of peace and security or to the avoidance of
political friction between States, or in accordance with the provisions of Chapter VI of
the United Nations Charter.89
3.14. This proposed amendment was not adopted.
3.15. The United Kingdom finally proposed to add the following paragraph 2 to the text of the
security exceptions:
If any action taken by a Member under paragraph 1 of this Article nullifies or impairs
any benefit accruing to another Member directly or indirectly the procedure set forth in

85 Third Meeting of the Sub-Committee on Chapter VIII (Settlement of Differences – Interpretation) of
Committee VI (Organization), (Exhibit USA-43), p. 1.
86 United States' first written submission, para. 75.
87 United States' first written submission, para. 76 and fn 77; United Nations Conference on Trade and
Employment, Sub-Committee I of Committee VI (Organization), Amendment to Article 94 proposed by the UK
Delegation (16 January 1948), E/CONF.2/C.6/W.48, (Exhibit USA-44), p. 1.
88 United States' first written submission, fn 77; United Nations Conference on Trade and Employment,
Final Act and Related Documents (April 1948), (Exhibit USA-45), pp. 92-93.
89 Amendment to Article 94 proposed by the UK Delegation, (Exhibit USA-44), pp. 1-2.

Chapter VIII of this Charter shall apply and the Organization may authorize such other
Member to suspend the application to the Member taking action of such obligations or
concessions under or pursua nt to this Charter as the Conference deems appropriate;
provided that where the action is taken under paragraph 1(d) of this Article the
procedure set forth in Chapter VIII of this Charter shall not apply until the United Nations
has made recommendations on or otherwise disposed of the matter.90
3.16. This proposed amendment was not adopted.
3.17. According to the United States, the proposed paragraph 2, although "unnecessary" in light of
the existing text, would have made "more explicit" the understanding that security actions could not
be reviewed for their consistency with the Charter, but only for the nullification or impairment
caused.91
3.18. China does not specifically comment on this document.
3.1.4 17 January 1948 – Meeting of Sub -Committee I ( Article 94), Sixth Committee :
Organization
3.19. On 17 January 1948, a meeting of Sub -Committee I ( Article 94) of the Sixth Committee
(Organization) was held to discuss, inter alia , the proposal tabled by the United Kingdom. The
sub-committee provisionally agreed to the revised text of paragraphs 1(a) and (b).92
3.20. With regard to the United Kingdom's proposal of a new subparagraph 1(d), the representative
of Czechoslovakia argued that, if those matters were to be discussed further, the question of
including that sort of language should be ref erred to the United Nations Security Council. 93 The
delegate of India suggested that the language of the proposed subparagraph 1(d) be modified in
order to qualify the word "action" as "relating to the subject matter covered by the present Charter",
thus distinguishing "economic" actions from "political or military" ones.94 The representative of India
doubted that the taking of economic action could be regarded as necessarily infringing Article 2 of
the United Nations Charter.95
3.21. Regarding the proposal for a paragraph 2, the representative of the United States commented
in a preliminary manner that that it was "unnecessary" to have the first five lines of the proposed
new text of the paragraph, as they would have been a repetition of paragraph (b) of Article 89
concerning non -violation claims. 96 The delegate of the United States also expressed some
reservations regarding the expression "until the United Nations has … otherwise disposed of the

90 Amendment to Article 94 proposed by the UK Delegation, (Exhibit USA-44), p. 2.
91 United States' first written submission, para. 77.
92 The revised text read:
Nothing in this Charter shall be construed
(a) to require a Member to furnish any information the disclosure of which it considers contrary
to its essential security interests; or
(b) to prevent a Member from taking, either singly or with other states, any action which it
considers necessary for the protection of its essential security interests (…)
(See United Nations Conference on Trade and Employment, Sub-Committee I (Article 94) of Committee
VI (Organization), Notes of the Fourth Meeting, E/CONF.2/C.6/W.60 (17 January 1948), (Exhibit USA-47), p.
1).
93 United Nations Conference on Trade and Employment, Sub-Committee I (Article 94) of Committee VI
(Organization), Notes of the Fourth Meeting, (Exhibit USA-47), p. 2.
94 United Nations Conference on Trade and Employment, Sub-Committee I (Article 94) of Committee VI
(Organization), Notes of the Fourth Meeting, (Exhibit USA-47), p. 2.
95 United Nations Conference on Trade and Employment, Sub-Committee I (Article 94) of Committee VI
(Organization), Notes of the Fourth Meeting, (Exhibit USA-47), p. 2.
96 The delegate of the United States referred to the following portion of the proposed new paragraph 2:
"If any action taken by a Member under paragraph 1 of this Article nullifies or impairs any benefit accruing to
another Member directly or indirectly the procedure set forth in Chapter VIII of this Charter shall apply and the
Organization may authorize such other Member to suspend the application to the Member taking action of such
obligations or concessions under or pursuant to this Charter as the Conference deems appropriate".

matter", as it might have been difficult to determine when the Unite d Nations had "otherwise
disposed of" a matter.97
3.22. The representative of the United Kingdom noted that he could agree to having the applicability
of the provisions on dispute settlement in Articles 89 and 90 written into the record of the discussion
rather than incorporated in the text of the security exce ptions in Article 94.98 He further observed
that the proviso suggested in the proposed paragraph 2 was not intended to exclude the ITO from
participation in the resolution of a matter after the United Nations had acted.99 He indicated that the
language of the proviso could be improved to make more clear at what stage the procedures on the
settlement of differences under the ITO Charter would come into operation.100
3.23. The representative of India expressed doubts about whether, under the proposed
paragraph 2, "t he bona fides of an action allegedly coming within [the provision on security
exceptions] could be questioned".101 The representative of India understood that the intention was
to limit the possibility of "counteraction" against security measures to "compensatory action and not
to include 'punitive action '". The representative of India indicated that his delegation wo uld be
prepared to consider the proposed new paragraph.102
3.24. The United States observes that the representative of India, "when discussing nullification or
impairment claims" as remedies for the invocation of security exceptions, expressed doubts about
whether the good faith of an action purportedly coming within the provision on security exceptions
could be put into question. 103 The United States further notes that reference to nullification or
impairment in the provision on security exceptions would have been "unnecessary", and refers to
statements made by the representative of the United States at the above-mentioned meeting.104
3.25. China does not specifically comment on this document.
3.1.5 28 February 1948 – Meeting of Sub -Committee I ( Article 94), Sixth Committee:
Organization
3.26. At a meeting of Sub-Committee I (Article 94) of the Sixth Committee (Organization) held on
28 February 1948, the delegations agreed to add the following paragraph to the notes from the
previous meeting:
The representative of the United Kingdom Delegation, as the proposer of the new article,
was asked whether in his opinion it would permit a Member, in the defined
circumstances, to take unilateral economic sanctions. He replied that if this article were
included in the Charter, the Charter would neither permit, nor condemn, nor pass any
judgment whatever on, unilateral economic sanctions.105
3.27. According to the United States, this statement by the representative of the United Kingdom
was made in relation to the revised security exceptions provision i n the ITO Draft Charter,
particularly with regard to the amended chapeau of the provision.106

97 United Nations Conference on Trade and Employment, Sub-Committee I (Article 94) of Committee VI
(Organization), Notes of the Fourth Meeting, (Exhibit USA-47), p. 3.
98 United Nations Conference on Trade and Employment, Sub-Committee I (Article 94) of Committee VI
(Organization), Notes of the Fourth Meeting, (Exhibit USA-47), p. 3.
99 United Nations Conference on Trade and Employment, Sub-Committee I (Article 94) of Committee VI
(Organization), Notes of the Fourth Meeting, (Exhibit USA-47), p. 3.
100 United Nations Conference on Trade and Employment, Sub-Committee I (Article 94) of Committee VI
(Organization), Notes of the Fourth Meeting, (Exhibit USA-47), p. 3.
101 United Nations Conference on Trade and Employment, Sub-Committee I (Article 94) of Committee VI
(Organization), Notes of the Fourth Meeting, (Exhibit USA-47), p. 3.
102 United Nations Conference on Trade and Employment, Sub-Committee I (Article 94) of Committee VI
(Organization), Notes of the Fourth Meeting, (Exhibit USA-47), p. 3.
103 United States' first written submission, para. 76.
104 United States' first written submission, para. 77.
105 United Nations Conference on Trade and Employment, Sub-Committee I (Article 94) of Committee VI
(Organization), Notes of the Eight Meeting, E/CONF.2/C.6/W.123 (1 March 1948), (Exhibit USA-46), p. 1.
106 United States' first written submission, para. 76, fns 77 and 78 (referring to Amendment to Article 94
proposed by the UK Delegation, (Exhibit USA-44); United Nations Conference on Trade and Employment, Final

3.28. China does not specifically comment on this document.
3.2 Assessment by the Panel
3.29. As explained above, Article 32 of the Vienna Convention refers to preparatory work a nd the
circumstances of the conclusion of a treaty but does not exhaustively define the supplementary
means of treaty interpretation to which recourse may be had. 107 The discussions that took place in
1948 relate to a different treaty than the GATT 1947 and post-date the finalization of the text of the
GATT 1947, including Article XXI thereof, which was transposed into the GATT 1994 with the same
formulation. At the same time, both the negotiations of the GATT 1947 and the discussions of 1948
occurred in the broader context of the negotiations of the ITO Charter. Within that broader context,
the terms of the security exceptions in Article XXI of the GATT 1947 had already been agreed
following proposals and discussions addressed by the Panel in the previous section of this Appendix.
In light of the chronology of the events under review as well as the institutional setting in which they
took place, the Panel considers discussions during negotiations of the ITO Charter taking place in
1948 to be of relatively lim ited value for the purposes of interpreting Article XXI of the GATT 1994
in relation to the contested issues in this dispute. The Panel will weigh the results of its assessment
of the materials and arguments submitted against the backdrop of this consideration and the limited
purposes under Article 32 of the Vienna Convention for having recourse to supplementary means of
interpretation.
3.30. The Panel will address the materials outlined above in their chronological sequence with
specific regard to the United States' contention that the negotiators intended non -violation
complaints to be the only available remedy in response to the invocation of the security exceptions
under the ITO Draft Charter and the GATT 1947.
3.31. Concerning the Report of the Working Party of Sub-Committee G of Committee VI on Chapter
VIII (Settlement of Differences – Interpretation) dated 9 January 1948108, the Panel notes that the
Working Party considered that the provision on non-violation complaints would apply to actions taken
pursuant to the security exceptions. In those situations, the Working Party indicated t hat such
actions would be consistent with the ITO Draft Charter but could still nullify or impair the benefits
accruing to other ITO members. The Working Party expressed the understanding that, in those
circumstances, affected ITO members could not claim the ITO-inconsistency of the contested actions
but could nevertheless resort to non -violation complaints. In the Panel's view, this statement does
not necessarily reveal that non -violation complaints would be the only available remedy for the
invocation of the security exceptions. The reference to actions "consistent" with the ITO Draft Charter
could also suggest that actions meeting the requirements of the security exceptions would be
consistent with the Charter but could still be subject to non -violation complaints. Furthermore, the
statement reflects the views of four delegations only. In any event, the understanding arrived at by
those four delegations refers to a revision of the dispute settlement provisions different from the
text of Article XXIII of th e GATT 1947 that was concluded in October 1947. Absent an explicit
connection being made in the text of the Working Party Report in that regard, it is doubtful that any
understanding arrived at by four delegations in relation to the ITO Draft Charter would also affect
the GATT 1947, which was already applied on a provisional basis at the time of the discussion.
3.32. Regarding the meeting of the Sub -Committee on Chapter VIII (Settlement of Differences –
Interpretation) of the Sixth Committee (Organization), dated 13 January 1948109, the minutes show
an agreement of five delegations with the Chairperson that actions of the type mentioned in the
security exceptions of the ITO Draft Charter could not be challenged by recourse to the procedures
of the Chapter on the "S ettlement of Differences". Those delegations also agreed that affected
members could still resort to the procedures on compensatory measures. However, no consensus
could be reached on this point, and the minutes clearly mention that two delegates expressed doubts
on the position put forward by the Chairperson. Eventually, the sub-committee agreed to leave the
question of the relationship between the security exceptions and the rules on dispute settlement for
further consideration at a later point in time. T hus, although some delegations expressed the view
that action taken pursuant to the security exceptions could not be subject to dispute settlement

Act and Related Documents, (Exhibit USA-45); and United Nations Conference on Trade and Employment, Sub-
Committee I (Article 94) of Committee VI (Organization), Notes of the Eight Meeting, (Exhibit USA-46)).
107 See para. 2.33 above.
108 See section 3.1.1 above.
109 See section 3.1.2 above.

procedures, the minutes of the meeting clearly show that there was no agreement on this point, and
that two representatives expressed doubts on this specific aspect.
3.33. In its proposed amendments to the security exceptions submitted on 16 January 1948, the
United Kingdom sought to introduce language allowing application to the ITO for authorization to
suspend obligations or concessions for an equivalent amount of any benefit under the ITO Draft
Charter that was nullified or impaired by actions under the security exceptions. 110 The proposal
further sought to temporarily exclude certain measures adopted in pursuance of Chapter IV of the
Charter of the United Nations from the applicability of the provisions on dispute settlement, until the
United Nations had made recommendations o r had otherwise disposed of the matter. 111 The Panel
notes that the proposal did not provide that the only option of ITO members affected by the
application of security measures would be to suspend or withdraw concessions or obligations for an
equivalent amount. Furthermore, the proposal sought to exclude the applicability of the provisions
of dispute settlement only to a subset of measures, and only temporarily. The proposal, moreover,
was not ultimately adopted.
3.34. In relation to the meeting of Sub -Committee I of the Sixth Committee held on
17 January 1948, the Panel notes that the delegate of India expressed doubts about whether "the
bona fides of an action allegedly coming within [the security exceptions] could be questioned". The
Panel does not consider this statement made by one representative to shed light on the issue of the
reviewability of the security exceptions. The Panel further notes that the delegate of the
United States considered it "unnecessary" to include reference to the notions of nullificat ion or
impairment in the text of the provision of security exceptions, on the grounds that it would amount
to a repetition of the content of the provision on dispute settlement. In the Panel's view, this
statement is not dispositive of the question of whether non-violation complaints were considered by
ITO negotiators to be the only available remedy to the invocation of the security exceptions under
the ITO Draft Charter. The Panel also notes that other passages from the minutes of the above -
mentioned meeting do not provide relevant clarification as to the interpretive questions raised in
this dispute.
3.35. The Panel further refers to the statement of the representative of the United Kingdom, made
at a meeting of Sub-Committee I of the Sixth Committee on 28 February 1948, that "if this article
were included in the Charter, the Charter would neither permit, nor condemn, nor pass any judgment
whatever on, unilateral economic sanctions".112 It is questionable whether this statement was made
in relation to the entire r evised security exceptions provision in the ITO Draft Charter or, as the
United States contends, with specific regard to the chapeau of the provision, which was slightly
amended compared to the formulation in Article XXI of the GATT 1947.113 In this regard, the
statement does not explicitly refer to the revised chapeau of the security exceptions in the ITO Draft
Charter but rather the entire "article". The Panel notes from the minutes of the previous meeting
that the discussion revolved around three specific issues, none of which concerned the revised
chapeau of the sec urity exceptions or the reviewability of the invocation of the provision. 114
Moreover, the Panel notes that this statement was made by one delegation only and was limited to
"unilateral economic sanctions" without further clarification. Accordingly, the Pan el does not find
clear interpretive guidance in this statement absent a clear link to the contested issues in this dispute
and without any indication of the views of other delegations.

110 See para. 3.14 above.
111 See para. 3.14 above.
112 See para. 3.25 above. This statement was added to the minutes from a previous meeting, which
were not submitted by either party in this dispute. The previous meeting of the Sixth Committee was held on
27 February 1948. (See United Nations Conference on Trade & Employment, Sixth Committee, Notes of the
Seventh Meeting (Article 94), E/CONF.2/C.6/W.121 (27 February 1948)).
113 See United States' first written submission, para. 76, fn 77.
114 Specifically, the minutes of the 27 February 1948 meeting report a discussion on three issues
relating to Article 94: (i) the provisional agreement already reached by the negotiators on the addition of a
paragraph dealing with peace treaties and special regimes; (ii) the possibility to amend the wording of
subparagraph 1(c) of Article 94 dealing with intergovernmental agreements made by or for a military
establishment; and (iii) the possibility to include a provision in the text of the security exceptions on temporary
arrangements between India and Pakistan pending the establishment of permanent trade relations. (See
United Nations Conference on Trade & Employment, Sixth Committee, Notes of the Seventh Meeting
(Article 94), E/CONF.2/C.6/W.121 (27 February 1948)).

