Regional Governance: the Case of Dispute Settlement in NAFTA

  • Gustavo Vega-Cánovas


The central purpose of the North American Free Trade Agreement (NAFTA) was to liberalize and promote trade and investment between the three North American partners. Another goal was to improve the management of trade and investment relations, and to this end important dispute settlement procedures were instituted to minimize the conflict inherent in closer economic relations.


Corn Sweetener Dispute Settlement North American Free Trade Agreement Domestic Court Arbitral Tribunal 
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  1. 1.
    See Gary Hufbauer and Jeffrey Schott, NAFTA: An Assessment (Washington, DC: Institute for International Economics, 1995).Google Scholar
  2. 2.
    Frederick W. Mayer, Interpreting NAFTA: The Science and Art of Political Analysis (New York: Columbia University Press, 1998), p. 138.Google Scholar
  3. 5.
    Procedurally, it was thought that panelists from Canada or the United States would not be able to apply Mexico’s civil law correctly, nor would Mexican panelists be able to adapt to Canadian or American common law practices. See Homer E. Moyer Jnr., “Chapter 19 of the NAFTA: Binational Panels as the Trade Courts of Last Resort,” in Judith H. Bello et al. (eds), The North American Free Trade Agreement: A New Frontier in International Trade and Investment in the Americas (Washington, DC: Section of International Law and Practise, the American Bar Association and the International Lawyer, 1994), p. 429. Substantively, there were a number of significant differences between Mexican trade law and American or Canadian trade law.Google Scholar
  4. See Maxwell A. Cameron and Brian W. Tomiin, The Making of NAFTA: How the Deal Was Done (Ithaca, NY: Cornell University Press, 2000), p. 48.Google Scholar
  5. 6.
    See NAFTA article 1905. The mechanism is that if a party alleges interference in the panel process, that party can request consultations. If consultations are not satisfactory, a Party can request the formation of a special committee. The special committee will make a finding on the charge of improper interference with the panel process, after which the parties will try to seek a mutually satisfactory solution within 60 days. If no solution is reached, the complaining party can suspend the operation of the AD/CVD panel system with respect to that party or suspend any other benefits under NAFTA. See Gary N. Horlick and F. Amanda Debusk, “Dispute Resolution under NAFTA: building on the U.S.-Canada FTA, GATT and ICSID,” Journal of World Trade 21 (1993), 34.Google Scholar
  6. 9.
    Fernando de Mateo Venturini, “NAFTA, Foreign Direct Investment and Economic Integration: A Mexican Approach,” in Migration, Free Trade and Regional Integration in North America (Organisation for Economic Co-operation and Development, 1998), pp. 195, 201.Google Scholar
  7. 10.
    Barry Appleton, Navigating NAFTA: A Concise User’s Guide to the North American Free Trade Agreement (Toronto: Carswell Legal Publications, 1994), p. 149.Google Scholar
  8. 12.
    Michael Gestrin and Alan M. Rugman, “The North American Free Trade Agreement and Foreign Direct Investment,” in Companies Without Borders: Transnational Corporations in the 1990s (Toronto: Blachwell, 1996), p. 188, and p. 192 for the following quotation.Google Scholar

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© Gustavo Vega-Cánovas 2005

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  • Gustavo Vega-Cánovas

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