In the WTO agenda item, China described the move as a ‘discriminatory market access prohibition on 5G equipment’.
In 2015, Professor Shin-yi Peng explored possible WTO breaches in various Australian and United States restrictions on Huawei. The WTO’s General Agreement on Tariffs and Trade 1994 (GATT) precludes discrimination against both imported products in comparison to local products and products imported from one WTO Member in comparison to those from any other country. GATT also prohibits import quotas and bans.
Australia’s actions could breach any of these provisions, just as a previous Australian government’s ban on Huawei from tendering for the National Broadband Network may have done.
Australia argues that it has not banned Huawei from the 5G rollout or breached WTO rules because it has not singled out any company or country. Rather, the media release states that ‘the involvement of vendors who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law’ would create risks of ‘unauthorised access or interference’ that could not be sufficiently mitigated through ‘technical security controls’.
This wording is nevertheless directed at China, whose National Intelligence Law of 2017 provides for its national intelligence institutions to request assistance from the country’s firms. The United States has pressured allies to exclude Huawei on cybersecurity grounds, and the Australian government reportedly contacted Chinese companies Huawei and ZTE directly to confirm their exclusion.
This does seem discriminatory — if China launched a formal WTO dispute, Australia would have to rely on general exceptions in GATT Article XX or the security exception in GATT Article XXI.
The general exceptions are stringent. Australia would have to show that the ban was necessary for purposes such as protecting public morals (perhaps extending to public order and privacy considerations) or securing compliance with other Australian laws (such as privacy or security laws), and that no other less trade-restrictive alternatives such as technical protocols were reasonably available.
Defences under the security exception are also subject to review. Article XXI(b) protects actions a WTO Member ‘considers necessary for the protection of its essential security interests’, but such actions must fall within a specific sub-paragraph such as those ‘taken in time of war or other emergency in international relations’.
A recent WTO Panel report assessed the security exception for the first time in a dispute brought by Ukraine against Russia. The WTO Panel rejected arguments by Russia and the United States that the security exception is self-judging or non-justiciable. As a third party, Australia argued that the Panel had to determine whether Russia considered its actions necessary to protect its security interests.
Having identified an emergency in international relations, the Panel upheld Russia’s invocation of Article XXI. It found that the Russian measures were not ‘so remote’ that ‘it is implausible that Russia implemented’ them to protect ‘its essential security interests arising out of that emergency’. The WTO Appellate Body is currently hamstrung, and Russia and Ukraine have indicated they will not appeal the Panel decision.
The Panel characterised an emergency in international relations as ‘a situation of armed conflict, or of latent armed conflict, or of heightened tension or crisis, or of general instability engulfing or surrounding a state’. That description might more readily apply to the relationship between Russia and Ukraine than to Australia and China.
Australia might instead rely on the reference in Article XXI(b) to traffic in ‘goods and materials … for the purpose of supplying a military establishment’. The coming 5G networks may be important for military purposes, but so might an extremely wide range of materials, from boots to cars. An overly expansive interpretation of this provision could risk undermining the multilateral trading system.
The security exception is also at issue in a WTO dispute brought by Qatar against the United Arab Emirates and in multiple WTO disputes brought against the United States imposition of steel and aluminium tariffs. As the WTO Director-General has pointed out, WTO Panel Reports are case-specific — different Panels may take different approaches.
A successful defence by Australia could require evidence that cybersecurity risks are higher for Huawei and ZTE equipment, despite the use of Chinese components by many other telecommunications suppliers. But Australia could contend that the details of its security assessments are beyond the scope of the WTO — Article XXI(a) confirms that a WTO Member need not provide information ‘the disclosure of which it considers contrary to its essential security interests’.
Ultimately, China is unlikely to bring a WTO dispute against Australia, because Beijing itself frequently invokes concepts such as public morals and national security to justify various restrictions and censorship, including in telecommunications and technology.
Tania Voon is Professor at Melbourne Law School, the University of Melbourne and a former Legal Officer with the Appellate Body Secretariat of the World Trade Organization.
Andrew Mitchell is Professor at Melbourne Law School, the University of Melbourne and the Director of the Global Economic Law Network.
Notwithstanding Professor Tania Voon’s points of law, how would or should the WTO deal with the fact that in the WTO framework if other WTO members such as Britain have also made security including national security assessments but have made different conclusions to whatever assessments the Australian employed to ban Huawei from its 5G networks, particularly if the assessments of other WTO members are made public but the assessments that the Australian government employed was not, is not and will not be made public? Could that not create a scenario where any country could argue, in a fairly arbitrary manner, that it has made a secret assessment on some things/issues and concluded that on national security ground they will not allow another country to trade goods and /or services and /or companies in another country to participate in the country’s commercial activities in other wise a foreign company may do so?
Could the author shed some light on these points, based on the author’s legal expertise?
The CCP, and the WTO, multi-lateral geopolitical “positioning” … or to be more accurate “ spin-doctoring” …. on being included, restricted or banned from global 5G technology rollouts is hypocritical in its extreme .. national security is always and will ever be a matter for every Sovereign State to consider above all international agreements, regardless of the multi-lateral binding legalise
.. further, it can clearly demonstrated that the “security” arguments that China uses to employ “the great firewall of China” that bans many western social-media companies ( facebook, twitter, google, etc ) are the same used by Australia to employ “banning” Huawei and ZTE from 5G national rollout inclusion
.. finally, the WTO should firstly re-look at CCP’s adherence to these WTO multi-lateral conditions trade conditions being met, and if WTO is not willing to enforce a multi-lateral level-play field, then simply the WTO is irrelevant .. and so are the legalese agreements that comes with that lack of WTO leadership
… unfortunately this breakdown in multi-lateralism seems to be case over the last 2 years as many large national States are now moving towards techno-nationalism fueled by western political populism and eastern state-based capitalism ..
I mean Australia has been a member of the WTO for 24 years, I don’t really think that things are going to change.