3.36. To summarize, the materials indicate that, after the text of the GATT 1947 was finalized and
the agreement was already applied on a provisional basis, some delegations at the ITO Charter
negotiations expressed the understanding that actions purportedly taken under the security
exceptions could be subject to non -violation complaints. However, the discussions in 1948 do not
show that there was a shared understanding by all negotiators that non-violation complaints would
be the only form of redress for invocations of the security exceptions to the exclusion of claims of
inconsistency. In any event, neither the ITO Draft Charter nor the GATT 1947 contain any explicit
derogation precluding claims of inconsistency for measures taken pursuant to the security
exceptions. Furthermore, nowhere do the materials reviewed refer explicitly t o Article XXI of the
GATT 1947, but only to the corresponding provision in the ITO Draft Charter.
3.37. Based on the foregoing, the Panel does not find support in these materials for the contention
by the United States that measures taken under the security exce ptions could only be subject to
non-violation claims to the exclusion of claims of inconsistency. This conclusion is consistent with
the Panel's understanding that Article XXI(b) of the GATT 1994 is not "self -judging" in the sense
argued by the United States. Accordingly, the analysis of these materials confirms, or at least does
not undermine, the Panel's interpretation of Article XXI(b) of the GATT 1994.
4 INTERNAL DOCUMENTS OF THE US DELEGATION AT THE ITO/ GATT 1947
NEGOTIATIONS
4.1 Arguments and materials submitted by the parties
4.1. The United States submits various internal documents of the US delegation at the negotiations
of the ITO Charter and the GATT 1947 and notes that the panel in Russia – Traffic in Transit referred
to a study discussing these documents.115 While submitting these documents as part of its arguments
on the interpretation of Article XXI(b) of the GATT 1994, the United States argues that the materials
referred to by the panel in Russia – Traffic in Transit are not "negotiating history" within the meaning
of the Vienna Convention.116 The United States maintains that those materials were confidential at
the time of the negotiations, and that availability to all relevant parties before and during a
negotiation is a relevant factor to determine wheth er certain materials are part of the "negotiating
history", or other supplementary means of interpretation under Article 32 of the
Vienna Convention.117 The United States thus holds that it would be legal error to consider internal
documents of the US delegation at the ITO Charter and GATT 1947 negotiations as preparatory work
constituting supplementary means of interpretation.118 Nevertheless, the United States submits that,
when reviewed, the above-mentioned materials demonstrate that the US negotiators and other ITO
negotiating parties sought to exclude essential security matters from scrutiny in international fora
focused on trade.119 The United States is thus of the view that, even if these materials were to be
taken into account, they would further confirm that Article XXI(b) of the GATT 1994 is
"self-judging".120
4.2. China argues that internal documents of the US delegation at the ITO Charter and GATT 1947
negotiations are properly considered as circumstances of the conclusion of the GATT 1947.121
According to China, these documents are a good example of how a unilateral act can help to discern
the common intention of the parties. 122 While China does not consider th e historical background
offered by these documents to be necessary for a proper understanding of the negotiating history
of the GATT 1947, it argues that it would be appropriate for the Panel to take these documents into
account in its evaluation of the su pplementary means for the interpretation of Article XXI of the
GATT 1994.123

115 United States' first written submission, para. 80.
116 United States' first written submission, para. 81.
117 United States' first written submission, paras. 84-86; response to Panel question No. 63.
118 United States' first written submission, para. 87.
119 United States' first written submission, para. 89.
120 United States' first written submission, para. 82.
121 China's response to Panel question No. 63.
122 China's response to Panel question No. 63. See also China's second written submission, para. 111.
123 China's response to Panel question No. 63.

4.1.1 US Department of State, Memorandum of Conversation on "Security Exceptions to
proposed ITO Charter" (17 June 1946)
4.3. A memorandum dated 17 June 1946 summari zes a discussion on the se curity exceptions
among representatives of different branches and agencies within the government of the
United States prior to the submission of the United States' proposal for a draft text of the ITO
Charter.124 The following participants took part in the discussion: General Royall (Under Secretary
of War); Mr Kenney (Deputy to the Assistant Secretary of the Navy); Mr Deupree (Army -Navy
Munitions Board); Mr Neff (Department of War); Mr Clayton (Assistant Secretary of State); and Mr
Wilcox (Head of the Office of International Trade Policy at the Department of State).125
4.4. General Royall raised the concern that the proposed ITO Charter would make it impossible to
impose restrictions on the exportation of strategic raw materials or scrap materials essential for
security purposes, or to prevent enemies from obtaining United States' supplies of such materials.
General Royall made it clear that the army desired to have a "free hand" to stop shipments of
materials or technology "at any time without regard to whether or not there was an imminent threat
of war".126 Mr Deupree was concerned by the phrase "imminent threat of war" and suggested a
change in wording in order to avoid serious diplomatic repercussions.127
4.5. Mr Clayton addressed the concerns of the m ilitary services, noting the importance of the
objectives sought by the "trade program", including the preservation of peace and the protection of
national security.128 The representatives of the services acknowledged these points but continued to
argue for a "free hand in controlling international transactions for military purposes". 129 Mr Wilcox
assured the participants that the Department of State intended to make all necessary provisions to
safeguard national security, in a way that would not give "carte blanche to other countries to violate
their commitments with respect to commercial policy under the cloak of a sweeping security
exception".130
4.6. At the end of the meeting, the participants agreed that Mr Neff and Mr Wilcox would work on
the possibility to develop some wording that would meet the concerns of the military services without
invalidating the Charter or necessitating the abandonment of the "trade program".131
4.7. The United States notes from the summary of this discussion that military stakeholders sought
a provision on security exceptions that would allow the United States to take measures "without
regard to whether or not there was an imminent threat of war".132
4.8. China does not specifically comment on this document.
4.1.2 US Delegation, Economic Disarmament (Draft) (1946)
4.9. This document contains a reaction, unattributed to a specific source, to the argument raised
by military services that commitments in the ITO Charter would constitute e conomic disarmament,
and that responsibility for economic disarmament was properly placed under the jurisdiction of the
Security Council of the United Nations, where certain nations held veto rights. 133 The document

124 US Department of State, Memorandum of Conversation on "Security Exceptions to proposed ITO
Charter" (17 June 1946), (Exhibit USA-52).
125 US Department of State, Memorandum of Conversation on "Security Exceptions to proposed ITO
Charter", (Exhibit USA-52), p. 1.
126 US Department of State, Memorandum of Conversation on "Security Exceptions to proposed ITO
Charter", (Exhibit USA-52), p. 1.
127 US Department of State, Memorandum of Conversation on "Security Exceptions to proposed ITO
Charter", (Exhibit USA-52), p. 2.
128 US Department of State, Memorandum of Conversation on "Security Exceptions to proposed ITO
Charter", (Exhibit USA-52), p. 2.
129 US Department of State, Memorandum of Conversation on "Security Exceptions to proposed ITO
Charter", (Exhibit USA-52), p. 2.
130 US Department of State, Memorandum of Conversation on "Security Exceptions to proposed ITO
Charter", (Exhibit USA-52), p. 2.
131 US Department of State, Memorandum of Conversation on "Security Exceptions to proposed ITO
Charter", (Exhibit USA-52), p. 2.
132 United States' first written submission, para. 90.
133 US Delegation, Economic Disarmament (Draft), (Exhibit USA-53), p. 1.

reports the view that the argument whereby any aspect of military security, no matter how remote,
would override all considerations of "economic and social well -being" was "wholly at variance" with
the United States' established foreign policy and the Charter of the United Nations.134 The document
continues with the affirmation that international economic cooperation, including the reduction of
trade barriers, was a "major goal" of the United States' foreign policy.135
4.10. According to the United States, this document shows how, in early internal discus sions, the
view was held that a broad exception whereby military security interests would override all
considerations of social and economic wellbeing was inconsistent with the established foreign policy
of the United States and with the Charter of the United Nations.136
4.11. China does not specifically comment on this document.
4.1.3 US Delegation, Letter from Mr Coppock to Mr Wilcox (3 July 1946)
4.12. This document is an internal US government memorandum from Mr Coppock (Department of
State) to Mr Wilcox on "National Sec urity Provisions in the Draft Charter". 137 The memorandum
recalls the diverging positions within the US delegation between the military branch and the
Department of State, the former advocating for an exemption for any measure that a country
deemed essential to its national defence, and the latter being concerned with the risk that the wide
use of a broad exception would nullify much of the ITO Charter.138
4.13. The memorandum suggests a compromise along "procedural" instead of "substantive lines",
by "assigning to some body, presumably international, probably the Executive Board of the ITO or
the Security Council (or some sub -group of it), the task of granting exceptions to the Charter
provisions on the grounds of national defense". 139 In support of the proposed sol ution, the
memorandum outlines two additional considerations: (i) any rule written in the Charter would call
for interpretation "unless the unilateral assertions of a particular country that their restrictive
measures are essential to their national defens e are accepted at face value"; (ii) the difficulty "to
write a rule that is general enough to cover the rather wide variety of intended circumstances and
yet narrow enough to restrain abuses".140
4.14. The memorandum assumes that interpretations of the invocation of the security exceptions
would need to be made, and therefore proposes to "face squarely" the question of whether the
Executive Board of the ITO would be the proper body to do so. 141 The memorandum suggests the
option of the Executive Board act ing in the first instance, with the possibility that any decision be
appealed to the Security Council of the United Nations or a committee thereof.142
4.15. The United States notes that this "procedural solution" was included in the draft text of the
ITO Charter that the United States presented to other delegations in September 1946.143
4.16. China does not specifically comment on this document.
4.1.4 US Delegation, Minutes of the Delegation Meeting (2 July 1947)
4.17. This document reproduces the minutes of a meeting of the US delegation held in Geneva on
2 July 1947 in the context of the second meeting of the Preparatory Committee of the United Nations

134 US Delegation, Economic Disarmament (Draft), (Exhibit USA-53), p. 1.
135 US Delegation, Economic Disarmament (Draft), (Exhibit USA-53), p. 1.
136 United States' first written submission, para. 91.
137 US Delegation, Letter dated 3 July 1946 from Mr Coppock to Mr Wilcox on "National Security
Provisions in the Draft Charter", (Exhibit USA-54).
138 US Delegation, Letter from Mr Coppock to Mr Wilcox, (Exhibit USA-54), p. 1.
139 US Delegation, Letter from Mr Coppock to Mr Wilcox, (Exhibit USA-54), p. 1.
140 US Delegation, Letter from Mr Coppock to Mr Wilcox, (Exhibit USA-54), pp. 1-2.
141 US Delegation, Letter from Mr Coppock to Mr Wilcox, (Exhibit USA-54), p. 2.
142 US Delegation, Letter from Mr Coppock to Mr Wilcox, (Exhibit USA-54), p. 2.
143 United States' first written submission, para. 93 (referring to Report of the First Session of the
Preparatory Committee, (Exhibit USA-31), Annexure 11 (United States Draft Charter)).

Conference on Trade and Employment. 144 The discussion notably revolved around the security
exceptions145 concerning a proposal by Mr Neff for another draft provision with the following text:
Article 94
General Exceptions to the Whole Charter
1. Without limiting the generality of any other exception or qualification, none of the
obligations of this Charter shall apply to any measure or agreement:
a. Relating to fissionable materials or their source materials;
b. Relating to the traffic in arms, ammunition and implements of war and to such traffic
in other goods and materials as is carried on, directly or indirectly, for the purpose of
supplying a military establishment;
c. In time of war or other emergency in international relations, relating to the protection
of its [essential] security interests;
d. Undertaken in pursuance of obligations under the United Nations Charter for the
maintenance or restoration of international peace and security.
2. Notwithstanding any provision of the Charter, no Member shall have to furnish any
information in any report required by, or pursuant to, the Charter the furnishing of
which will be contrary to its national security.
3. The provisions of Article 86 relating to the interpretation and settlement of disputes
shall not apply to paragraphs 1 and 2 of this Article but each Member shall have
independent power of interpretation.146
4.18. According to the minutes of the meeting, the draft provoked "considerable discussion". 147
Concerning the expression "[w]ithout limiting the generality of any other exception or qualification"
in paragraph 1, several members of the delegation raised doubts about whether it was necessary to
achieve the objective sought. Mr Catudal (Department of State) pointed out that, as a matter of law,
the clause in question was "unnecessary" and added nothing to the draft text of the security
exceptions proposed by Mr Kellogg (Department of Stat e), which read in its introductory clause:
"Nothing in this Charter shall be construed to prevent the adoption or enforcement by any Member
of any measure which it may deem necessary …". 148 According to Mr Catudal, Mr Kellogg's draft

144 US Delegation, Second Meeting of the United Nations Preparatory Committee for the International
Conference on Trade and Employment, Minutes of the Delegation Meeting (2 July 1947), (Exhibit USA-48).
145 The security exceptions were discussed also earlier in the meeting based on a proposal by Mr Neff,
which was rejected with a unanimous vote of the US delegation, to add the words "directly or indirectly" to
Article 94(1)(b) as follows: "… relating to the traffic in arms, ammunition and implements of war and to such
traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military
establishment." US Delegation, Minutes of the Delegation Meeting (2 July 1947), (Exhibit USA-48), p. 5
(emphasis added). In support of the proposal, Mr Neff argued that this language would have been in line with a
legislative proposal for the control of traffic in arms and implements of war that had been submitted to the
Congress of the United States around the same time. Moreover, Mr Neff added that the proposed wording was
"dictated by considerations to give the US Government the widest possible latitude in dealing with national
security objectives". The minutes report that the proposal "provoked sharp discussion". Mr Evans (Department
of Commerce) replied that the proposal was "unnecessary", as the United States already enjoyed ample
latitude to meet any contingency under the wording as it was at that time. Mr Leddy (Department of State), Mr
Rubin (legal advisor for the delegation), and Mr Bronz (Department of Treasury) argued "with equal fervor"
against the inclusion of the proposed wording. Mr Wilcox held that the addition of the proposed words would
have been "equally destructive" of the purpose of the Charter as the amendments proposed by other countries
were designed to eliminate control over the use of quantitative restrictions. (US Delegation, Minutes of the
Delegation Meeting (2 July 1947), (Exhibit USA-48), p. 5). Eventually the phrase "directly or indirectly" was
included in the final formulation of Article XXI(b)(ii) of the GATT 1947 and Article 99(1)(b)(ii) of the ITO Draft
Charter.
146 US Delegation, Minutes of the Delegation Meeting (2 July 1947), (Exhibit USA-48), p. 10. (emphasis
original)
147 US Delegation, Minutes of the Delegation Meeting (2 July 1947), (Exhibit USA-48), p. 6.
148 US Delegation, Minutes of the Delegation Meeting (2 July 1947), (Exhibit USA-48), pp. 6 and 9.

covered "[e]very possib le contingency involving the national security of the United States".149 Mr
Rubin, Mr Brown (Department of State), Mr Leddy, and Mr Evans agreed with Mr Catudal.150
4.19. The United States notes that in internal discussions, some government stakeholders sought
to make the "self -judging" nature of the national security exception even more explicit. 151 The
United States further highlights that this proposal tabled by a military representative included
language that the provisions on dispute settlement would not apply to the security exceptions,
leaving to the ITO members concerned the "independent power of interpretation ".152 According to
the United States, the panel in Russia – Traffic in Transit erroneously concluded that the US
delegation rejected Mr Neff's proposals based on a view that "the risk of abuse by some countries
outweighed concerns regarding the scope of act ion left to the United States by the Charter". 153
Instead, the United States maintains that the suggestions were rejected on the grounds that they
were deemed "unnecessary", as the majority of the delegation was of the view that the existing text
adequately preserved the United States' freedom of action.154
4.20. China does not specifically comment on this document.
4.1.5 US Delegation, Minutes of the Delegation Meeting (4 July 1947)
4.21. Further to a request made by Mr Wilcox at a previous meeting, Mr Rubin submitted a new
draft article on "general exceptions"155 with the following text:
Chapter IX
Article
General Exceptions
[Without limitation of any other exceptions or qualification] Nothing in this Charter shall
be construed to compel any Member to furnish any information the furnishing of which
it considers contrary to its essential security interests , or to prevent the adoption or
enforcement by any Member of any measure or agreement which it may [deem]
consider to be necessary and to relate to:
a) [Relating to] Fissionable materials or their source materials;
b) [Relating to] The traffic in arms, munition and implements of war and to such traffic
in other goods and materials as is carried on for the purpose of supplying a military
establishment;
c) In time of war or other emergency in international relations [relating to] the
protection of its essential security interests;
d) [Undertaken] Undertakings in pursuance of obligations under the United Nations
Charter for the maintenance of international peace and security.
Conference on Trade and Employment, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p.
2.

N. B. The brackets indicate changes from the original draft submitted by Mr Neff. For
coy of Mr Neff's original draft see minutes of July 2, 8 p.m. meeting.156
4.22. Among the issues discussed at the meeting 157, there was a request by Mr Wilcox to c hange
the phrase "and to relate to" at the end of the introductory clause of the provision with the words
"relating to". 158 Mr Rubin replied that he had discussed this issue with Mr Neff, who "objected
vigorously" to the change. 159 According to Mr Neff, the use of the terms "and to relate to" meant
that, "[b]y retaining it as an independent clause the meaning is clear; the US may take unilateral
action".160 Mr Evans, Mr Leddy, and Mr Terrill "objected strongly" to the retention of the words "and
to relate to", arguing that such a provision would destroy "the entire efficacy of the Charter".161 The
three specifically noted that "[p]roviding the means for unilateral action will surely be abused by
some countries", as "any country could, under the pretext of nation al security, take any measure
whatsoever it might wish in complete disregard of all provisions of the Charter".162 Mr Leddy added
that it would have been "better to abandon all work on Charter" instead of including the proposed
wording.163
4.23. In response to the criticisms, Mr Neff argued that, with regard to matters of national security,
the United States had to be "given a free hand to make whatever decisions may be necessary without
challenge by the ITO".164 Mr Evans replied that the United States would be a sufficiently important
member of the ITO and that, in the event of a "bona fide" national security problem, the ITO would
not be able to do otherwise than find in favour of the United States.165 This opinion was shared by
Mr Brown.166
4.24. Mr Ryder ( Tariff Commission) stated that, in practical terms, no injury could come to the
United States by an intervention of the ITO to determine whether certain measures were in fact
taken in the interest of national security. 167 Mr Wilcox argued that he did not th ink that the ITO
would ever become a forum to discuss national security interests. 168 In light of the diverging views
of the members of the delegation, Mr Wilcox called for a vote on the question whether the language
"and to relate to" should be retained. O nly three members of the delegation voted to retain this
wording (Captain Thorp (Navy), Mr Neff, and Mr Brossard (Tariff Commission)), whereas the majority
voted to change the language to "relating to" (Mr Ryder, Mr Leddy, Mr Evans, Mr Brown, Mr Arnold
(Department of State), Mr Rubin, Mr Terrill, Mr Hawkins, and Mr Schwenger (Department of
Agriculture)).169
4.25. After the vote, Mr Neff asked that a provision be included in the Charter to the effect that any
challenge against a measure taken purportedly for nation al security reasons be referred to the
"World Court" for decision, rather than to the ITO. 170 Mr Neff further requested that his dissent to
the decision taken by vote be reflected in the minutes of the meeting.171
4.26. The United States highlights that a proposal was tabled to add the words "and to relate to" to
the text of the provision, and that such proposal was ultimately rejected.172

156 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p. 4. (emphasis
original)
157 Earlier in the meeting there was a discussion on the necessity to include the words "or agreement" in
the introductory clause of the provision. Further to the discussion, the participants reached a compromise,
replacing the words "measure or agreement" with "action". (US Delegation, Minutes of the Delegation Meeting
(4 July 1947), (Exhibit USA-56), p. 2).
158 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p. 2.
159 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p. 2.
160 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p. 2.
161 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p. 2.
162 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), pp. 2-3.
163 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p. 3.
164 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p. 3.
165 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p. 3.
166 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p. 3.
167 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p. 3.
168 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p. 3.
169 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p. 3.
170 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p. 3.
171 US Delegation, Minutes of the Delegation Meeting (4 July 1947), (Exhibit USA-56), p. 3.
172 United States' first written submission, paras. 97-98.

