Law and Policy in International Business
Section 301 of the Trade Act of 1974 allows the United States to threaten, and if necessary to impose, trade sanctions against countries that engage in certain "unfair" international trade practices. This Article defends the use of Section 301 to induce other nations to fulfill their legal obligations to the United States under international trade agreements that lack effective third-party dispute resolution. It also develops a limited argument for the use of Section 301 against practices that do not violate any international agreement, principally when a foreign country increases its level of protection, when it takes inappropriate advantage of loopholes or ambiguities in existing trade agreements, or when (as with many developing countries) it maintains a high level of protection relative to the United States yet is the beneficiary of important trade preferences. Finally, the Article reviews the history of Section 301 cases to date and suggests tentatively that the statute has proven reasonably successful at promoting the national economic interest.
Alan O. Sykes, "Constructive Unilateral Threats in International Commercial Relations: The Limited Case for Section 301," 23 Law and Policy in International Business 263 (1992).