In this brief primer, I will discuss a once-obscure provision of international trade law treaties: national security exemptions. These exemptions permit governments to take actions that would ordinarily be prohibited under trade agreements, such as the Canada–United States–Mexico Agreement and, more broadly, under the World Trade Organization’s General Agreement on Tariffs and Trade (or GATT).
The rationale behind these exemptions is to enable states to protect what they deem to be their essential security interests, including concerns related to arms and other sensitive commodities.
The most notable embodiment of this principle is GATT Article XXI, which stipulates that no provision of the agreement shall prevent a member from taking any action it considers necessary for the protection of its essential security interests.
While this language grants considerable latitude, it is also distinctly ambiguous. Because the term “essential security interests” is not explicitly defined, some states have invoked it quite broadly, occasionally raising suspicions that purported security measures are, in reality, covert forms of protectionism.
There are several examples in recent history where this exemption has been employed. In the 1980s, the United States applied GATT Article XXI to justify prohibitions on trade with Sandinista Nicaragua, citing an “unusual and extraordinary threat” to national security.
More recently, the United Arab Emirates relied on this provision to defend its embargo on Qatar, while Russia invoked it to restrict Ukrainian transit across Russian territory.
In 2018, the Trump Administration imposed tariffs on steel and aluminum imports from various countries, including Canada, on national security grounds. This pretext was employed again by the second Trump administration in 2025 to impose sweeping tariffs.
A key question that arises is whether the WTO can evaluate the legitimacy of a security-based trade restriction. While many governments contend that Article XXI is “self-judging”—and therefore shields security-based actions from external scrutiny—a landmark WTO panel in 2019 concluded that it could review Russia’s invocation of Article XXI. It has since repeated this approach on several occasions, including on US steel and aluminum tariffs.
Consequently, the idea that states may invoke national security without oversight is not entirely correct. However, under the Biden administration, the US rejected the WTO’s panels' conclusion as flawed and appealed the steel and aluminum panels to the WTO Appellate Body. These are, however, appeals into the void.
That is because since December 2019, the WTO Appellate Body has lacked sufficient members to issue binding decisions, largely due to the United States blocking new appointments. Without this final arbiter, even when a WTO panel finds that a member has breached trade obligations, there is no functional appellate mechanism.
Meanwhile, WTO members cannot technically impose countermeasures while the appeals remain ongoing. And of course, none of this matters anyway if a state decides to abandon the rules based system outright.
All of this points to a pressing concern for the stability of the rules based trading order. This system was born from the international community’s determination to avoid the destructive protectionism of the 1930s, which contributed to the Great Depression and set the stage for the Second World War.
If states now choose to ignore or circumvent these rules—particularly by citing ambiguous national security grounds—the entire architecture of multilateral trade governance will be undermined.
Thank you for your interest.