4.27. China notes that the minutes of the meeting show the understanding by the participants that
the approval of the proposed change would have placed the applicability of the subparagraphs within
the scope of what an ITO member could unilaterally determine. 173 China further notes that the
proposal was rejected, on the grounds that its adoption would be destructive for the efficacy of the
Charter.174
4.1.6 US Delegation, Memorandum of Mr Rubin (14 July 1947)
4.28. In response to two memoranda filed, respectively, by Mr Neff and Captain Thorp, Mr Rubin
submitted another memorandum with his comments on the internal deliberations of the US
delegation concerning the drafting of the security exceptions.175
4.29. Mr Rubin provided his views with regard to the question of "the power to interpret the security
exceptions".176 Mr Rubin recognized that there were differences between the wording of the draft
security exceptions provision at that time and the proposal submitted by Mr Neff, pursuant to which
the introductory clause of the provision would have ended with the words "from taking any action
which it may consider to relate to …".177
4.30. Mr Rubin noted that the changes proposed by Mr Neff "would make it perfectly clear that any
[ITO m]ember had the unilateral power to decide that any action wh ich it proposed to take related
to the matters illustrated in the lettered [sub]paragraphs". 178 Mr Rubin further noted that those
changes would have made "unchallengeable … a justification, however far-fetched, of any action on
this basis".179 In this respect, Mr Rubin wrote that, "[t]o the extent that the wording approved by
the Delegation does not permit this completely open escape from the Charter, it may be said, as Mr
Neff argues, to limit the scope of the unilateral interpretation portion of the security exceptions."180
4.31. Mr Rubin further argued that "the security exceptions are as drafted sufficiently broad to take
care of any reasonable case".181 According to Mr Rubin, the security exceptions were redrafted "to
provide for unilateral determination by each [ITO m]ember, unchallenged by any other [ITO
m]ember, as to what action it deems necessary in a field 'relating to' the listed subjects" in the
lettered subparagraphs.182 Mr Rubin therefore expressed his understanding that no challenge could
be made to any action taken by the United States: (i) falling in the field of "fissionable materials",
as no challenge could be made to measures regulating the use of "source materials" for fissionable
materials, or the traffic in arms, ammunitions, and implements of war, "no matter how remote may
be considered the relevance of the measure undertaken to the problem to be solved, if the measure
falls in any of these fields"; or (ii) "if the measure relates to any of the any of the identified fields of
interest – another phrase which grants broad power of unilateral determination".183
4.32. Mr Rubin further referred to testimony before the US Senate Finance Committee that "does
not indicate a commitment to go farther than these broad and unilateral exceptions, nor a desire
that … the Charter should in effect be negated by such a broad and unilateral security exception that
any action, no matter how little related to security, would be immune even from question".184
4.33. Mr Rubin expressed the view that, as the exceptions were drafted at that time, "no action in
or relating to certain fields where national security is concerned can be questioned, whether before
the Organization or the Court".185 Mr Rubin expressed the understanding that the changes introduced
in the wording of the provision were in accordance with the commitment of the Department of State

173 China's opening statement at the first meeting of the Panel, para. 42.
174 China's opening statement at the first meeting of the Panel, para. 42.
175 US Delegation, Second Meeting of the United Nations Conference on Trade and Development,
Memorandum of Seymour J. Rubin (14 July 1947), (Exhibit USA-49). The memoranda of Mr Neff and Captain
Thorp were not submitted to the Panel and are not part of the record of this dispute.
176 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 1.
177 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 1.
178 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 1.
179 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 1.
180 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 1.
181 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 2.
182 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 2.
183 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 2.
184 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 2.
185 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 3.

expressed in the following terms: "These new exceptions would be worded so as to give each Member
freedom to apply them as it determines in the interest of its own security".186
4.34. Mr Rubin then addressed the comment raised by Mr Neff that there was a contrast between
the proposals submitted in the context of the ITO negotiations and the United Nations Charter in
which, according to Mr Neff, "the United States reserved the complete power of unilateral action in
regard to any matter affecting its national security".187 In this regard, Mr Rubin "supposed that this
refers to the veto power" a nd noted that it was not the policy of the United States to support the
veto principle in international affairs or to reserve the veto "for all nations which come into any
international organizations, ITO or any other".188
4.35. In conclusion, Mr Rubin stated tha t the security exceptions as drafted at that time gave "a
great deal of leeway for unilateral determination on matters affecting national security", and that
the wording proposed by Mr Neff would have made the ITO Charter an "illusory document". 189 Mr
Rubin further explained that a "broader exception" would have been invoked by other countries
rather than by the United States, and that the formulation of the security exceptions at that time
granted the United States freedom to apply the provision as it determined in the interests of its own
security, "provided that it [was] the exception and not something else".190
4.36. According to the United States, this memorandum confirms that earlier formulations of the
security exceptions already provided for broad power of u nilateral interpretation, and that the
suggestions from the military representatives would have expanded that power only to the extent
that it was not already preserved in the text. 191 The United States further emphasizes that the
memorandum reiterates that "no challenge" could be made with regard to actions falling "in the field
of fissionable materials … or the traffic in arms … no matter how remote may be considered the
relevance of the measures undertaken to the problem to be solved". 192 The United States argues
that it was the view of the US delegation that the then-current text of the security exceptions already
permitted each ITO member to determine, "for itself", what actions were necessary to protect its
essential security interests in the fields listed in the provision. 193 The United States considers that
the US delegation did not take the position "that the scope of the unilateral action accorded to a
Member invoking the security exceptions would be limited to the necessity of the measure and would
not extend to the determination of the other elements of the provision", as concluded by the panel
in Russia – Traffic in Transit .194 Instead, the United States maintains that the memorandum
specifically states that, under the text of the se curity exceptions, the United States could justify
security measures "as it may contemplate as 'relating to'" the subjects listed in the provision.195
4.37. According to China, the memorandum of Mr Rubin confirms that the US delegation agreed
upon a balance where by ITO members could unilaterally determine whether a certain action was
"necessary" for the protection of their essential security interests, but the question of whether that
action related to the matters contained in the lettered sub paragraphs was not left to the unilateral
determination of ITO members. 196 According to China, this explanation provided by Mr Rubin is
consistent with the position expressed by the delegate of the United States in response to questions
received by the delegate of the Netherlands at a meeting held on 24 July 1947.197
4.2 Assessment by the Panel
4.38. The Panel notes the parties' views on the potential relevance under Article 32 of the
Vienna Convention of the internal documents of the US delegation at the negotiations for the ITO

186 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 3.
187 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 3.
188 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 3.
189 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 3.
190 US Delegation, Memorandum of Mr Rubin, (Exhibit USA-49), p. 3.
191 United States' first written submission, para. 100.
192 United States' first written submission, para. 101.
193 United States' first written submission, para. 101.
194 United States' first written submission, para. 102 (citing Panel Report, Russia – Traffic in Transit,
para. 7.91).
195 United States' first written submission, para. 102.
196 China's opening statement at the first meeting of the Panel, para. 44.
197 China's opening statement at the first meeting of the Panel, para. 45 (referring to Report of the
24 July 1947 Meeting, (Exhibit USA-41)). See the discussion in section 2.1.5 above.

Charter a nd the GATT 1947. The Panel further recalls its understanding that Article 32 of the
Vienna Convention refers to preparatory work and the circumstances of the conclusion of a treaty
as examples, without limiting the scope of the supplementary means of treaty interpretation to which
there may be recourse.198
4.39. In considering the possible relevance of these documents under Article 32, the Panel notes
that these documents were not in the public domain, nor were they accessible to other delegations
at the time the negotiations of the ITO and the GATT 1947 took place. These documents pertain to
the internal deliberations of only one delegation among those negotiating the ITO Charter and
GATT 1947, albeit the proponent of the draft text for the security exceptions. The Panel is mindful
that the documents do not shed light on the views or intentions of other delegations, nor are these
documents submitted as a comprehensive record of the internal views of the one delegation to which
they pertain.
4.40. Subject to these limitations, the Panel does not consider that these documents are, in
principle, entirely irrelevant as supplementary means for the interpretation of Article XXI(b) of the
GATT 1994. These documents provide a record of discussions on various alternative versions of the
security exceptions taking place around the time the provision was being drafted. Furthermore,
certain discussions reported in the submitted documents specifically revolved around the extent to
which the text of the security exceptions would permit some form of review of their invocation.
Against this background, the Panel reviews the content of these documents bearing in mind their
inherent limitations as a partial record of the internal views of one single delegation, and the different
institutional setting compared to the WTO in which these discussions took place, particularly with
respect to the resolution of disputes.
4.41. The first two documents reflect diverging views among various branches of the US
government prior to the s ubmission of the United States' proposal for a draft text of the ITO
Charter199, particularly between the military services and the Department of State in relation to the
drafting of the security exceptions. While the military services argued in favour of a "free hand" to
impose export restrictions of materials or technology, without there needing to be an "imminent
threat of war", representatives of the Department of State emphasized the benefits of the "trade
program" and committed to make sure that nation al security interests be fully preserved, without
giving "carte blanche" to other ITO members to avoid their trade commitments "under the cloak of
a sweeping security exception".200 The divergence of views extended to the perceived rationale for
the ITO Charter, with military services considering it a form of economic disarmament to be properly
placed under the aegis of the Security Council of the United Nations, and other branches of the US
government noting that the reduction of trade barriers was a major goal of the United States' foreign
policy, not to be necessarily overridden by any aspect of military security. 201 The Panel considers
that these documents reveal an initial difference in the positions of various branches of the US
government that would be the subject of efforts to reach a compromise.
4.42. With regard to the letter from Mr Coppock to Mr Wilcox, the Panel notes that it contained a
"procedural" proposal with the aim of bridging the diverging views between the military services and
the Department of State. According to this proposal, in light of the impossibility to draft a text of the
provision that would satisfy the opposing views, a solution could be found by entrusting the Executive
Board of the ITO or the Security Council of the United Nations w ith the authority to review the
invocation of the security exceptions, either in the first instance or on appeal.202 Consistent with the
review of the negotiating history of Article XXI of the GATT 1947 conducted earlier, this document
shows that various alternative institutional architectures for the ITO were being considered around
the time early drafts of the security exceptions provisions began to be discussed.
4.43. Turning to the minutes of the meeting t hat took place on 2 July 1947, the Panel notes that
the debate concerned a proposal for an alternative wording of the security exceptions tabled by a
representative of the military services. Specifically, the proposal included language that was
understood to explicitly shield the invocation of the security exceptions from the applicability of the

198 See para. 2.33 above.
199 US Department of State, Memorandum of Conversation on "Security Exceptions to proposed ITO
Charter", (Exhibit USA-52); US Delegation, Economic Disarmament (Draft), (Exhibit USA-53).
200 See para. 4.5 above.
201 See para. 4.9 above.
202 See para. 4.14 above.

rules on dispute settlement. 203 While the debate does not reveal the specific reasons for rejecting
the proposed paragraph, the Panel notes that similar wording did not feature in any of the various
iterations of the security exceptions that were discussed during the negotiations of the ITO Charter
or the GATT 1947.
4.44. Regarding the meeting that took place on 4 July 1947, the Panel notes that the US delegation
discussed two versions of the introductory clause of the security exceptions provision. Under one
version, similarly to the current formulation of Article XXI of the GATT 1994, the chapeau of the
provision would end with the words "relating to". Under another versi on, the introductory sentence
referred to measures that an ITO member "consider[s] to be necessary and to relate to" one of the
situations detailed in the subsequent subparagraphs. 204 The majority of the delegation voted in
favour of the first version.205 Among the considerations that led to rejecting the second version, the
Panel notes that several participants to the meeting argued that it would have unduly expanded the
scope for unilateral action for ITO members, thereby opening the door to the possibility of abuses.
In this regard, the Panel notes that the US delegation rejected a potential formulation that would
have explicitly left it to the ITO member invoking the security exceptions to determine whether a
certain measure was within the scope of the subparagraphs.
4.45. With respect to the memorandum drafted by Mr Rubin to the Chairperson of the US delegation,
the Panel notes that the author examines different positions that emerged within the US delegation
concerning the power to interpret the security except ions. Specifically, Mr Rubin commented on a
proposal by Mr Neff that the introductory clause of the security exceptions end with the phrase "from
taking any action which it may consider to relate to", followed by the relevant subparagraphs.
According to the memorandum, this language would have made it clear that ITO members retained
the "unilateral power" to determine that their actions "did relate to the matters contained in the
lettered [sub]paragraphs", which would make "unchallengeable … a justification , however far -
fetched, of any action" purportedly taken under the security exceptions. The memorandum contrasts
"this completely open escape from the Charter" with the provision as it was drafted at that time,
which was already "sufficiently broad to apply to any reasonable case" by providing for "unilateral
determination by each [ITO m]ember, unchallenged by any other [ITO m]ember, as to what action
it deems necessary in a field" identified in the subparagraphs. Accordingly, the memorandum refers
to "action in or relating to certain fields where national security is concerned" that could not be
"questioned" before the competent organs envisaged in the draft text of the ITO Charter at that
time.206 While recognizing the need for "leeway" for ITO members in th e pursuit of their security
interests, the memorandum raised the concern that the proposals submitted by Mr Neff would have
transformed the ITO Charter into an "illusory document", opening the door for abuses by other ITO
members to the detriment of the interests of the United States.207 The identification of such concerns
along with explanations as to the specific "fields" in the subparagraphs indicates the aim of drafting
the text of the security exceptions so as to balance the need for ITO members to prot ect their
security interests while establishing limits to the potential abuse of the provision.
4.46. The materials examined in this section indicate that, during the negotiations of the GATT 1947
and the ITO Charter, different sensitivities emerged within the U S delegation with regard to the
drafting of the security exceptions. Bearing in mind the limits of this analysis as already
foreshadowed at the beginning of the Panel's assessment, the Panel notes that the US delegation
considered various alternative propo sals. According to some of these proposals, the invocation of
the security exceptions would have been explicitly shielded from the provisions on dispute
settlement. Under other alternative proposed wordings, whether the conditions listed in the
subparagraphs were met would have been a matter to be left exclusively to the consideration of the
ITO member invoking the security exceptions. The majority of the US delegation rejected these
proposals with a view to avoiding that excessively broad security exceptio ns could be abused,
thereby undermining the entire architecture of the ITO.
4.47. The Panel does not consider that these materials indicate that the provision as it was drafted
at the time already provided ITO members with the unilateral power to interpret it. Specifically, the

203 See para. 4.17 above.
204 See para. 4.21 above.
205 See para. 4.24 above.
206 See para. 4.33 above (emphasis added). The memorandum found further support in the absence of
indications that the US Senate Finance Committee desired "such a broad and unilateral security exception that
any action, no matter how little related to security, would be immune even from question".
207 See section 4.1.6 above.

Panel is not persuaded that the materials reveal an understanding that an ITO member could
unilaterally determine whether certain measures met the conditions listed under the subparagraphs
of the security exceptions provision, as contended by the United States. While not conclusive in and
of itself, the Panel considers noteworthy in this respect the fact that a drafting proposal suggesting
this very possibility was rejected by the majority of the US delegation.
4.48. Based on the foregoing, the Panel does not find support in these materials for the "self-judging
nature" of Article XXI(b) of the GATT 1994 as contended by the United States. Accordingly, and
taking into account the inherent limitations of these materials for the interpretive issues in this
dispute, the analysis of these materials confirms, or at least does not undermine, the Panel's
interpretation of Article XXI(b) of the GATT 1994.
5 DECISION OF THE CONTRACTING PARTIES IN US EXPORT RESTRICTIONS
(CZECHOSLOVAKIA) (1949)
5.1 Arguments and materials submitted by the parties
5.1. The United States refers to the Decision of the CONTRACTING PARTIES in the 1949 US Export
Restrictions (Czechoslovakia) dispute between the United States and Czechoslovakia (the 1949
Decision) as a "subsequent agreement between the parties regarding the interpretation of the treaty
or the application of its provisions".208 The United States argues that the 1949 Decision "reflects the
interpretation of Article XXI(b) as self-judging and constitutes a subsequent agreement … within the
meaning of Article 31(3)(a) of the Vienna Convention".209
5.2. The United States also argues that while a few contracting parties abstained and one party
dissented, the 1949 Decision nevertheless constitutes a subsequent agreement within the meaning
of Article 31(3)(a) of the Vienna Convention.210 The United States maintains that a subsequent
agreement need not be unanimous and refers to the text of Article 31 of the Vienna Convention in
support of this point, namely that Article 31(2)(a) refers to "all the parties" whereas Article 31(3)(a)
refers to "the parties". 211 In the United States' view, this is indicative of the drafters' intention to
deliberately omit the word "all", thereby not subjecting subsequent agreements to the requirement
of unanimity. 212 What is relevant for the United States is "whether the parties have reached
agreement pursuant to the decision -making rules that they have agreed for purposes of that
agreement".213 The United States maintains that the rules of procedure existing at that time provided
that "decisions shall be t aken by a majority of the representatives present and voting". 214 The
United States notes that while the WTO Agreement sets out detailed procedures for the adoption of
authoritative interpretations by the Ministerial Conference, such procedures were not in place at the
time of the above-mentioned dispute.215
5.3. According to the United States, since the GATT 1947 was incorporated verbatim into the
GATT 1994 without modifications, and since the text of Article XXI of the GATT 1947 is identical to
the text of Article XXI of the GATT 1994, "the interpretation reflected in the United States Export

208 United States' first written submission, para. 47.
209 United States' first written submission, para. 47.
210 United States' first written submission, fn 44.
211 United States' first written submission, fn 44; response to Panel question No. 65.
212 United States' first written submission, fn 44.
213 United States' response to Panel question No. 65.
214 Unites States' opening statement at the first meeting of the Panel, para. 24 and fn 9 (citing General
Agreement on Tariffs and Trade – Second Session of the CONTRACTING PARTIES, Rules of Procedures
GATT/CP.2/3 Rev.1 (Aug. 18, 1948), Rules 27 and 28 (GATT CONTRACTING PARTIES, Second Session, Rules
of Procedure for Sessions of the CONTRACTING PARTIES (As adopted on 16 August 1948), GATT/CP.2/3 Rev.1,
(Exhibit USA-90); GATT CONTRACTING PARTIES, Rules of Procedure for Sessions of the CONTRACTING
PARTIES (6 September 1949), GATT/CP/30, (Exhibit USA-91)). See also United States' response to Panel
question No. 64.
215 United States' first written submission, para. 48; response to Panel question No. 64. The
United States also notes that the GATT contracting parties subsequently established the practice of adopting
interpretations of the GATT 1947 through joint actions under Article XXV of the GATT 1947, but that practice
was not yet in place at the time of the 1949 Decision. (See United States' response to Panel question No. 66).

