The Limits of Economic Power: Section 301 and the World Trade Organization Dispute Settlement System

Authors

C. O'Neal Taylor

First Page

209

Abstract

Since World War 1I, the United States has sought trade liberalization through the use of multilateral and unilateral actions under the General Agreement on Tariffs and Trade (GATT) and Section 301 of the Trade Act of 1974, respectively. Unilateralism by the United States has involved the forceful opening of foreign markets by the threat of sanctions, such as blocking access to the U.S. market. Such unilateral actions led the world trading system into the most recent multilateral negotiations, the Uruguay Round. As a result, the United States conceded to an effort to achieve trade liberalization through the expansion of GATT and the establishment of a more adjudicative settlement system governed by the World Trade Organization Dispute Settlement Understanding (DSU).

This Article addresses two major aspects of these recent developments. First, the author analyzes the limits to economic power exercised as unilateral sanctions. More specifically, she examines Section 301 and its limits by deconstructing this provision and reviewing cases in its second decade that construe its various parts. The author contends that the United States used Section 301, from 1985-1995, for three major purposes--pursuing GATT violations, to set the agenda for the Uruguay Round, and to try to cure a persistent trade deficit with Japan. The author concludes that unilateralism, as exemplified by Section 301, has limitations--primarily its effectiveness and its potential to violate GATT law--that prevent it from being a panacea for U.S. trade problems.

Second, the author examines the comprehensiveness and effectiveness of the new multilateral dispute settlement system under the DSU as an alternative to U.S. unilateral activity. This Article includes extensive analysis on how the DSU addresses and fails to address Section 301 concerns. Furthermore, it tracks the creation of the more adjudicative dispute settlement system and examines its consequences for the United States and all international organizations. The author concludes that the United States needs to resume multilateralism as the primary way to pursue trade liberalization and to use the more legitimate and equitable World Trade Organization Dispute Settlement System, established under the Uruguay Round, to address U.S. trade problems.

Recommended Citation

C. O'Neal Taylor, The Limits of Economic Power: Section 301 and the World Trade Organization Dispute Settlement System, 30 Vanderbilt Law Review 209 (2021)
Available at: https://scholarship.law.vanderbilt.edu/vjtl/vol30/iss2/2