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5 World Trade Rev. 1 (2006)

handle is hein.journals/wtradev5 and id is 1 raw text is: World Trade Review (2006), 5: 1, 1-30 Printed in the United K/ngdom @ Kerry Chase doi:10.1017/S1474745605002624 Multilateralism compromised: the mysterious origins of GATT Article XXIV KERRY CHASE* Department of Political Science and Fletcher School of Law and Diplomacy, Tufts University Abstract: The GATT treaty's loophole for free trade areas in Article XXIV has puzzled and deceived prominent scholars, who trace its postwar origins to US aspirations to promote European integration and efforts to persuade developing countries to endorse the Havana Charter. Drawing from archival records, this article shows that in fact US policymakers crafted the controversial provisions of Article XXIV to accommodate a trade treaty they had secretly reached with Canada. As a result, the free trade area exemption was embedded in the GATT-WTO regime, even though neither the Havana Charter nor the US-Canada free trade agreement was ever ratified. Theoretically, the case is an important example of how Cold War exigencies altered the policy ideas of US officials. 1. Introduction Article XXIV of the General Agreement on Tariffs and Trade (GAT) has been a source of vexation and puzzlement since the treaty's inception in 1947. This clause exempts free trade areas and customs unions from the obligation to accord most- favored nation (MFN) treatment in international trade. To its critics, Article XXIV is 'extremely elastic' (Curzon, 1965: 64), 'unusually complex' (Dam, 1970: 275), and 'full of holes' (Bhagwati, 1993: 44) due to language that is full of 'ambiguities' and 'vague phrases' (Haight, 1972: 397). Haight (1972: 398) impugns Article XXIV as an 'absurdity' and a 'contradiction', while Dam (1970: 275) brands it 'a failure, if not a fiasco'. Scholars have long debated whether Article XXIV should be written differently, with Bhagwati (1991: 76-79), McMillan (1993), Krueger (1999), and others proposing changes in the rules for regional trading arrangements, while Lawrence (1996) instead calls for more effective enforcement of the existing provisions. What is clear is that the implementation of Article XXIV has not worked well in practice. In the GATT's 47-year history, only one working * Correspondence to: Department of Political Science, Tufts University, Medford, MA 02155. Email: k.chase@tufts.edu Thanks to James Mathis, Tony Smith, and Sevan Terzian for helpful comments on earlier drafts. The faculty Research Awards Committee at Tufts University funded my research at the US National Archives, and the staff at Archives II in College Park, Maryland, assisted me with locating records. 1

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