Restrictions decision is also a subsequent agreement for the purposes of the interpretation of
Article XXI of the GATT 1994".216
5.4. The United States further characterizes the 1949 Decision as being one of the "decisions" within
the meaning of Paragraph 1(b)(iv) of the language incorporating the GATT 1947 and other
instruments into the GATT 1994 (Paragraph 1(b)(iv) of the GATT 1994) and Article XVI:1 of the
WTO Agreement.217 The United States argues that the 1949 Decision was taken in accordance with
the rules in force at that time, and should therefore be distinguished from a recommendation by a
panel or a Working Party that was later adopted by the parties. 218 The United States thus argues
that, in interpreting the terms of the security exceptions, the Panel may consider the 1949 Decision
to be relevant "context", supporting the conclusion that Article XXI(b) of the GATT 1994 is self-
judging.219
5.5. China argues that the 1949 Decision does not constitute a "subsequent agreement" within the
meaning of Article 31(3)(a) of the Vienna Convention.220 According to China, the 1949 Decision:
(i) was taken under Article XXIII:2 of the GATT 1947, the predecessor to the DSU, and as such it is
a decision in a particular case and not a "subsequent agreement"; (ii) does not concern the
interpretation of Article XXI(b) but, at most, its application to specific facts; (iii) was not adopted by
consensus; and (iv) cannot be considered an "authoritative interpretation", a concept that did not
even exist at the time. 221 China further argues that the 1949 Decision was taken under the
GATT 1947, and as such is not "subsequent" to the GATT 1994.222 China considers that a
"subsequent agreement" must at least clearly express a "common understanding" of the terms of a
treaty, and the "acceptance of that understanding among Members".223 In this respect, China argues
that a decision that concerns the application of a provision to a specific set of facts does not reflect
a "common understanding" of the terms of a treaty.224
5.6. China submits that, under the GATT 1947, "a matter referred to the [CONTRACTING PARTIES]
under Article XXIII:2 would not have provided a legal basis for resolving a general interpretive
question", as understandings on the general interpretation of provisions were decided under a
different legal basis, namely Article XXV.225
5.7. Furthermore, China maintains that the 1949 Decision does not fall within the scope of
Paragraph 1(b)(iv) of the GATT 1994, as it does not constitute a definitive interpretation of the
relevant provision of the GATT 1947 and is not one of the decisions or agreements concerning the
GATT 1947 that was incorporated into the GATT 1994 by virtue of Paragraph 1(b)(iv) thereof.226
5.1.1 Request of Czechoslovakia for a decision under Article XXIII of the GATT 1947
5.8. The agenda for the Third Session of the GATT CONTRACTING PARTIES, revised on 8 April 1949,
included the "Request of the Government of Czechoslovakia for a decision under Article XXIII as to
whether or not the Government of the United States has failed to carry out its obligations under the
Agreement through its administration of the issue of export licenses".227
5.9. The parties do not make specific comments with regard to this document.

216 United States' response to Panel question No. 66.
217 United States' response to Panel question No. 25.
218 United States' response to Panel question No. 25.
219 United States' response to Panel question No. 25.
220 China's opening statement at the first meeting of the Panel, para. 63.
221 China's opening statement at the first meeting of the Panel, para. 64.
222 China's response to Panel question No. 66; second written submission, para. 103.
223 China's response to Panel question No. 65 (citing Appellate Body Report, US – Clove Cigarettes,
para. 267).
224 China's response to Panel question No. 67.
225 China's response to Panel question No. 67.
226 China's second written submission, para. 103 (citing Appellate Body Report, US – FSC, para. 108);
response to Panel question No. 66.
227 GATT CONTRACTING PARTIES, Third Session, Agenda (Revised 8 April 1949), GATT/CP.3/2/Rev.2,
(Exhibit USA-24), item 14.

5.1.2 Statements by Czechoslovakia and the United States
5.10. In a statement made in support of the request pursuant to Article XXIII of the GATT 1947,
the representative of Czechoslovakia argued that the United States administered its export licences
for products in short supply or of military significance differently, depending on whether goods were
destined to Canada and European countries participating in the European Re covery Programme or
to other European countries.228 The representative of Czechoslovakia claimed that the measures at
issue were inconsistent with Articles I and XIII of the GATT 1947.229 Czechoslovakia also claimed
that the measures could not be justified under Articles XIV, XX, or XXI of the GATT 1947.230
5.11. The representative of the United States replied that Czechoslovakia's description of the
measures was inaccurate, because a number of products were not subject to export licences, not all
applications for export licences to Czechoslovakia were denied, and in any event the measures were
justified under Articles XX and XXI of the GATT 1947.231
5.12. The parties do not make specific comments with regard to these documents.
5.1.3 Debate and Decision of the CONTRACTING PARTIES
5.13. The CONTRACTING PARTIES discussed Czechoslovakia's request at a meeting held on
8 June 1949.
5.14. The representative of Czechoslovakia was the first to intervene and cautioned against the
consequences for international trade of a rejection of Czechoslovakia's request.232
5.15. The representative of the United States stated that Czechoslovakia did not submit new facts
and accordingly requested the CONTRACTING PARTIES to dismiss the request.233
5.16. The representative of Cuba spoke in support of the United States' proposal to dismiss the
request of Czechoslovakia, arguing that "[t]he question asked by the Czechoslovakian representative
in relation to the provisions of Article I did not require an answer s ince the United States
representative had justified his case under Article XXI whose provisions overrode those of
Article I".234
5.17. The representative of Czechoslovakia maintained that " Article XXI referred to the traffic in
arms, ammunition and implements of war and other goods and materials for the purpose of
supplying a military establishment, but the United States Government had used and interpreted the
expression 'war material' so extensively that no one knew what it really covered".235
5.18. The representative of Pakistan stated that " Article XXI, embodying exceptions to all other
provisions of the Agreement, should stand by itself notwithstanding the provisions of other Articles
including Article I, and therefore the case called for examination only under the provisions of that
Article".236 He further argued that he was convinced that the measures at issue were taken "in the
interest of security and peace". 237 The representative of Pakistan opposed the establishment of a
Working Group to deal with the matter, arguing that "he did not believe that tangible results could
be produced by deliberations in a sub -group and that no economy of time would be justified in

228 GATT CONTRACTING PARTIES, Third Session, Statement by the Head of the Czechoslovak Delegation
(30 May 1949), GATT/CP.3/33, (Exhibit USA-25), pp. 1-3.
229 Statement by the Head of the Czechoslovak Delegation, (Exhibit USA-25), p. 2.
230 Statement by the Head of the Czechoslovak Delegation, (Exhibit USA-25), pp. 2-3.
231 GATT CONTRACTING PARTIES, Third Session, Reply by the Vice Chairman of the US Delegation
(2 June 1949), GATT/CP.3/38, (Exhibit USA-26), pp. 2, 5, 8, and 11.
232 GATT CONTRACTING PARTIES, Third Session, Summary of the twenty-second meeting
(8 June 1949), GATT/CP.3/SR.22, (Exhibit USA-27), p. 4.
233 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), pp.
4-5.
234 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 5.
235 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 6.
236 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 6.
237 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 6.

dealing with a matter of such great importance". 238 The representative of Pakistan expressed the
opinion that "the CONTRACTING PARTIES should suggest that the two governments approach each
other through diplomatic channels and seek a solution". 239 Finally, the representative of Pakistan
concluded stating that, "[i]n view of the importance of the question, the CONTRACTING PARTIES
should not decide upon the request, but should try to bring about an understanding between the
two parties, which was not an objective achievable by deliberations in sub-committees".240
5.19. The representative of the United Kingdom argued that "since the question clearly concerned
Article XXI, the United States action would seem to be justified because every country must be the
judge in the last resort on questions relating to its own security".241 The representative of the United
Kingdom further argued that "the CONTRACTING PARTIES should be cautious not to take any step
which might have the effect of undermining the General Agreement", noting that the nature of the
question suggested that "it should be examined in detail by the two governm ents concerned" and
that "no purpose would be served by a general inquest by the CONTRACTING PARTIES". 242 The
representative of the United Kingdom concluded that the request of Czechoslovakia should be
dismissed.243
5.20. The representative of Czechoslovakia state d that Article XXI was being "misapplied because
the narrow reference in the text to war materials had been construed by the United States
[g]overnment to cover a wide range of goods which could never be so regarded".244
5.21. The representative of the United States replied that "this was a distortion of facts", explaining
that the United States government had never denied export licences on goods that were placed on
a "positive list", and that only 200 group items out of 3,000 were subject to export controls.245 The
representative of the United States thus concluded that "there were no grounds for the accusation
that the provisions of Article XXI were extended to cover everything; for the commodities thus
controlled constituted an extremely small proportion of the exports of the country".246
5.22. Summing up the debate, the Chairperson concluded that, for the purposes of Article XXIII of
the GATT 1947, it should be understood that consultations under paragraph 1 of the provision "had
already taken place". 247 The Chairpers on further noted that, pursuant to Article XXIII:2 of the
GATT 1947, "the CONTRACTING PARTIES should promptly investigate, and should either make an
appropriate recommendation to the contracting parties concerned or give a ruling on the matter as
appropriate".248 The Chairperson stated that "[t]he complaint made by Czechoslovakia was based
on Articles I and XXI and the United States justified any discrimination which might have occurred
on the basis of Articles XX and XXI and particularly on the ground of se curity covered by the
latter".249 The Chairperson took note of the lack of support for a proposal to set up a Working Party
to examine the issue.250
5.23. The Chairperson thus stated that the "CONTRACTING PARTIES … should give a decision in
accordance with paragraph 2 of Article XXIII".251 The Chairperson noted that the representative of
Czechoslovakia had posed the question on the consistency of the contested regulations with Article I
of the GATT 1947.252 The Chairperson was however of the opinion that the question was not

238 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), pp.
6-7.
239 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 7.
240 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 7.
241 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 7.
242 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), pp.
7-8 and Corrigendum.
243 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 8
and Corrigendum.
244 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 8.
245 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 8.
246 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 8.
247 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 8.
248 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 8.
249 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 8.
250 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), pp.
8-9.
251 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 9.
252 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 9.

appropriately put in light of the United Sates' defence under Articles XX and XXI of the GATT 1947.253
According to the Chairperson, the question should be put as "whether the [g]overnment of the
United States had failed to carry out its obligations under the Agreement through its administration
of the issue of export licenses".254
5.24. A vote took place with Cz echoslovakia being the only contracting party voting in the
affirmative.255 Seventeen delegations voted in the negative, three abstained, and two were
absent.256
5.25. The representative of Pakistan explained his vote holding that "the charge … was not proved
by factual evidence".257
5.26. The representative of Czechoslovakia stated that his government "could not consider that the
CONTRACTING PARTIES had made a legally valid decision or correct interpretation of the General
Agreement".258 He further "enquired whether the decision could not be communicated to all
members of the Interim Commission for the International Trade Organization, so that they would be
informed of the interpretation given by the CONTRACTING PARTIES of the provisions of the Havana
Charter".259
5.27. The representative of the United States "expressed his understanding of the position of those
representatives who abstained".260
5.28. In response to the request of the representative of Czechoslovakia, the Chairperson stated
that "the summary record of [the] meeting wou ld be sent, according to the usual practice, to all
signatories of the Havana Final Act and to other members of the United Nations".261
5.29. Volume II of the "Basic Instruments and Selected Documents of the Contracting Parties to
the GATT" published in 1952, Par t II (Decisions, Declarations, Resolutions and Rulings), includes a
reference to the 1949 Decision, as follows262:
ARTICLE XXI
United States Export Restrictions[2]
Decision of 8 June 1949
The CONTRACTING PARTIES decided to reject the contention of the Czechoslovak
delegation that the Government of the United States had failed to carry out its
obligations under the Agreement through its administration of the issue of export
licences.
2 A complaint was brought by the Czechoslovak Government under Articles I and XXI that export
restrictions imposed by the United States did not conform to the provisions of Article I.
5.30. In this dispute, the United States argues that, with the 1949 Decision, the CONTRACTING
PARTIES rejected Czechoslovakia's challenge, finding that the invocation by the United States of the

253 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 9.
254 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 9.
255 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 9.
256 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 9.
257 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p. 9.
258 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p.
10.
259 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p.
10.
260 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p.
10.
261 Summary of the meeting of the GATT CONTRACTING PARTIES (8 June 1949), (Exhibit USA-27), p.
10.
262 GATT, Basic Instruments and Selected Documents, Volume II (Decisions, Declarations, Resolutions,
Rulings and Reports), May 1952, (Exhibit USA-28), pp. 1-3.

security exceptions was "not justiciable". 263 According to the United States, various participants at
the meeting "expressed the view that Article XXI is self -judging".264 The United States notes that
the Chairperson opined that the question as raised by Czechoslovakia – whether the United States'
measures were in conformity with Article I of the GATT 1947 – "was not appropriately put", in light
of the United States' invocation of the security exceptions.265 The Chairperson stated that the
question should rather be whether the United States "had failed to carry out its obligations" under
the GATT 1947.266 According to the United States, the reformulation of the question is an indication
that the relevant question was a broader one: whether the United States had any obligations under
the GATT 1947 given its invocation of Article XXI.267
5.31. The United States also refers to the fact that, after the vote, the representative of
Czechoslovakia requested "whether the decision could not be communicated to all members of the
Interim Commission of the [ITO], so that they would be informed of the interpretation given by the
CONTRACTING PARTIES of the provisions of the Havana Charter". 268 The United States notes that
no contracting party disagreed with that statement.269
5.32. China argues that at no point in the debate did any of the participants express the
understanding that the question to be decided concerned the interpretation of Article XXI(b) of the
GATT 1947 in general, as opposed to the resolution of a specific dispute between two parties. 270
China also argues that all three contracting parties that explained their reasons for voting against
Czechoslovakia's claim (Cuba, Pakistan, and the United Kingdom) placed emp hasis on the factual
nature of the dispute between Czechoslovakia and the United States.271 China further notes that no
contracting party (including the United States) took the position that, by invoking the security
exceptions, the United States "had broug ht the matter to an end". 272 On the contrary, China
maintains that the United States felt compelled to demonstrate that its measures were "within the
specific exceptions provided by the GATT".273 According to China, "[h]ad the [c]ontracting [p]arties
agreed in 1949 that Article XXI(b) should be interpreted and applied, in all cases, in the manner that
the United States now advocates in the present dispute, the United States could simply have invoked
Article XXI(b) without any need to demonstrate the applicabi lity of one of the specified
exceptions".274
5.2 Assessment by the Panel
5.33. The Panel notes that the parties disagree on the relevance of the 1949 Decision as a
"subsequent agreement" pursuant to Article 31(3)(a) of the Vienna Convention, to be taken into
account, together with the context, when interpreting Article XXI of the GATT 1994. The parties
further express diverging views regarding the possible qualification of the 1949 Decision as being
one of the "other decisions of the CONTRACTING PARTIES" under Paragra ph 1(b)(iv) of the
GATT 1994.
5.34. Article 31(3)(a) of the Vienna Convention reads:
Article 31
General rule of interpretation
… 3. There shall be taken into account, together with the context:

263 United States' first written submission, para. 47.
264 United States' first written submission, para. 50.
265 United States' response to Panel question No. 64.
266 United States' response to Panel question No. 64.
267 United States' response to Panel question No. 64.
268 United States' opening statement at the first meeting of the Panel, para. 25. (emphasis original)
269 United States' opening statement at the first meeting of the Panel, para. 25.
270 China's response to Panel question No. 67.
271 China's second written submission, para. 103, fn 55.
272 China's second written submission, para. 103.
273 China's opening statement at the first meeting of the Panel, para. 67.
274 China's opening statement at the first meeting of the Panel, para. 68.

(a) any subsequent agreement between the parties regarding the interpretation of the
treaty or the application of its provisions
5.35. To qualify as a subsequent agreement, a decision must meet two conditions: (i) it is adopted
subsequent to the relevant covered agreement; and (ii) its terms and contents express an
agreement between Members on the interpretation of a treaty or the application of its provisions.275
The Panel is not persuaded that the 1949 Decision meets either of these two conditions for the
following reasons.
5.36. Concerning the temporal dimension, the pro vision at issue is Article XXI of the GATT 1994,
which is an agreement that is "legally distinct" from the GATT 1947 pursuant to Article II:4 of the
WTO Agreement.276 The document under review was a decision adopted in 1949 by the GATT
CONTRACTING PARTIES a s opposed to the WTO Members, and dealt with the application of a
provision of the GATT 1947, and not the GATT 1994.277 As such, the Panel does not consider the
1949 Decision to be "subsequent" to the GATT 1994.
5.37. In addition to occurring prior to the GATT 1994, there are indications that the 1949 Decision
does not express an "agreement" on the interpretation or the application of Article XXI of the
GATT 1994. The 1949 Decision under review is the outcome of a process in which the views of the
parties concerned were discussed and examined in a plenary meeting of the CONTRACTING PARTIES,
and eventually a decision was taken by means of a vote. The minutes of the meeting do not report
a shared understanding by the participants on broader interpretive questions con cerning the
invocation of the security exceptions, nor do those minutes reflect the notion put forward by the
United States in this dispute that the invocation of the security exceptions would be entirely "self -
judging". The Panel further notes that the vo te was not unanimous, with Czechoslovakia voting to
uphold its challenge, three delegations abstaining and two being absent. The explicit disagreement
of at least one of the participants to the meeting with the majority indicates the absence of an
"agreement" for the purposes of Article 31(3)(a) of the Vienna Convention.
5.38. The Panel is therefore of the view that the 1949 Decision does not meet the conditions to be
considered as a "subsequent agreement" under Article 31(3)(a) of the Vienna Convention for the
interpretive issues raised in this dispute.
5.39. The Panel now turns to whether the 1949 Decision could be considered as one of the
"decisions" referred to in Paragraph 1(b)(iv) of the GATT 1994 and Article XVI:1 of the
WTO Agreement.
5.40. Paragraph 1(b)(iv) of the GATT 1994 provides:
1. The General Agreement on Tariffs and Trade 1994 ("GATT 1994") shall consist of: …
(b) the provisions of the legal instruments set forth below that have entered into force
under the GATT 1947 before the date of entry into force of the WTO Agreement: …
(iv) other decisions of the CONTRACTING PARTIES to GATT 1947.
5.41. Article XVI:1 of the WTO Agreement reads:
Article XVI
Miscellaneous Provisions
1. Except as otherwise provided under this Agreement or the Multilateral Trade
Agreements, the W TO shall be guided by the decisions, procedures and customary
practices followed by the CONTRACTING PARTIES to GATT 1947 and the bodies
established in the framework of GATT 1947.

