Trade vs. Security : Recent Developments of Global Trade Rules and China's Policy and Regulatory Responses from Defensive to Proactive

This paper provides the first systemic study of China’s policy and legal responses to security-related actions and disputes in the international trade regime. It starts with a brief review of the law and practices relating to the security exceptions under the World Trade Organization to provide an important context for understanding the recent developments of China’s approaches to national security. Based on a detailed discussion of China’s approaches at international and domestic levels, we argue that China’s security strategy has been shifting from being defensive to proactive: internationally by seeking to influence the development of trade rules and jurisprudence, and domestically by expanding national security to cover a wide spectrum of economic security interests and developing a comprehensive regulatory framework to facilitate the use of countermeasures to protect and pursue such interests. The way in which major trading nations are taking the law into their own hands, based on ever-expanding security interests, does not bode well for the future of the multilateral trading system. There is a pressing need for collective action by all governments involved to re-design security-related rules and exceptions to confine the use of security measures to agreed parameters