Rules outlined by Free Trade Agreements apply to national governments, yet state and local laws that violate Free Trade Agreements have brought challenges from our trading partners. Dispute panels do not have the authority to directly challenge state laws, yet they can penalize the federal government for the actions of states. Below are two examples of older cases - one brought before the GATT and one before the WTO - in which subfederal laws were found to be in violation of Trade Agreements.

Provisions in National and International Law


  • Section 102(b)(2) of NAFTA Implementing Legislation (Pub. L. No. 103-182, 107 Stat. 2057)

    Legal challenge.--No State law, or the application thereof, may be declared invalid as to any person or circumstance on the ground that the provision or application is inconsistent with the Agreement, except in an action brought by the United States for the purpose of declaring such law or application invalid.

  • General Agreement on Tariffs and Trade: Article XXIV:12

    Each Member is fully responsible under GATT 1994 for the observance of all provisions of GATT 1994, and shall take such reasonable measures as may be available to it to ensure such observance by regional and local governments and authorities within its territory.

Trade Disputes




Fact Sheets