275 See Appellate Body Report, US – Clove Cigarettes, para. 262.
276 See para. 1.1 above.
277 See Panel Report, Australia – Tobacco Plain Packaging, para. 7.3008.

5.42. The Panel observes that decisions of the CONTRACTING PARTIES to GATT 1947 under
Article XVI:1 of the WTO Agreement "provide guidance" to the WTO, whereas the "other decisions"
mentioned in Paragraph 1(b)(iv) of the GATT 1994 are an integral part of the GATT 1994.278
5.43. The Panel recalls that the 1949 Decision was made in response to a request filed by
Czechoslovakia under Article XXIII:2 of the GATT 1947, the provision in that agreement regulating
the resolution of controversies between contracting parties. The provision establishes that, once a
matter was raised, "the CONTRACTING PARTIES … shall make appropriate recommendations to the
contracting parties which they consider to be concerned, or give a ruling on the matter, as
appropriate". The provision thus clarifies tha t recommendations or rulings issued by the
CONTRACTING PARTIES were limited to the issue raised in a specific controversy and directed at the
contracting parties concerned. The Panel does not consider that the 1949 Decision, which was taken
under Article XXIII:2 of the GATT 1947, served the purpose of clarifying the interpretation of the
provisions of the GATT 1947 beyond the framework of that specific dispute.279 The Panel is therefore
not persuaded that the 1949 Decision could be characterized as a relevan t "decision" under
Paragraph 1(b)(iv) of the GATT 1994.
5.44. Furthermore, the 1949 Decision concerned a specific factual situation and does not address
the broader interpretive question as to whether the invocation of Article XXI of the GATT 1994 is
"self-judging" in the sense argued by the United States. In particular, there is no explicit recognition
by the participants that the invocation of the security exceptions could not be reviewed in dispute
settlement. Whereas one participant expressed the view that "e very country must be the judge in
the last resort on questions relating to its own security"280, the debate focused mostly on the factual
circumstances of the controversy between the two disputing parties, and on whether Czechoslovakia
had submitted sufficient evidence to prevail in the dispute. Ultimately, the dispute was resolved by
means of a vote, with Czechoslovakia explicitly indicating its disagreement about the outcome.281
5.45. To the extent that the 1949 Decision could be classified as falling under Article XVI:1 of the
WTO Agreement, the Panel considers that any "guidance" under that provision is limited due to the
specific subject matter considered in that dispute and the lack of indication in the minutes of the
meeting on the general interpretive question concerning the reviewability of the security exceptions.
5.46. Based on the foregoing, the Panel concludes that the 1949 Decision does not provide relevant
interpretive guidance for the purposes of the issues raised in this dispute under Article XXI of the
GATT 1994.
6 DECISION OF THE GATT CONTRACTING PARTIES CONCERNING ARTICLE XXI OF THE
GATT 1947 (1982)
6.1 Arguments and materials submitted by the parties
6.1. The United States refers to the Decision of the GATT CONTRACTING PARTIES concerning
Article XXI of the GATT 1947 of 30 November 1982 (the 1982 Decision) as a decision falling under
both Paragraph 1(b)(iv) of the GATT 1994 and Article XVI:1 of the WTO Agreement.282
6.2. China arg ues that there are no decisions of the GATT CONTRACTING PARTIES within the
meaning of Paragraph 1(b)(iv) of the GATT 1994 that would be relevant for the purposes of
interpreting and applying Article XXI of the GATT 1994.283 According to China, the 1982 Decision is
a decision within the meaning of Article XVI:1 of the WTO Agreement that is not relevant for the
purposes of this dispute as it did not concern the interpretation of Article XXI, but rather the

278 Previous panels have considered that, in order to qualify as a decision falling under Paragraph
1(b)(iv) of the GATT 1994, a document must be a "formal legal text which represented a legally binding
determination in respect of the rights and/or obligations generally applicable to all contracting parties to
GATT 1947". (See Panel Reports, US – FSC, para. 7.63; Australia – Tobacco Plain Packaging, fn 5900).
279 Even after the contracting parties to the GATT 1947 developed the practice of referring disputes to
panels, adopted panel reports were not considered to be binding "except with respect to resolving the
particular dispute between the parties to that dispute". (Appellate Body Report, Japan – Alcoholic Beverages II,
p. 14).
280 See para. 5.19 above.
281 See para. 5.24 above.
282 United States' response to Panel question No. 25.
283 China's response to Panel question No. 25.

procedures to be followed with regard to measures that the contracting parties considered to be
justified under that provision.284
6.1.1 GATT CONTRACTING PARTIES, Decision Concerning Article XXI of the General
Agreement (30 November 1982)
6.3. The text of the 1982 Decision is reproduced below:
DECISION CONCERNING ARTICLE XXI OF THE GENERAL AGREEMENT
Decision of 30 November 1982
Considering that the exceptions envisaged in Article XXI of the General Agreement
constitute an important element for safeguarding the rights of contracting parties when
they consider that reasons of security are involved;
Noting that recourse to Article XXI could constitute, in certain circumstances, an
element of disruption and uncertainty for international trade and affect benefits accruing
to contracting parties under the General Agreement;
Recognizing that in taking action in terms of the exceptions provided in Article XXI of
the General Agreement, contracting parties should take into consideration the interests
of third parties which may be affected;
That until such time as the CON TRACTING PARTIES may decide to make a formal
interpretation of Article XXI it is appropriate to set procedural guidelines for its
application;
The CONTRACTING PARTIES decide that:
1. Subject to the exception in Article XXI:a, contracting parties should be informed to
the fullest extent possible of trade measures taken under Article XXI.
2. When action is taken under Article XXI, all contracting parties affected by such action
retain their full rights under the General Agreement.
3. The Council may be reques ted to give further consideration to this matter in due
course.285
6.4. The United States argues that the preamble to the 1982 Decision "twice acknowledges the self-
judging nature of Article XXI".286 First, the United States notes that the preamble emphasizes the
importance of Article XXI of the GATT 1947 in safeguarding the rights of the GATT contracting parties
"'when they consider' that reasons of security are involved". 287 Specifically, the United States
maintains that this expression mirrors "the pivotal self -judging phrase" of Article XXI of the
GATT 1947.288 Second, the United States notes that the decision recognizes that "in taking action in
terms of the exceptions provided in Article XXI of the General Agreement, contracting parties should
take into conside ration the interests of third parties which may be affected". 289 According to the
United States, this phrase demonstrates the acknowledgement by the contracting parties that the
decision of whether to take essential security measures is "within the authorit y of each contracting
party".290

284 China's response to Panel question No. 25.
285 GATT CONTRACTING PARTIES, Decision Concerning Article XXI of the General Agreement
(30 November 1982), L/5426, (Exhibit USA-62). (emphasis original)
286 United States' response to Panel question No. 25.
287 United States' response to Panel question No. 25.
288 United States' response to Panel question No. 25.
289 United States' response to Panel question No. 25.
290 United States' response to Panel question No. 25.

6.5. China argues that the 1982 Decision is not relevant for the purposes of this dispute as it did
not concern the interpretation of Article XXI.291 China further argues that the 1982 Decision
"expressly notes" that the contracting parties considered it appropr iate to lay down procedural
guidelines "until such time as the CONTRACTING PARTIES may decide to make a formal
interpretation of Article XXI".292 According to China, this language indicates that the CONTRACTING
PARTIES had not adopted any formal interpretation of Article XXI of the GATT 1947 as of 1982.293
6.2 Assessment by the Panel
6.6. The Panel takes note of the parties ' views on the relevance of the 1982 Decision under
Article XVI:1 of the WTO Agreement and Paragraph 1(b)(iv) of the GATT 1994.
6.7. In the Panel's view, the phrase "[t]he CONTRACTING PARTIES decide" that immediately
precedes the three paragraphs of the 1982 Decision indicates the intention to set forth procedural
guidelines to be followed by all GA TT contracting parties in the application of Article XXI of the
GATT 1947.294 In this respect, the Panel considers that the 1982 Decision could be regarded as a
decision falling under Paragraph 1(b)(iv) of the GATT 1994.295 The Panel is also of the view that, in
any event, the 1982 Decision could be regarded as a decision within the meaning of Article XVI:1 of
the WTO Agreement.
6.8. Regarding the content of the 1982 Decision, the Panel recalls the United States' view that the
1982 Decision acknowledges "the self -judging nature" of Article XXI of the GATT 1994.296 The
United States finds support for this affirmation in two paragraphs of the preamble. 297 The first
paragraph of the preamble recognizes the importance of Article XXI for the safeguard of the
Members' rights "when they consider that reasons of security are involved". The third paragraph
states that, when taking action under Article XXI, a Member should take into consideration the
interests of third parties which may be affected.
6.9. The Panel is not persuaded that the two paragraphs referred to by the United States provide
guidance as to the issue of the reviewability of the invocation of Article XXI of the GATT 1994. There
is no explicit indication in either of the two paragraphs referred to by the United States or elsewhere
in the 1982 Decision that the invocation by a Member of Article XXI cannot be reviewed by a panel
in the context of a dispute. In this regard, the Panel finds it relevant that the 1982 Decision is
concerned with "procedural guidelines" for the application of Article XXI "until such time as the
CONTRACTING PARTIES may decide to make a formal interpretation of Article XXI". The language
used indicates that the 1982 Decision does not constitute a substantive interpretation of the terms
of Article XXI that would preclude review of its invocation in the context of a dispute.
6.10. The procedural nature of the 1982 Decision is underscored by the stipulation in paragraph 2
of the 1982 Decision that, "[w]hen action is taken under Article XXI, all contracting parties affected
by such action retain their full rights under the General Agreement". The Panel considers that the
reference to "full rights under the General Agreement" serves to preserve those rights as reflected
in the terms of the GATT 1947 without further elaboration as to the interpretation or scope of those
rights. In the absence of any explicit indication to the contrary, the Panel finds that the reference to
"full rights under the General Agreement" could admit, and at least does not preclude, the possibility
of having recourse to the dispute settlement provisions under the GATT 1947 and, eventually, the
GATT 1994 and the DSU.
6.11. Accordingly, the Panel does not find any indication in the 1982 Decision that Article XXI of the
GATT 1994 should be understood as an entirely "self-judging" provision in the sense argued by the
United States in this dispute.

291 China's response to Panel question No. 25.
292 China's response to Panel question No. 25.
293 China's response to Panel question No. 25.
294 Pursuant to Article XXV:1 of the GATT 1994, "[w]herever reference is made in this Agreement to the
contracting parties acting jointly they are designated as the CONTRACTING PARTIES".
295 See fn 278 above.
296 United States' response to Panel question No. 25.
297 United States' response to Panel question No. 25.

7 VIEWS OF THE GATT CONTRACTING PARTIES IN CONNECTION WITH PRIOR
INVOCATIONS OF ARTICLE XXI OF THE GATT 1947
7.1 Arguments and materials submitted by the parties
7.1. The United States argues that the GATT contracting parties repeatedly expressed the view that
Article XXI(b) is "self-judging" and that the GATT was not the appropriate forum in which to resolve
disputes concerning matters of natio nal security. 298 According to the United States, the views
expressed by the GATT contracting parties do not have a particular status under Articles 31 and 32
of the Vienna Convention, but can inform or support the meaning of Article XXI of the GATT 1994
as interpreted according to the customary rules of public international law.299
7.2. China argues that views previously expressed by the GATT contracting parties concerning
Article XXI of the GATT 1947 have no interpretive significance under the accepted principles of treaty
interpretation.300 In any event, China maintains that the views mentioned by the United States
reveal the absence of a common understanding among the GATT contracting parties concerning the
meaning of Article XXI of the GATT 1947.301
7.1.1 Ghana's reference to measures taken pursuant to Article XXI in the context of the
accession of Portugal to the GATT
7.3. At a meeting held on 9 December 1961 to consider the draft protocol of accession to the GATT
of Portugal, the representative of Ghana stated that his government maintained a ban on goods
coming into Ghana from Portugal. 302 The representative of Ghana stated that this measure was
justified under Article XXI of the GATT 1947 under which "each contracting party was the sole judge
of what was necessary in its essential security interests" and therefore there could be no objection
to Ghana's measure.303 The representative of Ghana maintained that "the situation in Angola was a
constant threat to the peace of the African continent and that any action which, by bringing pressure
to bear on the Portuguese Government, might lead to a lessening of this danger, was therefore
justified in the essential security interests of Ghana". 304 No contracting party commented on the
statement made by the representative of Ghana. The Chairperson affirmed that the statement made
by the representative of Ghana on the invocation of Article XXI would be noted.305
7.4. The United States argues that the exchange between Ghana and the Chairperson, combined
with the "acceptance" by other contracting parties of Ghana's invocation of Article XXI of the
GATT 1947, shows that the contracting parties viewed Article XXI as "self-judging".306
7.5. China does not comment on Ghana's reference to Article XXI.
7.1.2 The United Arab Republic's reference to Article XXI in the context of its accession
to the GATT
7.6. The 1970 report of the Working Party on the accession of the United Arab Republic to the GATT
sets out a discussion regarding measures adopted by the acceding government imposing a direct
boycott against Israel and indirect forms of boycott targeting third-country firms and persons having
business ties with Israel.307 The representative of the United Arab Republic stated that direct boycott

298 United States' first written submission, para. 106.
299 United States' response to Panel question Nos. 69-70.
300 China's opening statement at the first meeting of the Panel, para. 70; response to Panel questions
No. 69-70.
301 China's response to Panel questions No. 69-70.
302 GATT CONTRACTING PARTIES, Nineteenth Session, Summary Record of the Twelfth Session
(9 December 1961), SR.19/12, (Exhibit USA-57), p. 196.
303 Summary of the meeting of the GATT CONTRACTING PARTIES (9 December 1961), (Exhibit USA-57),
p. 196.
304 Summary of the meeting of the GATT CONTRACTING PARTIES (9 December 1961), (Exhibit USA-57),
p. 196.
305 Summary of the meeting of the GATT CONTRACTING PARTIES (9 December 1961), (Exhibit USA-57),
p. 196.
306 United States' first written submission, para. 108.
307 GATT CONTRACTING PARTIES, Twenty-Sixth Session, Report by the Working Party on Accession of
the United Arab Republic (25 February 1979), L/3362, (Exhibit USA-58), para. 18.

measures would not entail any inconsistency with the GATT 1947, as the Government of the United
Arab Republic intended, upon accession, to resort to Article XXXV of the GATT 1947 (i.e. the non-
application clause) vis-à-vis Israel.308 Concerning the secondary boycott, some members of the
Working Party "reserved all rights, under GATT or otherwise". 309 The representative of the United
Arab Republic noted that the measures adopted were related to the "extraordinary circumstances"
existing in the Middle East at that time. 310 In light of the political character of the issue, the
representative of the United Arab Republic indicated that his government did not wish to discuss it
within the GATT. 311 Other members of the Working Party sup ported the views expressed by the
representative of the United Arab Republic that the background of the measures was political and
not commercial.312 The representative of Israel stated that she would not reply to the political issues
raised, as they were being discussed in the competent organs of the United Nations.313
7.7. The United States argues that the fact that several members of the Working Party supported
the United Arab Republic's position that the background of the measures was "political and not
commercial" indicates that the GATT contracting parties viewed Article XXI of the GATT 1947 as
"self-judging".314
7.8. China does not comment on the report of the Working Party on the accession of the United
Arab Republic to the GATT.
7.1.3 Invocation of Article XXI of the GATT 1947 by the European Communities, Canada,
and Australia in relation to certain measures affecting Argentina
7.9. In 1982, in relation to the situation between the United Kingdom and Argentina relating to the
Falkland Islands (Islas Malvinas), the European Communities (and its member states), Canada, and
Australia adopted certain measures affecting Argentina.
7.10. On 4 May 1982, the European Communities, Australia, and Canada issued a communication
to the GATT contracting parties announcing that they had taken certain measures "on the basis of
their inherent rights of which Article XXI of the [ GATT 1947] is a general reflection". 315 The three
contacting parties further expressed the hope that "the situation … will soon be satisfactorily resolved
by appropriate negotiations elsewhere".316
7.11. Argentina brought the matter for discussion in the GATT and a GATT Council meeting was
held to discuss the matter on 7 May 1982. In raising the matter, the representative of Argentina
argued that the measures "were based on reasons of a political nature and were meant to exert
political pressure on the sovereign decisions of Argentina in order to intervene in a conflict in which
only one of the countries concerned was involved".317 The representative of Argentina further argued
that the measures were not justified under the GATT 1947, and specifically not under Article XXI.318
7.12. The representative of the European Communities stated that the European Communities and
its member states had taken the contested measures based on their "inherent rights, of which
Article XXI of the [ GATT 1947] was a reflection". 319 According to the representative of the
European Communities, the exercise of these rights "required neithe r notification, justification nor
approval" and the practice of the GATT contracting parties over the preceding 35 years showed that
every contracting party was "the judge of its exercise of these rights".320 Finally, the representative

308 Working Party Report on Accession of the United Arab Republic, (Exhibit USA-58), para. 19.
309 Working Party Report on Accession of the United Arab Republic, (Exhibit USA-58), para. 20.
310 Working Party Report on Accession of the United Arab Republic, (Exhibit USA-58), para. 22.
311 Working Party Report on Accession of the United Arab Republic, (Exhibit USA-58), para. 22.
312 Working Party Report on Accession of the United Arab Republic, (Exhibit USA-58), para. 23.
313 Working Party Report on Accession of the United Arab Republic, (Exhibit USA-58), para. 24.
314 United States' first written submission, para. 110.
315 European Communities, Australia, and Canada, "Trade Restrictions Affecting Argentina Applied for
Non-Economic Reasons" (Revision), Communication to GATT contracting parties (4 May 1982), L/5319/Rev.1,
(Exhibit USA-60), para. 1.
316 Communication of the European Communities, Australia, and Canada to GATT contracting parties
(4 May 1982), (Exhibit USA-60), para. 2.
317 GATT Council, Minutes of the Meeting (7 May 1982), C/M/157, (Exhibit USA-59), p. 2.
318 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 4.
319 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 10.
320 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 10.

