Abstract
In bringing about the largest bilateral trade relationship in human history (between Canada and the United States), North American integration wrestled against stubborn nationalistic practices and infinite bilateral feuds right from the very start—as the previous two chapters exposed over trade and investment.1 Not surprisingly, then, dispute settlement was made an essential component of regional integration: its inevitable role in an uneven terrain profited from both incremental growth and incidental developments. It was also not surprising that Canada’s withdrawal from CUFTA negotiations on September 23, 1987, which opened up North America’s experimentation with dispute settlement,2 was combined with the US proposal for premising this upon a binational panel framework to adjudicate dumping/countervailing disputes.3 The resultant arrangements were both institutionally novel and pragmatic enough to both countries for Gilbert R. Winham to call them a “linchpin,”4 and to set the stage for even more breathtaking arrangements to deal with investment disputes.
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Notes
On one aspect of the prevailing problems, see Gary N. Horlick and Debra P. Steger, “Subsidies and countervailing duties,” Making Free Trade Work, ed., Peter Morici (New York: Council on Foreign Relations Press, 1990), ch. 4.
More on the role of the Canadian government on free trade in Stephen A. Scott, “NAFTA, the Canadian constitution, and the implementation of international trade agreements,” Beyond NAFTA: An Economic, Political and Sociological Perspective, eds., A. R. Riggs and Tom Velik (Vancouver, BC: Fraser Institute, 1993), 238–51; and “Forum: Binational dispute resolution procedures under the Canadian-United States Free Trade Agreement: Experiences to date and portents for the future,” New York University Journal of International Law & Politics 24, no. 1 (Fall 1991): 341–438.
It was proposed by US Treasury Secretary James Baker, but originated with Sam Gibbons, Chairman of the House Ways and Means Trade Subcommittee in the US Congress. See Gilbert R. Winham, Trading with Canada: The Canada-U.S. Free Trade Agreement (New York: Priority Press, 1988), 42.
How NAFTA’s dispute settlement was influenced by GATT discussed by Armand de Mestral, “NAFTA dispute settlement panels: Theory and practice,” Beyond NAFTA: An Economic, Political, and Sociological Perspective, eds., A. R. Riggs and Tom Velik (Vancouver, BC: Fraser Institute, 1993), 260–72.
Ernst B. Haas, Uniting for Europe: Political, Social, and Economic Forces, 1950– 1958 (Stanford, CA: University of Stanford Press, 1958);
and Andrew Moravcsik, “Negotiating the Single European Act: National interests and conventional statecraft,” International Organization 45, no. 1 (Winter 1991): 19–56.
Quoted part is title of another book by Haas , Beyond the Nation State: Functionalism and International Organization (Stanford, CA: University of Stanford Press, 1964).
Alan B. Rugman and Andrew D. M. Anderson, Administered Protection in America (London: Croom Helm, 1987).
Also see Elizabeth J. Rowbotham, “Dumping and subsidies: Their potential effectiveness for achieving sustainable development in North America,” Journal of World Trade 27, no. 6 (1993): 145–73.
J. Michael Finger, “The measuring of ‘unfair’ in United States import policy,” Minnesota Journal of Global Trade 1, no. 9 (Fall 1992): 35–56.
Richard Boltuck and Robert E. Litan, “America’s ‘unfair’ trade laws,” Down in the Dumps: Administration of the Unfair Trade Laws, eds., Richard Boltuck and Robert E. Litan (Washington, DC: Brookings, 1991), 4–5;
and Eduardo Andere, “The Mexican anti-dumping regime—Regulatory framework, policies and practice,” Journal of World Trade 27, no. 2 (April 1993), 5.
Constraints in Mexico–US interactions pointed out by Sharon Fitch, “Dispute settlement under the North American Free Trade Agreement: Will the political, cultural and legal differences between the United States and Mexico inhibit the establishment of fair dispute settlement procedures?” California Western International Law Journal 22, no. 2 (1991–1992): 353–88.
On the United States, see Jagdish Bhagwati and Hugh T. Patrick, eds., Aggressive Unilateralism: America’s 301 Trade Policy and the World Trading System (Ann Arbor, MI: University of Michigan Press, 1991).
Richard N. Gardner, Sterling-Dollar Diplomacy: The Origins and Prospects of Our International Monetary Order (Toronto, ON: McGraw-Hill, 1969).
Mexico’s inclusion feasibility discussed by Melissa A. Essary, “Can Mexico be incorporated into the free trade agreement’s dispute resolution mechanism?” Implications of a North American Free Trade Region: Multidisciplinary Perspectives, eds., Joseph S. McKinney and M. Rebecca Sharpless (Ottawa: Carleton University Press, 1992), 93–117.
Ironically, NAFTA’s 1994 implementation also marked the hundredth AD anniversary. See Jeffrey M. Drage and Wendy L. Hansen, “Anti-dumping’s happy birthday?” The World Economy 29, no. 4 (April 2006): 459–72.
Alexander L. George, “The method of structured, focused comparison,” Diplomacy: New Approaches in History, Theory, and Policy, ed., Paul Gordon Lauren (New York: Free Press, 1979), ch. 3;
and Alexander L. George and Andrew Bennett, Case Studies and Theory Development in the Social Sciences (Cambridge, MA: MIT Press, 2005).
For the environment, see Christopher Thomas and Gregory A. Tereposky, “The NAFTA and the side agreement on environmental cooperation—Addressing environmental concerns in a North American free trade regime,” Journal of World Trade 27, no. 6 (December 1993): 5–34.
