Article XXIII of the 1947 General Agreement on Tariffs and Trade (GATT) has provided the basic forum for contracting parties to resolve disputes over matters covered under the agreement. Economic theory has yet to supply a convincing rationale for why the threat of Article XXIII is not enough to prevent countries from violating the agreed-upon rules in the face of explicit GATT provisions allowing countries to legally alter their trade policy. Using the GATT's institutional structure and the guiding principle of reciprocity, this paper illustrates the incentives facing countries that need to change their national trade policy and who must choose between whether to do so legally under the GATT's safeguard provisions or illegally in violation of GATT rules. We find that terms-of-trade motivations, which relate to existing levels of protection and import and export trade volumes, influence whether a particular country is in the position to take advantage of the protection-affording opportunity and implement protection illegally, or whether the potential for retaliation by affected trading partners is too great, implying that the country should follow the GATT rules. The model is then used to provide an economic motivation and interpretation for some of the 1994 Uruguay Round reforms which were implemented in the Agreement on Safeguards and the Dispute Settlement Understanding under the World Trade Organization (WTO).