of the European Communities expressed the hope that "appropriate negotiations elsewhere" would
promptly allow for the settlement of the situation.321
7.13. The representative of Canada maintained that his government took action in light of a
resolution of the UN Security Council, that the measures were to be seen as a "political response to
a political issue", and that the GATT "had neither the competence nor the responsibility to deal with
the political issue which had been raised". 322 Accordingly, the representative of Canada stated that
his delegation could not accept the notion that there had been a violation of the GATT 1947.323 The
representative of Canada added that Article XXI of the GATT 1947 did not define "essential security
interests", nor did it mention notification.324
7.14. The representative of Australia maintained that it was inappropriate to enter a debate
regarding the "political aspect" of the matter. 325 The representative of Australia stated that the
measures were in conformity with Article XXI(c) of the GATT 1947, "which did not require notification
or justification".326
7.15. Other GATT contracting parties took the floor at the meeting, expressing various views in
support of the positions of either Argentina or the contracting parties that had adopted the measures
discussed at the meeting.327
7.16. Certain GATT contracting parties made interventions referring explicitly to Article XXI of the
GATT 1947. The representative of Brazil stated that the case could set a dangerous precedent if the
measures at issue were considered necessary for the protection of essential security interests in
time of war or other international emergency, because "such interests had not been
demonstrated".328 The representative of Brazil added that while the matter could be considered to
constitute an emergency in international relations, "this was the case only in respect of the region
in question", as defined by the UN Security Council. 329 The representative of Brazil further stated
that the actions of the UN Security Council "had a bearing on the GATT in the light of paragraph (c)
of Article XXI".330 The representative of Brazil maintained that it was difficult for his delegation to
accept that the countries adopting the measures, "except one", were taking action to protect their
essential security interests.331 Later in the debate, the representative of Brazil took the floor again
to invite the Council to "reflect more deeply about the interpretation of Article XXI", and raised the
question of whether actions taken under Article XXI fell outside the scope of Article XXIII.332
7.17. The representative of Spain argued that, in his view, the United Kingdom could find
justification for its action under Article XXI(b)(iii) of the GATT 1947, but he had doubt concerning
the action taken by other contracting parties which were not "in the same position vis -à-vis
Argentina".333
7.18. The representative of Cuba argued that Article XXI of the GATT 1947 "did not provide legal
grounds" for the measures adopted by the European Communities, Canada, and Australia.334
7.19. The representative of the Philippines noted that he was under the im pression that the
European Communities and its member states, Canada, and Australia had taken measures "as their
inherent rights, of which Article XXI of the GATT was a reflection". 335 Since the

321 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 10.
322 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 10.
323 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 10.
324 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), pp. 10-11.
325 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 11.
326 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 11.
327 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), pp. 2-13.
328 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 5.
329 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 5.
330 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 5.
331 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 5.
332 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 12
333 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 6.
334 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 6.
335 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 7.

European Communities was not a contracting party to the GATT, the representative of the Philippines
"wondered about its inherent rights".336
7.20. The representative of Pakistan intervened in support of Argentina, noting that the GATT only
permitted the suspension of obligations in situations of "extreme urgency", and that the situation in
question was not an "extreme emergency in international relations".337
7.21. The representative of Singapore considered that "the wording of Article XXI allowed a
contracting party the right to determine the need for protection of its essential security interests".338
At the same time, the representative of Singapore " saw a danger in the broad interpretation which
Article XXI permitted".339
7.22. The representative of the United States argued that "the GATT had never been the forum for
resolution of any disputes whose essence was security and not trade, and that for good reasons,
such disputes had seldom been discussed in the GATT, which had no power to resolve political or
security disputes".340 According to the representative of the United States, the "GATT, by its own
terms, left it to each contracting party to judge what was necessary to protect its essential security
interests in time of international crisis". 341 The representative of the United States concluded that
the matter fell outside the sphere of competence of the GATT.342
7.23. The representative of Hungary stated that "the security considerations under Article XXI of
the General Agreement were within the realm of the individual contracting parties", and that this
type of provision should therefore be "handled with great care".343
7.24. The representative of Poland argued that his delegation did not consider that the measures
could be justified under Article XXI, "whose purpose was to give a contracting party the right to
defend its legitimate interests in case of serious danger and not to punish another contracting party
for actions which were hardly of an economic nature".344 The representative of Poland also took the
view that Article XXI was subject to the provision of Article XXIII:2 of the GATT 1947.345
7.25. The representatives of India, New Zealand, Singapore, the United States, and Zaire held the
view that the GATT was not the appropriate forum to deal with the matter.346
7.26. The Chairperson noted that the parties expressed "differing views as to whether the trade
measures in question violated GATT obligations, as to whether the measures were based on inherent
or natural rights and whether justification, notification and/or approval were necessary". 347 The
Chairperson then suggested, "in light of th e utmost importance of the subject", that the matter
remain open and be kept on the agenda of the Council.348
7.27. The GATT Council continued its discussion on the matter at a meeting held on 29 -
30 June 1982. At the meeting, the contracting parties specifically discussed a proposal by the
representative of Argentina that the Council, acting by consensus, "pronounce itself in the form of a
note interpreting Article XXI so that all contracting parties would know their rights and obligations"
under the GATT 1947.349 The following is an excerpt from the minutes of the meeting reporting the
view of the representative of Argentina:
That note would enable the contracting parties firstly, to know whether Article XXI
exempted contracting parties from any obligation regarding notification and surveillance

336 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 7.
337 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 7.
338 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 7
339 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 7.
340 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 8.
341 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 8.
342 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 8.
343 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 8
344 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 9.
345 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 9.
346 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), pp. 5, 7, 8, and 9.
347 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 13.
348 GATT Council, Minutes of the Meeting (7 May 1982), (Exhibit USA-59), p. 13.
349 GATT Council, Minutes of the Meeting (29-30 June 1982), C/M/159, (Exhibit USA-61), p. 15.

procedures when measures taken under its provisions affected the trade of another
contracting party; secondly, to determine the natural rights which could be inherent for
contracting parties and had been invoked in relation to Article XXI in general; thirdly,
to establish whether any contracting party, including one not involved in a problem
between two other contracting parties, could interpret per se that there existed an
emergency in international relations as referred to in Article XXI:(b)(iii) and
consequently take unilateral trade measures; fourthly, whether one or more contracting
parties could take action under Article XXI(c) without the prior existence of a specific
provision adopted by the United Nations authorizing the application of restrictive trade
measures.350
7.28. The representatives of the European Communities recalled his statement at the previous
meeting.351 The representative of Canada expressed surprise that there had been no reference to
an earlier invocation of Article XXI by Ghana.352 According to the representative of Canada, on that
occasion the notion of national security was interpreted in a broad sense by the government of
Ghana and there had been no challenge to it. 353 The representative of Canada further st ated that
many contracting parties had previously taken similar action and no notification had been provided
or requested.354 The representative of Australia reiterated the position already expressed at the
previous meeting.355 He argued that only the CONTRACTING PARTIES acting jointly could interpret
the GATT 1947 and that, given the infrequent use of Article XXI until that moment, he had doubts
that there was a need for an interpretation of that provision.356
7.29. The representatives of Brazil, Colombia, Cuba, Dominican Republic, Ecuador (observer),
India, Nigeria, Peru, the Philippines, Romania, Spain, Venezuela (observer), Uruguay, and
Yugoslavia supported the proposal made by the representative of Argentina for a note interpreting
Article XXI of the GATT 1947.357
7.30. The representative of the United States argued that the GATT had no role in a crisis of military
force and left to each contracting party the judgment as to what it considered to be necessary for
its security interests.358
7.31. The representative of th e United Kingdom, speaking for Hong Kong, China, stated that the
Council should avoid political discussions.359 The representatives of Japan, New Zealand, and Norway
expressed similar views.360
7.32. The Chairperson noted that the contracting parties held differing views with regard to the
need for a note interpreting Article XXI of the GATT 1947.361 He suggested that the representatives
continue to consider the matter and engage in consultations, and that the Council revert to the item
at its next meeting.362
7.33. Eventually, the CONTRACTING PARTIES adopted the 1982 Decision in relation to these
discussions.363
7.34. In this dispute, the United States argues that views expressed in connection with the
invocation of Article XXI of the GATT 1947 by the European Communities, Canada, and Australia
further confirm that Article XXI is "self-judging" by the acting Member.364

350 GATT Council, Minutes of the Meeting (29-30 June 1982), (Exhibit USA-61), p. 16.
351 GATT Council, Minutes of the Meeting (29-30 June 1982), (Exhibit USA-61), p. 16.
352 GATT Council, Minutes of the Meeting (29-30 June 1982), (Exhibit USA-61), p. 18.
353 GATT Council, Minutes of the Meeting (29-30 June 1982), (Exhibit USA-61), p. 18.
354 GATT Council, Minutes of the Meeting (29-30 June 1982), (Exhibit USA-61), p. 18.
355 GATT Council, Minutes of the Meeting (29-30 June 1982), (Exhibit USA-61), p. 19.
356 GATT Council, Minutes of the Meeting (29-30 June 1982), (Exhibit USA-61), p. 19.
357 GATT Council, Minutes of the Meeting (29-30 June 1982), (Exhibit USA-61), pp. 17-18.
358 GATT Council, Minutes of the Meeting (29-30 June 1982), (Exhibit USA-61), p. 19.
359 GATT Council, Minutes of the Meeting (29-30 June 1982), (Exhibit USA-61), p. 20.
360 GATT Council, Minutes of the Meeting (29-30 June 1982), (Exhibit USA-61), p. 20.
361 GATT Council, Minutes of the Meeting (29-30 June 1982), (Exhibit USA-61), p. 21.
362 GATT Council, Minutes of the Meeting (29-30 June 1982), (Exhibit USA-61), p. 22.
363 See para. 6.3 above.
364 United States' first written submission, para. 119.

7.35. China does not comment on the i nvocation of Article XXI of the GATT 1947 by the
European Communities, Canada, and Australia in relation to certain measures affecting Argentina.
7.1.4 Invocation of Article XXI of the GATT 1947 by the United States in relation to
certain measures affecting Nicaragua
7.36. At a meeting held on 29 May 1985, the representative of Nicaragua asked the GATT Council
to "condemn the trade embargo and other restrictive measures" adopted by the United States.365
According to Nicaragua, the measures taken by the United States were inconsistent with certain
provisions of the GATT 1947.366 The representative of the United States argued that his government
took measures for national security reasons that fell within Article XXI(b)(iii) of the GATT 1947.367
According to the representative of the United States, his delegation did not intend to debate the
matter in the GATT Council or any other GATT body "since GATT was not the appropriate body for
debating political and security issues".368 The representative of the United States further argued that
Article XXI left to each contracting party the judgmen t of any action "which it considers necessary
for the protection of its essential security interests". 369 In this respect, the representative of the
United States noted that his delegation took a similar position in prior instances.370 According to the
representative of the United States, "[i]t was not for GATT to approve or disapprove the judgement
made by the United States as to what was necessary to protect its national security interests; GATT
was a trade organization, and had no competence to judge such matters".371
7.37. The representative of Cuba maintained that "recourse to Article XXI had to be backed by
certain facts, otherwise there would be no effective guarantees for any contracting party against
abuse of the General Agreement".372
7.38. The representative of B razil expressed his government's understanding that "the right to
invoke security reasons under Article XXI should only be exercised in the light of other international
obligations such as those assumed under the UN Charter".373
7.39. The representative of Chile argued that "resort to Article XXI should be qualified by the
contracting party invoking it" and that "the Article did not imply that the trade consequences of
measures taken under it could not be discussed in GATT".374
7.40. The representative of Spain argued that the United States' measures could not be justified
under the provisions of Article XXI of the GATT 1947.375
7.41. The representative of Sweden maintained that "[w]hereas it had to be up to each country to
define its essential securi ty interests under Article XXI, contracting parties should be expected to
exercise their rights under that Article with utmost prudence". 376 The representative of Sweden
argued that in the case under discussion, "Sweden considered that the United States had not shown
the necessary prudence but had chosen to give a too far -reaching interpretation to Article XXI".377
The representative of Sweden finally expressed the hope that efforts be undertaken elsewhere with
the aim of bringing about a mutually acceptable solution to the dispute.378
7.42. The representative of Czechoslovakia contested the interpretation of Article XXI advanced by
the United States. According to the representative of Czechoslovakia, "[i]f the US interpretation of
Article XXI were to be accepted, any contracting party wanting to justify introduction of certain trade
measures against any other contracting party could simply refer to Article XXI and declare that its

365 GATT Council, Minutes of the Meeting (29 May 1985), C/M/188, (Exhibit USA-63), p. 2.
366 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 4.
367 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 4.
368 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 4.
369 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 4.
370 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 4.
371 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 5.
372 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 5.
373 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), pp. 7-8.
374 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 8.
375 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 9.
376 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 10.
377 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 10.
378 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 10.

security was threatened".379 The representative of Czechoslovakia expressed the view tha t none of
the provisions in Articles XXI(b)(i)-(iii) of the GATT 1947 were relevant in the case under discussion,
and therefore there was no legal basis to justify the action taken by the United States.380
7.43. The representative of India argued that a contracti ng party having recourse to
Article XXI(b)(iii) of the GATT 1947 "should be able to demonstrate a genuine nexus between its
security interests and the trade action taken", and that "the security exception should not be used
to impose economic sanctions for non-economic purposes".381 According to the representative of
India, the United States had not established such a nexus, and therefore the measures under
discussion were not in conformity with the GATT 1947.382
7.44. The representative of Finland expressed the belief that "contracting parties should exercise
utmost prudence when invoking Article XXI".383 With regard to the specific case at issue, the
representative of Finland "doubted whether a balance had been observed between prudence, the
measures taken, and their effects on the multilateral trading system". 384 The representative of
Finland expres sed the hope that efforts to bring about a mutually acceptable solution would be
undertaken elsewhere.385
7.45. The representative of Switzerland recognized that Article XXI "gave overriding weight to the
judgement of the contracting parties invoking the Article" .386 The representative of Switzerland
added that his delegation also considered that "in light of the particular character of Article XXI, any
contracting party intending to have recourse to it should take particular care to avoid any harmful
erosion of th e [ GATT 1947] and any deterioration of the climate of international economic
cooperation".387
7.46. The representative of Egypt expressed the view that Article XXI should be invoked "in a limited
manner and with great prudence".388
7.47. The representative of Canada arg ued that the United States had the right to invoke the
provisions of the GATT 1947 that it considered to be relevant, and at the same time Nicaragua
retained its rights under the GATT 1947.389 The representative of Canada further noted that "this
was fundamentally not a trade issue, but one which could only be resolved in a context broader than
GATT".390
7.48. The representative of Australia argued that "the United States was permitted under Article XXI
of the [GATT 1947] to take action of this kind with no requirement to justify such action".391
7.49. The representative of the European Communities held the view that "GATT had never had the
role of settling disputes essentially linked to security", and that "the [ GATT 1947] left to each
contracting party the task of judging what was necessary to protect its essential security
interests".392
7.50. The repre sentative of Norway "endorsed the view of the representative of the European
Communities that contracting parties should show responsibility, discernment and moderation when
resorting to Article XXI, and that discretion did not mean arbitrary application".393

379 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 10.
380 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 10.
381 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 11.
382 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 11.
383 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 11.
384 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 11.
385 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 11.
386 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 11.
387 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 11.
388 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 12.
389 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 12.
390 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 12.
391 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 13.
392 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 13.
393 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 14.

