Chicago Journal of International Law


This article explains why free trade agreements (FTAs) that are not compliant with the spirit of GATT Article XXIV's requirement that such agreements cover "substantially all the trade" between the parties pose serious challenges for the multilateral trading system. It notes the paradoxical behavior of WTO members in continuing to negotiate such free trade agreements to the detriment of the WTO. It characterizes this paradox as a form of Prisoners' Dilemma, in that although members would be better off pursuing trade liberalization via the WTO, their dominant strategy is to pursue FTAs. The article goes on to propose a pragmatic solution to resolve the dilemma that attempts to navigate the difficulties posed by both retrospective and prospective solutions.