Since neither Canada nor Mexico is an ICSID member, only UNCITRAL applies in NAFTA cases. On the broader issues, Sanford E. Gaines, “The masked ball of NAFTA Chapter 11: Foreign investors, local environmentalists, governmental officials, and disguised motives,” Linking Trade, Environmental, and Social Cohesion: NAFTA Experiences, Global Challenges, eds., John J. Kirton and Virginia W. Maclaren (Aldershot, UK: Ashgate, 2002), ch. 6.
Andrew D. M. Anderson draws broader adaptation to GATT, in Seeking Common Ground: Canada-U.S. Trade Dispute Settlement Policies in the Nineties (Boulder, CO: Westview Press, 1995), esp. ch. 2.
Dumping can be measured in three ways: (a) export price is lower than domestic; (b) production costs spiral higher than sales price; or (c) the export price to an injured country is lower than the export price to another country. From Colin Carter, Robert Stein, and Andrew Schmitz, “The potato war and U.S.Canada agricultural trade,” Canadian Agricultural Trade: Disputes, Actions and Prospect, eds., George Lermer and Kurt K. Klein (Vancouver, BC: University of British Columbia, 1990), 130,
but see ch. 8. Brink Lindsey and Daniel Ikenson fInd problems in how the US Department of Commerce conducts its own dumping measurements. Elaborated in “The rhetoric and reality of U.S. antidumping law,” Anti-dumping: Global Abuse of a Trade Policy Instrument, eds., Bibek Debroy and Debashis Chakraborty (New Delhi: Academic Foundation, 2007), ch. 5.
On how institutionalization is employed here, see Michael Luszting and Patrick James, “Institutionalizing NAFTA,” Law and Business Review of the Americas 11, nos. 3–4 (Summer/Fall 2005): 551–72.
Chad Bown, “Canada’s anti-dumping and safeguard policies: Overt and subtle forms of discrimination,” The World Economy 30, no. 9 (September 2007): 1457–76.
Both OITP and UITP had/have five directors managing (a) dumping and countervailing; (b) material injury; (c) legal counseling; (d) international legal proceedings; and (e) one in overall charge. Both also benefit from the Commission for Foreign Trade Tariffs and Control (La Comisión de Aranceles y Controles de Comercio Exterior—CACCE), established in 1986, and the General Customs Offce of the Department of Finance and Public Credit (Secretaria de hacienda y Crédit Público). CACCE has since become La Comisión de Comercio Exterior (COCEX). More details in Andere, “The Mexican anti-dumping regime”; Eduardo Siqueiros T., “Legal framework for the sale of goods in Mexico,” Doing Business in Mexico, Vol. 1, eds., Andrea Bonime-Blanc and William E. Moore (Irvington-on-Hudson, NY: Transnational Juris Publications, 1994), ch. 2; Gunnar Niels and Adriaan ten Kate, “Anti-dumping protection in a liberalizing country: Mexico’s antidumping policy and practice,” The World Economy 27, no. 7 (July 2004): 967–83;
and Luz Elena Reyes de la Torre and Jorge G. González, “Antidumping and safeguard measures in the political economy of liberalization: The Mexican case,” Safeguards and Antidumping in Latin American Trade Liberalization: Fighting Fire with Fire, eds., J. Michael Finger and Julio J. Nogués (Washington, DC: The International Bank for Reconstruction and Development, 2006).
Any discrepancy between the ITA and ITC is resolved by the US Court of International Trade (USCIT), elaborated by Douglas A. Irwin, “The rise of US anti-dumping activity in historical perspective,” The World Economy 28, no. 5 (May 2005): 651–68.
Elaborated by David S. Huntington, “Settling disputes under the North American Free Trade Agreement,” Harvard International Law Journal 34, no. 2 (Spring 1993): 407–43;
and Jose Luis Siqueiros, “NAFTA institutional arrangements and dispute settlement procedures,” California Western International Law Journal 23, no. 2 (Spring 1993): 383–94.
On this point, see David A. Gantz, “Dispute settlement under the NAFTA and the WTO: Choice of forum opportunities and risks for the NAFTA parties,” American University International Law Review 14, no. 4 (1999): 1025–106.
Theodore Cohn, Emerging Issues in Canada-U.S. Agricultural Trade (Canadian American Center, University of Maine, 1992), 18–25.
One will notice complex interdependence features here. See Robert O. Keohane and Joseph S. Nye, Power and Interdependence: World Politics in Transition (Boston, MA: Little, Brown & Co., 1977), esp. chs. 1–2.
Alan B. Rugman, “Adjustments by multinational firms to free trade,” Economic Opportunities in Freer U.S. Trade with Canada, eds., Fredric C. Menz and Sarah A. Stevens (Albany, NY: State University of New York Press, 1991), 53–5, but see ch. 2;
William A. More, Jr., who believes likewise, reduces NAFTA to the automobile industry interests in Detroit in Continental Shift: Free Trade & the New North America (Washington, DC: Washington Post, 1993), ch. 6.
This is also the conclusion of Greg Anderson, “Can someone please settle this dispute? Canadian softwood lumber and the dispute settlement mechanisms of the NAFTA and the WTO,” The World Economy 29, no. 5 (May 2006): 586, but see 588–610.
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© 2015 Imtiaz Hussain and Roberto Dominguez
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Hussain, I., Dominguez, R. (2015). NAFTA’s “Linchpin”: Dispute Settlement Mechanisms. In: North American Regionalism and Global Spread. Palgrave Macmillan, New York. https://doi.org/10.1057/9781137493347_4
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DOI: https://doi.org/10.1057/9781137493347_4
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