7.51. The representative of Iceland "did not question the sovereign right of every contracting party
to decide whether or when the provisions of Article XXI should be invoked".394 He further expressed
the hope that "efforts undertaken elsewhere" would contribute to resolve the matter.395
7.52. The representative of Portugal argued that " Article XXI did provide for exceptions based on
national security, and it was up to the contracting party invoking Article XXI to determine what was
necessary in this regard".396
7.53. The re presentative of Nicaragua maintained that "[i]t seemed that no delegation had
separated the provisions of Article XXI from the provisions of the UN Charter, and none had denied
that Nicaragua retained its full rights under Article XXIII".397
7.54. The delegation of Nicaragua circulated a draft decision condemning the measures adopted by
the United States and urging the parties to resort to dispute settlement .398 The representatives of
the United States and the European Communities criticized the draft de cision and saw no utility in
the recourse to dispute settlement to settle the matter.399
7.55. The Council took note of the statements made and noted that the Chairperson would consult
with delegations to determine how the matter could be dealt with at a subseque nt Council
meeting.400
7.56. At a GATT Council meeting held on 12 March 1986, a panel was established under
Article XXII:2 of the GATT 1947.401 Pursuant to the agreed terms of reference, "the Panel [could
not] examine or judge the validity of or motivation for the invocation of Article XXI(b)(iii) [of the
GATT 1947] by the United States".402 The Panel concluded that "as it was not authorized to examine
the justification for the United States' invocation of a general exception to the obligations under the
[GATT 1947], it could find the United States neither to be complying with its obligations under the
[GATT 1947] nor to be failing to carry out its obligations under that Agreement".403
7.57. A meeting of the GATT Council was held on 5-6 November 1986. A discussion took place, with
the contracting parties holding differing views with regard to the interpretation of Article XXI of the
GATT 1947. Whereas the representatives of the United States and the European Communities made
statements recognizing that contracting parties ha d the right to determine their own national
security interests 404, other contracting parties expressed opposite views. For instance: (i) the
representative of Nigeria argued that "Article XXI could be invoked only in cases of a state of war or
emergency; neither was the case regarding the US embargo";405 (ii) the representative of Argentina
argued that " Article XXI had been improperly invoked by the United States"406; (iii) the
representative of Sweden argued that panels should be able to examine all relevant GATT articles,
including Article XXI, and that "to restrict a panel's examination of measures taken in the context of
Article XXI was to risk an erosion of faith in GATT's rules" 407; (iv) the representative of Cuba
maintained that "the use of Article XXI by one contracting party to punish another should not be
acceptable"408; (v) the representative of Czechoslovakia argued that the Panel's conclusion
confirmed that "if interpretation of Article XXI were reserved entirely to the contracting party
invoking it, that Article would often be used for purposes other than those for which it was intended"
and that, in his view, the measures adopted by the United States did not conform with Article XXI

394 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 14.
395 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 14.
396 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 15.
397 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 16.
398 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), pp. 16-17.
399 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), pp. 16-17.
400 GATT Council, Minutes of the Meeting (29 May 1985), (Exhibit USA-63), p. 17.
401 GATT Council, Minutes of the Meeting (12 March 1986), C/M/196, (Exhibit USA-64), p. 7.
402 GATT Council, Minutes of the Meeting (12 March 1986), (Exhibit USA-64), p. 7.
403 GATT Panel Report, United States – Trade Measures Affecting Nicaragua, (Exhibit USA-65), para. 5.3.
404 GATT Council, Minutes of the Meeting (5-6 November 1986), C/M/204, (Exhibit USA-66), pp. 8-9 and
15-16. The representative of the European Communities noted, however, that "the discretionary right inherent
in Article XXI should not be arbitrarily invoked" (Ibid., p. 16).
405 GATT Council, Minutes of the Meeting (5-6 November 1986), (Exhibit USA-66), p. 10.
406 GATT Council, Minutes of the Meeting (5-6 November 1986), (Exhibit USA-66), p. 11.
407 GATT Council, Minutes of the Meeting (5-6 November 1986), (Exhibit USA-66), p. 12.
408 GATT Council, Minutes of the Meeting (5-6 November 1986), (Exhibit USA-66), pp. 12-13.

of the GATT 1947409; (vi) the representative of India argued that a contracting party invoking
Article XXI of the GATT 1947 should be able to demonstrate a "genuine nexus" between its security
interests and the action taken.410
7.58. Ultimately, consensus could not be reached on the adoption of the Panel report.411 Under the
circumstances, the Chairperson suggested that the Council take note of the statements and request
the Chairperson to consult informally with the delegations on how to deal with the Panel's report.412
The Council so agreed.413
7.59. In this dispute, the United States argues in this dispute that although the GATT Council could
not adopt the report, statements of the contracting parties in connection with the United States'
reference to Article XXI of the GATT 1947 "demonstrate that invocations of Article XXI(b) were seen
as self-judging and that the GATT was not intended as a forum to discuss political disputes".414
7.60. China does not comment on the views expressed by certain GATT contracting parties
regarding the invocation of Article XXI of the GATT 1947 by the United States in relation to certain
measures affecting Nicaragua.
7.2 Assessment by the Panel
7.61. The Panel notes that the parties agree that the views of the GATT contracting par ties
summarized above do not have a particular status under either Articles 31 or 32 of the
Vienna Convention. The documents submitted refer to discussions taking place among GATT
contracting parties in four separate instances.
7.62. With regard to the 1961 meet ing of the GATT CONTRACTING PARTIES where a discussion
took place on Portugal's accession to the GATT, the Panel notes that Ghana invoked Article XXI of
the GATT 1947 as the justification for imposing a ban on the importation of Portuguese products. In
that context, Ghana expressed the view that "each contracting party was the sole judge of what was
necessary in its essential security interests". 415 The minutes of the meeting do not report any
reaction by any GATT contracting party to the statement of the re presentative of Ghana, and the
Panel does not find any basis to interpret this lack of reaction as showing either support or opposition
to the views expressed by the representative of Ghana.
7.63. With regard to the 1970 Working Party Report on the accession of the United Arab Republic
to the GATT, the Panel notes that the document does not explicitly refer to Article XXI of the
GATT 1947. Furthermore, the document reveals that some GATT contracting parties "reserved their
rights" under the GATT 1947, without further specification. In the Panel's view, the document does
not reveal a common understanding by the parties on the interpretation of Article XXI of the
GATT 1947. The circumstance that some contracting parties reserved their rights under the
GATT 1947 further indicates that the discussion recorded in the document did not preclude or
predetermine such rights, including the possibility to resort to dispute settlement.
7.64. With regard to the discussions that took place in 1982 in relation to the invo cation by the
European Communities, Canada, and Australia of Article XXI of the GATT 1947 to justify the adoption
of certain measures affecting trade with Argentina in connection with the situation in the Falkland
Islands (Islas Malvinas), the Panel notes that the documents on record show a variety of views
among the GATT contracting parties. Differing views were expressed concerning a number of issues,
including: (a) whether those GATT contracting parties that invoked Article XXI of the GATT 1947
were entitled to do so; (b) whether GATT contracting parties invoking Article XXI of the GATT 1947
were required to notify their measures; and (c) what remedies were available for GATT contracting
parties affected by measures taken pursuant to Article XXI of the GATT 1947. Accordingly, the
materials submitted demonstrate that the GATT contracting parties did not express a common
understanding on the interpretation of Article XXI of the GATT 1947. The Panel further notes that

409 GATT Council, Minutes of the Meeting (5-6 November 1986), (Exhibit USA-66), p. 14.
410 GATT Council, Minutes of the Meeting (5-6 November 1986), (Exhibit USA-66), p. 14.
411 GATT Council, Minutes of the Meeting (5-6 November 1986), (Exhibit USA-66), p. 17.
412 GATT Council, Minutes of the Meeting (5-6 November 1986), (Exhibit USA-66), p. 17.
413 GATT Council, Minutes of the Meeting (5-6 November 1986), (Exhibit USA-66), p. 17.
414 United States' first written submission, para. 127.
415 See para. 7.3 above.

these discussions eventually led to the a doption of the 1982 Decision.416 In this respect, the Panel
recalls its earlier findings that there is no indication in the 1982 Decision that Article XXI of the
GATT 1994 should be understood as an entirely "self-judging" provision in the sense argued by the
United States in this dispute.417
7.65. Finally, the Panel turns to the discussions that took place in 1985 and 1986 in relation to the
United States' invocation of Article XXI of the GATT 1947 to justify certain measures affecting trade
with Nicaragua. The Panel notes that while the United States and the European Communities made
statements arguing that the GATT contracting parties had the right to determine their own national
security interests, a number of contracting parties expressed opposite views, includ ing by
challenging the notion that the invocation of Article XXI of the GATT 1947 by a GATT contracting
party would be self-judging. Further, a panel was established in the dispute between Nicaragua and
the United States for which the parties agreed on spe cial terms of reference explicitly preventing
that panel from examining or judging "the validity of or motivation for the invocation of
Article XXI(b)(iii) [of the GATT 1947] by the United States".418 Eventually, there was no consensus
in the GATT Council t o adopt the report of the panel. Based on the foregoing, the Panel is of the
view that these discussions do not reveal a common understanding on the interpretation of
Article XXI of the GATT 1947 among the GATT contracting parties.
7.66. The Panel therefore concludes that the materials reviewed in this section reveal various and,
at times, opposing views expressed by several GATT contracting parties with reference to Article XXI
of the GATT 1947. In light of the heterogeneity of the views expressed in the materia ls reviewed
above, the Panel does not consider that these provide any relevant guidance for the contested issues
in this dispute regarding the interpretation of Article XXI of the GATT 1994.
8 URUGUAY ROUND NEGOTIATIONS
8.1 Arguments and materials submitted by the parties
8.1. The United States refers to certain materials from the negotiating record of the Uruguay Round
as "negotiating history" that confirms that the invocation of Article XXI(b) of the GATT 1994 is self-
judging.419
8.2. China does not comment on these materials.
8.1.1 Proposals regarding Article XXI at the Negotiating Group on GATT Articles
8.3. The United States submits documents concerning two proposals tabled by Nicaragua and
Argentina at the Uruguay Round Negotiating Group on GATT Articles.
8.4. On 10 November 1987, Nicaragua sent a communication to the Negotiating Group on GATT
Articles, requesting the inclusion of Article XXI among the provisions of the GATT 1947 to be
reviewed during the Uruguay Round of negotiations. 420 On 28 June 1988, Nicaragua sub mitted a
proposal to the Negotiating Group on GATT Articles regarding the interpretation of Article XXI and
the consequences of the invocation of that provision.421
8.5. First, Nicaragua proposed the adoption of an interpretative note regarding the "which it
considers" language in Article XXI(b). The proposed interpretative note read:
Any invocation of this provision must be in good faith, that is, it must be consistent with
international law and must come after the invoking party has first tried to protect its
interest through bilateral negotiations, and, if such negotiations prove unsuccessful, has
tried to protect its interests by appealing to the appropriate body of the United Nations

416 See para. 6.3 above.
417 See para. 6.11 above.
418 See para. 7.56 above.
419 United States' second written submission, para. 41.
420 Negotiating Group on GATT Articles, Communication from Nicaragua (10 November 1987),
MTN.GNG/NG7/W/34, (Exhibit USA-152).
421 Negotiating Group on GATT Articles, Article XXI Proposal by Nicaragua (28 June 1988),
MTN.GNG/NG7/W/48, (Exhibit USA-150).

or other appropriate inter -governmental organisation that deals with war or other
emergencies in international relations. Any invocation of this provision must also be
consistent with any resolution or determination reached by a body of the United Nations
or other such inter-governmental organisation.422
8.6. Second, Nicaragua also pro posed the adoption of an interpretative note to define the terms
"emergency in international relations" in Article XXI(b)(iii), with the following language:
For purposes of this Article, "emergency in international relations" shall be understood
to refer only to situations which in the opinion of the CONTRACTING PARTIES threaten
international peace and security and which the party invoking the Article has first sought
to resolve by appealing to the appropriate body of the United Nations or other
appropriate inter-governmental organisation that deals with peace and security
issues.423
8.7. Finally, Nicaragua submitted a proposal for the adoption of the following provision:
The CONTRACTING PARTIES shall make recommendations, which shall be obligatory,
with a view to compensating in full any developing country whose rights or benefits
under the General Agreement have been nullified or impaired by the actions taken by
another contracting party under Article XXI, provided that in the opinion of the
CONTRACTING PARTIES the acts cited by the contracting party invoking Article XXI as
the basis for such invocation do not constitute acts taken in time of war or other
emergency in international relations or a violation of international law.424
8.8. On 4 February 1988, Argentina submitted a communication to the Negotiating Group on GATT
Articles concerning Article XXI.425 In the communication, Argentina stated that experience to that
date had shown that "there is no restriction on the unilateral interpretation of the contracting party
invoking [Article XXI], which creates a legal gap that will have to be studied and resolved during the
current Round of Negotiations".426
8.9. Argentina noted that the ITO Draft Charter envisaged the possibility to refer disputes of a
"political" nature to the United Nations, thereby limiting the jurisdiction of the ITO and providing for
a solution to matters "in one forum or the other". 427 To avoid "future uses of Article XXI that could
continue to un dermine the functioning of the General Agreement", Argentina proposed that the
Negotiating Group consider the following options:
(a) To draft an Interpretative Note restoring the original link between Articles 86 and
99.
(b) To interpret certain terms of the provisions of Article XXI(b)(iii) in such a way as to
limit possible arbitrariness.
Such terms would include: (1) protection of essential security interests; and (2) time of
war or other emergency in international relations.428
8.10. In its communication, Argentina further noted that trade measures adopted under Article XXI
did not allow developing countries affected by those to effectively retaliate, which "facilitates the use
of these provisions against economically weaker countries".429 To address this concer n, Argentina

422 Article XXI Proposal by Nicaragua, (Exhibit USA-150).
423 Article XXI Proposal by Nicaragua, (Exhibit USA-150).
424 Article XXI Proposal by Nicaragua, (Exhibit USA-150).
425 Negotiating Group on GATT Articles, Communication from Argentina (4 February 1988),
MTN.GNG/NG7/W/44, (Exhibit USA-151).
426 Communication from Argentina, (Exhibit USA-151), p. 1.
427 Communication from Argentina, (Exhibit USA-151), p. 2.
428 Communication from Argentina, (Exhibit USA-151), p. 3. See Articles 86 and 99 of the ITO Draft
Charter.
429 Communication from Argentina, (Exhibit USA-151), p. 3.

proposed that future provisions "be strengthened … by ensuring suitable legal protection for
developing or commercially weaker contracting parties".430
8.11. The two proposals were discussed at a meeting of the Negotiating Group on GATT Articles
held on 27-30 June 1988. Representatives of Argentina and Nicaragua introduced their proposals.431
Several delegations intervened, but a note on the meeting does not indicate their identity.
8.12. One delegation expressed the view that when measures were taken for s ecurity reasons, it
was important to establish a clear relationship between "the measures taken and the security
considerations on which they were based". 432 The same delegation further stated that "[w]ithout
calling into question the sovereign right to invoke Article XXI[,] the Group should examine how such
a direct relationship could be established".433
8.13. Other delegations argued that "since Article XXI involved very sensitive matters a great deal
of discretion was necessary in dealing with it". As considerations of sovereignty were "paramount"
in the application of Article XXI, "it was unrealistic to think of a GATT body placing conditions on its
use since only the individual contracting party concerned was ultimately in a position to judge what
its security interests were".434 It was also noted that "[h]itherto contracting parties had been very
judicious in using Article XXI, which had been invoked very infrequently".435
8.14. With respect to the proposal submitted by Argentina, "one delegation expressed the opinion
that since the GATT had no competence in the determination of questions of security or of a political
nature, it seemed doubtfully useful to set up any institutional test to determine whether a matter
was security-related or political".436
8.15. Other delegations argued that there was a "danger" of Article XXI being abused if
governments were not cautious in its invocation. 437 The minutes of the meeting further report that
"[o]ther delegations, which did not favour any change in the text of Article XXI or the development
of rigid disciplines in what was essentially a matter for unilateral decision, suggested that the
notification provisions under the Article might be improved". 438 The minutes mention that "[t]he
point was also made that the right of recourse to Article XXIII was the appropriate safeguard against
abuse".439
8.16. Finally, with regard to the issue of the lack of retaliatory power for less-developed contracting
parties, delegations expressed a variety of views, ranging from not seeing the issue as a "North -
South problem" to arguing in favour of making provision for compensation for less -developed
countries when action affecting them was not consistent with Article XXI.440
8.17. According to the United States, the discussion reported above shows that negotiators during
the Uruguay Round expressed views consistent with those of the negotiators of Article XXI of the
GATT 1947, "namely that matters of essential security under Article XXI are left to the judgement
of the invoking member".441 According to the United States, even those delegations that agreed with
Argentina and Nicaragua acknowledged this meaning. 442 The United States maintains that the
documents submitted show how "Uruguay Round negotiators did not intend to alter the self-judging
nature of Article XXI, and they rejected proposals that would have done so".443

430 Communication from Argentina, (Exhibit USA-151), p. 3.
431 Negotiating Group on GATT Articles, Note on Meeting of 27-30 June 1988, MTN.GNG/NG7/8, (Exhibit
USA-153), pp. 1-2.
432 Negotiating Group on GATT Articles, Note on Meeting of 27-30 June 1988, (Exhibit USA-153), p. 2.
433 Negotiating Group on GATT Articles, Note on Meeting of 27-30 June 1988, (Exhibit USA-153), p. 2.
434 Negotiating Group on GATT Articles, Note on Meeting of 27-30 June 1988, (Exhibit USA-153), p. 2.
435 Negotiating Group on GATT Articles, Note on Meeting of 27-30 June 1988, (Exhibit USA-153), p. 2.
436 Negotiating Group on GATT Articles, Note on Meeting of 27-30 June 1988, (Exhibit USA-153),
pp. 2-3.
437 Negotiating Group on GATT Articles, Note on Meeting of 27-30 June 1988, (Exhibit USA-153), p. 3.
438 Negotiating Group on GATT Articles, Note on Meeting of 27-30 June 1988, (Exhibit USA-153), p. 3.
439 Negotiating Group on GATT Articles, Note on Meeting of 27-30 June 1988, (Exhibit USA-153), p. 3.
440 Negotiating Group on GATT Articles, Note on Meeting of 27-30 June 1988, (Exhibit USA-153), p. 3.
441 United States' second written submission, para. 49.
442 United States' second written submission, para. 49.
443 United States' second written submission, para. 49.

