National Security and International Trade Law - University of ...

Overall, the number of express or implicit invoca- tions of Article XXI ..... obligations under the U.N. Charter is more important than ad- hering to GATT ..... Inc. initiated a one billion dollar contract with Iran to develop oil fields around Iran's Sirri ...
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NATIONAL SECURITY AND INTERNATIONAL TRADE LAW: WHAT THE GATT SAYS, AND WHAT THE UNITED STATES DOES RAJ BHALA*

1. INTRODUCTION

State-sponsored terrorists and rogue dictators are the "bad guys" which are the leading threats to the United States' national security and have replaced the old Soviet Union and a China that is no longer "Red." Conceptually, fighting the new "bad guys" is not as easy as fighting the old threats: "nuking" the Soviet Union or China always remained an option. However, the once useful military force was not designed to deal with the unconventional threats now posed by drug dealers and terrorists. Force is often an inappropriate way to contain or crush some dictators. Accordingly, the United States is increasingly inclined to turn to a new weapon, international trade measures, and to use this weapon unilaterally, regardless of opposition from its allies and trading partners. For example, to fight the reputed godfathers of international terrosism, Iran's mullahs and Libya's Muammar Qaddafi, the United States enacted the Iran and Libya Sanctions Act in 1996 ("ILSA").' * Professor of Law, The George Washington University School of Law, Washington, D.C. A.B. (Economics, Socioloo), Duke; M. Sc. (Economics), London School of Economics; M. Sc. (Industrial Relations), Oxford; J.D., Harvard Law School. Professor Bhala is the author of International Trade Law: Cases and Materials (hfichis 1996) and the co-author of World Trade Law (Michie/Lexis Law Publishing 1998), along with Professor Kevin Kennedy, Michigan State University (Detriot College of Law). I am grateful to the participants at the November 1997 American Society of International Law, Economic International Law Group meeting for their helpful comments on my presentation of an earlier draft ofthis Article. Portions of this work were originally published in 31 U.C. Davis L. Rev. 1 (1997). Copyright 1997 by the Regents of the University of California. Reprinted with permission. 1 Iran and Libya Sanctions Act of 1996, Pub. L. No. 104-172, 110 Stat. 1541 (to be codified at 50 U.S.C. S 1701 note). The Department of State has pub-

.ished guidelines on the implementation of the ILSA at 61 Fed. Reg. 66,067 (1996).

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The new threats to the United States' national security, and the highly controversial legislation the United States has enacted to preserve national security, raise a fundamental problem for international trade lawyers, who may be inclined to view the boundaries of their field as narrow. These boundaries encompass tariffs, non-tariff barriers, trade remedies such as antidumping, countervailing duty, and escape clause actions. The expansion of international trade has begun to encompass labor and environmental issues. What about national security? Many international trade attorneys have asked themselves what is the relationship between national security and international trade law. Initially, there may appear to be no relationship between national security and international trade law. "National security" often conjures up images of the military, intelligence operations, and a shadowy world of cloak-and-dagger espionage. On the other hand, "international trade law" triggers thoughts of a highly technical, somewhat arcane set of rules involving an everincreasing number of economic sectors which are derived from an international bureaucracy in Geneva, the World Trade Organization ("WTO"). 2 Our senior policy makers embody these stereoTo be sure, there are other important national security sanctions statutes in effect. Moreover, there are a number of additional recently-enacted controversial sanctions statues. For example, to fight Fidel Castro, in 1996 the United States enacted the Helms-Burton Act (formally known as the"Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996"). See Pub. L. No. 104114, 110 Stat. 785, (codified at amenfdedat 22 U.S.C. % 6021-91). Guidelines

and implementing regulations for the Helms-Burton Act h