In the multilateral trading systems under the WTO, the national security exception plays a crucial role in balancing trade liberalisation against the security interest of a sovereign nation. The proper use of the national security exception is of particular importance in the disputes with mixed political, diplomatic and military elements. The EU has recently accused China of breaching WTO obligations by taking restrictive trade measures against Lithuania, thereby affecting free trade between the EU and China. This paper argues that the allegation would be frustrated by the application of the WTO’s national security exception, as the dispute is rooted in Lithuania’s breach of its commitment to the One-China principle, which is crucial to China’s sovereignty and territorial integrity. Outside the WTO ruling system, a unilaterally imposed international sanction would be insufficient to alleviate the dispute between China and Lithuania and would lead to a deadlock in the multilateral trading system.

Non-discrimination is a fundamental principle of the World Trade Organization (WTO), which promotes global trade with the goal of eradicating hunger, reducing poverty, and ensuring global prosperity. According to the WTO rules, members are required to give other members most-favoured-nation and national treatment. Due to the military conflict between the Russian Federation and Ukraine, the United States, European Union, and several other member countries suspended most-favoured-nation treatment for Russian goods in mid-March 2022. This study examines the principle of non-discrimination under the WTO provisions, identifies relevant exceptions, analyses the Russia-Traffic in Transit case, and evaluates the appropriateness of the above actions by the US and others. Finally, this paper concludes that the US and its allies failed to present concrete evidence demonstrating a direct and causal relationship between the military situation in Ukraine and their own essential interests under Article XXI of GATT 1994.