8.18. China does not specifically comment on these documents.
8.1.2 The drafting of security exceptions in the GATS and in the TRIPS Agreement
8.19. The United States submits materials concerning the drafting of security exceptions in the
GATS and in the TRIPS Agreement.
8.20. Concerning the negotiating history of the GATS, the United States submitted the draft texts
of the security exceptions that were proposed by a numbe r of delegations at the Uruguay Round
between 1989 and 1990.
8.21. Switzerland submitted a proposal for a provision granting exceptions for "public order and
national security" that omitted the language "it considers" and required that measures "necessary
to protect … essential security interests" be not applied "in a manner that would constitute a means
of arbitrary or unjustifiable discrimination between PARTIES, a disguised restriction on trade in
services, or a means of circumventing the objectives of the Agreement".444
8.22. A joint proposal by Brazil, Chile, Colombia, Cuba, Honduras, Jamaica, Nicaragua, Mexico,
Peru, Trinidad and Tobago, and Uruguay included a n exception for measures "consistent with
international law, that are … [n]ecessary to protect national se curity".445 Such exception would
feature alongside exceptions for measures addressing other concerns (e. g., "public morals", "public
order", "safety or health"). 446 Like the proposal submitted by Switzerland, this proposal did not
include the "it considers" language. The proposal also subjected measures necessary to protect
national security to the requirement that they not be used "as a means to circumvent the objectives,
principles and disciplines of this Framework nor as disguised restrictions on internat ional trade in
services".447 Finally, the proposal introduced a notification requirement.448
8.23. The United States submitted a proposal for a "General Exceptions" provision, which included
a separate paragraph dealing with national security. 449 Similarly to Article XXI of the GATT 1947,
this proposal retained the "it considers" language and the reference to action "taken in time of war
or other emergency in international relations". 450 Similar elements characteri zed a proposal
submitted by Japan.451
8.24. A draft text proposed by the European Communities also included a separate paragraph
dealing with national security issues in the context of a broader "Exceptions" provision. 452 Like the
proposals of the United States and Japan, the draft text retained the "it considers" language and the
reference to action "taken in time of war or other emergency in international relations". 453 In
addition, the proposal of the European Communities: (i) required parties to "take into consideration
the interests of third parties which may be affected"; (ii) provided that "PARTIES shall be informed

444 Group of Negotiations on Services, Communication from Switzerland – Draft General Agreement on
Trade in Services (7 June 1990), MTN.GNS/W/102, (Exhibit USA-183), p. 10.
445 Group of Negotiations on Services, Communication from Brazil, Chile, Colombia, Cuba, Honduras,
Jamaica, Nicaragua, Mexico, Peru, Trinidad and Tobago and Uruguay – Structure of a Multilateral Framework
for Trade in Services (26 February 1990), MTN.GNS/W/95, (Exhibit USA-184), p. 9.
446 Communication from Brazil, Chile, Colombia, Cuba, Honduras, Jamaica, Nicaragua, Mexico, Peru,
Trinidad and Tobago and Uruguay – Structure of a Multilateral Framework for Trade in Services, (Exhibit USA-
184), p. 9.
447 Communication from Brazil, Chile, Colombia, Cuba, Honduras, Jamaica, Nicaragua, Mexico, Peru,
Trinidad and Tobago and Uruguay – Structure of a Multilateral Framework for Trade in Services, (Exhibit USA-
184), p. 9.
448 Communication from Brazil, Chile, Colombia, Cuba, Honduras, Jamaica, Nicaragua, Mexico, Peru,
Trinidad and Tobago and Uruguay – Structure of a Multilateral Framework for Trade in Services, (Exhibit USA-
184), p. 9.
449 Group of Negotiations on Services, Communication from the United States – Agreement on Trade in
Services (17 October 1989), MTN.GNS/W/75, (Exhibit USA-185), p. 12.
450 Communication from the United States – Agreement on Trade in Services, (Exhibit USA-185), p. 12.
451 Group of Negotiations on Services, Communication from Japan – Draft General Agreement on Trade
in Services (10 July 1990), MTN.GNS/W/107, (Exhibit USA-187), p. 12.
452 Group of Negotiations on Services, Communication from the European Communities – Draft General
Agreement on Trade in Services (18 June 1990), MTN.GNS/W/105, (Exhibit USA-186), p. 13.
453 Communication from the European Communities – Draft General Agreement on Trade in Services,
(Exhibit USA-186), p. 13.

to the fullest extent possible of measures taken under this Article"; and (iii) established that "[a]ll
parties affected by action under this Article retain their full rights under this Agreement".454
8.25. In July 1990, the Chairperson of the Group of Negotiations on Services circulated a draft of a
"Multilateral Framework for Trade in Services".455 The draft included an "Exceptions" provision with
a paragraph specifically dealing with nat ional security exceptions. The provision, in relevant part,
read as follows:
Article XIV
Exceptions
2. Nothing in this Agreement shall be construed:
(a) to require any party to furnish any information the disclosure of which it
considers contrary to its essential security interests; or
(b) to prevent any party from taking any action which it considers necessary for
the protection of its essential security interests:
(i) relating to the provision of services as carried on directly or indirectly
for the purpose of provisioning a military establishment;
(ii) relating to fissionable materials or the materials from which they are
derived;
(iii) taken in time of war or other emergency in international relations; or
(c) to prevent any party from taking any action i n pursuance of its obligations
under the United Nations Charter for the maintenance of international peace and
security.
3. PARTIES shall be informed to the fullest extent possible of measures taken under this
Article.456
8.26. With minimal modifications, this pr ovision was also included in the draft text of the GATS
circulated in December 1990.457
8.27. In December 1991, the Chairperson of the Trade Negotiations Committee circulated a draft
text of the GATS that further separated "General Exceptions" in Article XIV from "Security
Exceptions", now placed in Article XIV bis and worded as follows:
Article XIV bis
Security Exceptions
1. Nothing in this Agreement shall be construed:
(a) to require any party to furnish any information the disclosure of which it
considers contrary to its essential security interests; or

454 Communication from the European Communities – Draft General Agreement on Trade in Services,
(Exhibit USA-186), p. 13.
455 Group of Negotiations on Services, Draft Multilateral Framework for Trade in Services (23 July 1990),
MTN.GNS/35, (Exhibit USA-188).
456 Group of Negotiations on Services, Draft Multilateral Framework for Trade in Services (23 July 1990),
(Exhibit USA-188), pp. 11-12.
457 Trade Negotiations Committee, Draft Final Act Embodying the Results of the Uruguay Round of
Multilateral Trade Negotiations (Revision) (3 December 1990), MTN.TNC/W/35/Rev.1, (Exhibit USA-189), p.
348.

(b) to prevent any party from taking any action which it considers necessary for
the protection of its essential security interests:
(i) relating to the provision of services as carried out directly or indirectly
for the purpose of provisioning a military establishment;
(ii) relating to fissionable and fusionable materials or the materials from
which they are derived;
(iii) taken in time of war or other emergency in international relations; or
(c) to prevent any Party from taking any action in pursuance of its obligations
under the United Nations Charter for the maintenance of international peace and
security.
2. The PARTIES shall be informed to the fullest extent possible of measures taken under
paragraphs 1(b) and (c) and of their termination.458
8.28. Concerning the negotiations of the security exceptions in the TRIPS Agreements, the
United States submits two documents.
8.29. The first document is an excerpt from the draft text of the TRIPS Agreement circulated on
23 July 1990 at the request of the Chairperson of the Negotiating Group on Trade -Related Aspects
on Intellectual Property Rights, including Trade in Counterfeit Goods.459 The draft text did not include
a provision on security excepti ons, but incorporated GATT provisions "to the extent that this PART
does not provide for more specific rights, obligations and exceptions thereof".460
8.30. The second document is an excerpt from the December 1991 draft text of the TRIPS circulated
by the Chairp erson of the Trade Negotiations Committee. The draft text included a "Security
Exceptions" provision with the following text:
Article 73: Security Exceptions
Nothing in this Agreement shall be construed:
(a) to require any PARTY to furnish any information the disclosure of which it
considers contrary to its essential security interests; or
(b) to prevent any PARTY from taking any action which it considers necessary for
the protection of its essential security interests:
(i) relating to fissionable materials or the materials from which they are
derived;
(ii) relating to the traffic in arms, ammunition and implements of war and
to such traffic in other goods and materials as is carried on directly or
indirectly for the purpose of supplying a military establishment;
(iii) taken in time of war or other emergency in international relations; or

458 Draft Final Act Embodying the Results of the Uruguay Round (20 December 1991), (Exhibit USA-
190), pp. 18-19.
459 Negotiating Group on Trade-Related Aspects of Intellectual Property Rights, including Trade in
Counterfeit Goods, Status of Work in the Negotiating Group – Chairman's Report to the GNG (23 July 1990),
MTN.GNG/NG11/W/76, (Exhibit USA-191).
460 Draft Text of the TRIPS Agreement, (Exhibit USA-191), p. 78.

(c) to prevent any PARTY from taking any action in pursuance of its obligations
under the United Nations Charter for the maintenance of international peace and
security.461
8.31. In this dispute, the United States argues that Uruguay Round negotiators decided to include
in GATS and TRIPS security exceptions mirroring Article XXI of the GATT 1947 in relevant part.462
According to the United States, the Uruguay Round drafters deliberat ely chose to replicate in the
GATS and TRIPS elements of the security exceptions that make them self -judging, namely the
reference to action that a Member "considers necessary" and the separation from the discipline on
"general exceptions".463 The United States notes that a proposal by Switzerland and a joint proposal
of 11 delegations sought to remove the "it considers" language in the GATS security exceptions and
to add requirements against discrimination, circumvention of the disciplines of the GATS, and
disguised restrictions to trade. 464 The United States further notes that proposals tabled by,
respectively, the European Communities, Japan, and the United States retained the "it considers"
language as well as the reference to action "taken in time of war or other emergency in international
relations", separated the security exceptions from "general exceptions", and did not include "non -
discrimination requirements" in the text of the security exceptions.465
8.32. The United States notes that the proposal submitted by the European Communities included
the following language at the end of the national security exceptions: "In taking action under this
paragraph, parties shall take into consideration the interests of third parties which may be
affected".466 According to the United States, this suggests that the European Communities
acknowledged that "it was the parties – now Members – that would be choosing whether to take
action under this provision". 467 The United States further argues that, by providing in its proposal
that "All parties affected by action under this Article retain their full rights under this Agreement",
the European Communities acknowledged the 1982 Decision 468 and "yet retained the self -judging
reference to actions a Member 'considers necessary for the protection of its essential security
interests'".469
8.33. The United States maintains that the draft texts of the GATS circulated by the Chairperson
reflected in relevant part the proposals submitted by the European Communities, Japan, and the
United States. Specifically, the United States argues that the drafters "deliber ately" chose to
separate security exceptions from general exceptions, subjecting only the latter to review for non -
discrimination, leaving the former "self-judging".470
8.34. The United States finally refers to the negotiating history of the security exceptions i n the
TRIPS Agreement.471 According to the United States, drafters were presented again with the choice
of whether to diverge from the language of Article XXI of the GATT 1947, and eventually decided
again "to use the language of Article XXI in the security exceptions at TRIPS Article 73".472 The
United States concludes that negotiators were aware of how Article XXI of the GATT 1947 had been
interpreted, and "were comfortable continuing with that interpretation".473
8.35. China does not specifically comment on these documents.

461 Draft Final Act Embodying the Results of the Uruguay Round (20 December 1991), (Exhibit USA-
190), p. 90.
462 United States' second written submission, para. 50.
463 United States' second written submission, paras. 50-51.
464 United States' second written submission, paras. 52-53.
465 United States' second written submission, para. 54.
466 United States' second written submission, para. 55; Communication from the European Communities
– Draft General Agreement on Trade in Services, (Exhibit USA-186), p. 13.
467 United States' second written submission, para. 55.
468 See para. 6.3 above.
469 United States' second written submission, para. 55.
470 United States' second written submission, paras. 56-57.
471 United States' second written submission, para. 58.
472 United States' second written submission, para. 59.
473 United States' second written submission, para. 59.

8.1.3 Negotiations of the DSU
8.36. The United States submits materials related to the negotiations of the DSU and a proposal by
Nicaragua.
8.37. On 3 November 1987, Nicaragua submitted a communication to the Negotiating Group on
Dispute Settlement.474 Nicaragua shared its experience in GATT dispute settlement and submitted
several proposals for consideration during the negotiations, including the following:
No contracting party may oppose examination of the applicability of GATT provisions
and compliance with them.
…
Any panel must reach a clear conclusion on nullification or impairment of benefits.475
8.38. At a meeting held on 20 November 1987, the negotiators discussed, among other topics,
"GATT Article XXI and its review by a GATT panel". 476 The delegation of Chile submitted an
addendum to the note, summarizing its statements at the meeting. 477 Referring to the
communication of Nicaragua discussed above, Chile considered "pertinent" the contents of large
parts of the document. 478 However, Chile "found unacceptable the introduction and the extremely
politicized framework of the document, as well the lack of any reference to Article XXI of the General
Agreement, which is fully valid".479
8.39. The United States argues that Nicaragua's proposal was not incorporated into the DSU.480 The
United States further submits that other statements by the drafters of the DSU confirm that "the
DSU does not alter the ordinary meaning of the terms of the covered agreements". 481 According to
the United States, the decision of the drafters "not to include language in the DSU that would alter
the interpretation of Article XXI" confirms that Uruguay Round negotiators were aware of the existing
interpretation of Article XXI of the GATT 1947 and agreed with it.482
8.40. China does not specifically comment on these documents.
8.1.4 The formulation of security exceptions in international agreements concluded after
1947
8.41. The United States argues that the choice of Uruguay Round negotiators to keep the language
of Article XXI of the GATT 1947 and to substantially replicate it in other covered agreements is
notable in light of the approaches to security exceptions taken in other trade agreements negotiated
after 1947.483 According to the United States, while some agreements (such as the 1985 Agreement
between Israel and the United States) incorporated by reference Article XXI of the GATT 1947, other
agreements (such as the Treaty of Rome and the Agreement on the European Economic Area)

474 Negotiating Group on Dispute Settlement, Communication from Nicaragua (3 November 1987),
MTN.GNG/NG13/W/15, (Exhibit USA-192).
475 Communication from Nicaragua, (Exhibit USA-192), p. 8.
476A note by the Secretariat summarizing the meeting does not provide details about the discussion
(Negotiating Group on Dispute Settlement, Meeting of 20 November 1987 – Note by the Secretariat,
MTN.GNG/NG13/5, (Exhibit USA-193), p. 3).
477 Negotiating Group on Dispute Settlement, Meeting of 20 November 1987 – Note by the Secretariat
(Addendum), MTN.GNG/NG13/5/Add.1, (Exhibit USA-194).
478 Negotiating Group on Dispute Settlement, Meeting of 20 November 1987 – Note by the Secretariat
(Addendum), (Exhibit USA-194), p. 2.
479 Negotiating Group on Dispute Settlement, Meeting of 20 November 1987 – Note by the Secretariat
(Addendum), (Exhibit USA-194), p. 2.
480 United States' second written submission, para. 62.
481 United States' second written submission, para. 63; Negotiating Group on Dispute Settlement,
Meeting of 25 June 1987 – Note by the Secretariat, MTN.GNG/NG13/2, (Exhibit USA-195); Negotiating Group
on Dispute Settlement, Meeting of 11 July 1988 – Note by the Secretariat, MTN.GNG/NG13/9, (Exhibit USA-
196).
482 United States' second written submission, para. 64.
483 United States' second written submission, paras. 65 and 76.

"reflect significant de viations from the text of Article XXI, including by expressly providing for the
review of measures taken by a government for essential security purposes".484
8.42. China does not specifically comment on these documents.
8.2 Assessment by the Panel
8.43. In this section of the Appendix, the Panel reviews four sets of documents submitted by the
United States concerning: (i) proposals to modify the wording of Article XXI and the ensuing
discussion; (ii) the negotiations of the security exceptions in the GATS and in the TRIPS Agreement;
(iii) the negotiations of the DSU; and (iv) the formulation of security exceptions in other international
agreements.
8.44. The Panel recalls its understanding that Article 32 of the Vienna Convention does not
exhaustively define the types of supplementary means of interpretation that an interpreter may have
recourse to in order to confirm the meaning of treaty terms. 485 The first three sets of documents
listed above naturally fall within the meaning of "preparatory work" for the purposes of Article 32 of
the Vienna Convention. One of these sets of documents pertains directly to the negotiations of
Article XXI of the GATT 1994, which is the relevant treaty provision in this analysis. Documents
concerning the negotiations of the security exceptions in the GATS and in the TRIPS Agreement, as
well as those relating to the negotiations of the DSU, could also be considered "preparatory work"
of the relevant covered agreements.
8.45. Concerning the negotiations that led to the transposition of Article XXI of th e GATT 1947,
unaltered in wording, into the GATT 1994, the Panel is not persuaded that the documents reveal, as
the United States argues, that the negotiators understood Article XXI to be "self-judging" and that
they therefore rejected proposals that would make it subject to review. Specifically, the Panel does
not find anything in these documents that would point to a shared understanding by the negotiators
that Article XXI had consistently been interpreted as a "self-judging" provision. The Panel notes that
in the discussions that followed the proposals submitted by Nicaragua and Argentina, various
participants disagreed with the idea that Article XXI was entirely "self -judging". While some
participants argued that it was for the individual contracting party concerned only "to judge what its
security interests were", others maintained that action taken under Article XXI could be found to be
inconsistent with the GATT, thereby implying the reviewability of the provision.486 Finally, the Panel
considers it sig nificant that participants referred to Article XXIII as "the appropriate safeguard"
against abuses of the invocation of the security exceptions.487
8.46. With regard to the negotiations of the security exceptions in the GATS and in the
TRIPS Agreement, the Panel notes that the materials do not show any explicit discussion on the
reviewability of the provisions in the event of a dispute. Accordingly, and bearing in mind that the
documents refer to similar provisions, but not directly to the relevant provision in t his dispute, the
Panel does not consider these documents to provide relevant guidance for the contested issues in
this dispute regarding Article XXI of the GATT 1994.
8.47. The Panel has also reviewed documents pertaining to the negotiations of the DSU. The Panel
notes that the three documents submitted concern inconclusive discussions that took place at the
early stages of the negotiations of the DSU. Furthermore, the Panel is of the view that these
documents should be considered against the background of the fi nal text of the DSU, which makes
no explicit reference to Article XXI of the GATT 1994 or the potential review of its invocation in
dispute settlement proceedings. Therefore, the Panel does not consider these documents to provide
relevant guidance for the contested issues in this dispute regarding Article XXI of the GATT 1994.
8.48. With regard to the security exceptions in other international agreements concluded between
1947 and the Uruguay Round, the Panel considers that they could in theory fall within the br oader

484 United States' second written submission, para. 65; Agreement on the Establishment of a Free Trade
Area between the Government of Israel and the Government of the United States of America, (Exhibit USA-
197); The Treaty of Rome, (Exhibit USA-181); Agreement on the European Economic Area (EEA), (Exhibit
USA-221).
485 See para. 2.33 above.
486 See para. 8.13 above.
487 See para. 8.15 above.

residual category of supplementary means of interpretation under Article 32 of the
Vienna Convention other than preparatory work and the circumstances of the conclusion of a treaty.
However, the Panel is not persuaded that the specific documents subm itted are relevant to the
contested issues in this dispute. One of these documents is the 1985 "Agreement on the
Establishment of a Free Trade Area between the Government of Israel and the Government of the
United States of America".488 Article 7 of the Agreement incorporates by reference Articles XX and
XXI of the GATT 1947.489 In the Panel's view, nothing in this document addresses the issue of the
nature of Article XXI as "self-judging" or otherwise. The other two documents refer to the security
exceptions and dispute settlement rules in the Treaty of Rome and in the EEA Agreement. Neither
makes any reference to Article XXI of the GATT 1947.490 Furthermore, those prov isions relate to
agreements with their own detailed rules for the settlement of disputes, separate and distinct from
those of the GATT or the WTO. In any event, there is no indication of the relation of these documents
to the negotiations of Article XXI of the GATT 1994 or of the security exceptions in other covered
agreements. The sole fact that such "alternative approaches"491 to security exceptions existed at the
time of the Uruguay Round negotiations is not sufficient in itself for the provisions in othe r
agreements to be considered as relevant elements for the purposes of interpreting Article XXI of the
GATT 1994.
8.49. Based on the foregoing, the Panel does not find support in these materials for the "self-judging
nature" of Article XXI(b) of the GATT 1994 as argued by the United States. Accordingly, the analysis
of these materials confirms, or at least does not undermine, the Panel's interpretation of
Article XXI(b) of the GATT 1994.