Compliance vs. National Interest: Why Do Trade Restrictions Fail under the WTO?

Abstract

Trade restrictions are tools that countries often use to safeguard national interests, including economic stability, national security, and public welfare. However, under the World Trade Organization (WTO) framework-especially the General Agreement on Tariffs and Trade (GATT)-many such restrictions violate core principles such as non-discrimination (Articles I and III), the prohibition of quantitative restrictions (Article XI), and rules governing exceptions (Articles XX and XXI). This article examines why trade restrictions frequently fail in WTO dispute settlement by analyzing the substantive and procedural requirements under WTO law. Through a normative legal approach, it studies GATT provisions, WTO agreements, and case decisions-particularly the U.S.--China steel and aluminum tariffs dispute (DS544)-to assess how panels interpret the necessity test, proportionality, and exception clauses. The findings show that domestic political pressures, interest group lobbying, and economic crises often override states' commitment to WTO rules. Many members struggle to meet the high evidentiary standards required to justify restrictive measures under general exceptions. Consequently, even when national interest is invoked, many trade restrictions are struck down due to weak legal arguments and procedural flaws. This study contributes to understanding the tension between the international legal obligation to comply (pacta sunt servanda) and states' need for sovereign policy space. Ultimately, the article suggests that reconciling compliance with national interest requires better legal justification, alignment with WTO jurisprudence, and possible reforms in exception clauses and dispute resolution.

Access to Document

Other files and links

• Link to publication in Scopus
• Open Access Version Available

Fingerprint