Table of Contents

Conflict, Chaos and Confusion

Conflict, Chaos and Confusion

The Crisis in the International Trading System

William A. Kerr

After 15 years the WTO is not functioning as envisioned and is faced with many new trade challenges − climate change, terrorism, pandemics, genetically modified organisms, food safety − which it is ill-equipped to handle. Conflict, Chaos and Confusion sheds light on this deep and acute crisis, focusing on contentious and complex new trade issues and how they will affect international trade in the future.

Chapter 3: Homeland Security and the Rules of International Trade

William A. Kerr

Subjects: economics and finance, international economics


Nothing in this Agreement shall be construed … (b) to prevent any contracting party from taking any action which is necessary for the protection of its essential security interests… (iii) taken in time of war or other emergency in international relations; Article XXI – Security Exemptions – of The General Agreement on Tariffs and Trade International agreements that are entered into by independent nation-states, including those that establish the rules for international commercial policy, represent voluntary constraints on those countries’ exercise of sovereignty.1 There are, however, exceptions built into treaties and agreements whereby countries reserve the right to act in a sovereign manner for certain specified reasons.2 The most closely guarded exceptions are those that can be invoked for national security reasons. National security is one of the most basic responsibilities of nation-states, and political leaders would be remiss in not insisting on its inclusion in international arrangements and not invoking it in the face of a perceived threat. In terms of international commercial policy agreements, this means that once the essential security interests clause is invoked, all of the basic principles that, for example, underlie the World Trade Organization, such as non-discrimination and transparency, can be ignored, as well as any specific commitments in agreements or sub-agreements. This is as it should be. In the wake of the events that took place in the United States on September 11, 2001, there can be no objection to the invocation of essential security interests for border measures and other regulations that may affect international...

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