Article by Gabriel Cavazos Villanueva and Luis F. Martínez Serna
At the outset, this Article planned to deal with the dispute settlement mechanisms that a Western Hemisphere free trade agreement would eventually include. Because this task seemed too ambitious, we instead decided to raise some of the interesting issues involved in those North American Free Trade Agreement (NAFTA) dispute settlement mechanisms that permit the intervention of private participants. The reasoning was that these NAFTA mechanisms have been quite innovative, and the idea of including something similar in a hemispheric context has been already raised.
It has been said, almost to the point of being cliché, that an international agreement that is not accompanied by specific means to resolve possible controversies is useless. In this context, the Uruguay Round of trade negotiations, at the multilateral level, gave important weight to the improvement of the former General Agreement for Trade and Tariffs (GATT) dispute resolution mechanisms. As a multilateral forum, the World Trade Organization (WTO) only allows the participation of governments in its procedures for the settlement of trade disputes. In contrast, the NAFTA countries negotiated specific mechanisms that allow the participation of private parties. The most important are Chapter 19 (Binational Panel's Review of Antidumping and Countervailing Duty determinations) and Chapter 11-B (Investor-State disputes).
How convenient would it be to extend these mechanisms (or something similar to these mechanisms) to a hemispheric context? This is a difficult question that requires a more in-depth analysis that is, unfortunately, beyond the scope of this Article. However, the Mexican experience, in the context of these mechanisms, and the issues involved in real-life practice may provide some guidance for other Latin American countries. It would not be an exaggeration to say that Mexico, by adopting these dispute settlement mechanisms, also adopted new legal concepts that did not previously exist in its own legal tradition. Thus the actual application of Chapters 19 and 11 has also been an attempt to reconcile common and civil law systems in a free trade area, an endeavor that also would be true in a Western Hemisphere free trade area.
In this context, this Article is divided into three Parts. Part I analyzes the most important issues involved in the Binational Panel's process for handling antidumping and countervailing duty disputes under NAFTA's Chapter 19. For the purposes of this short analysis, we use as an example a recent binational panel's decision in In re High Fructose Corn Syrup. Part II refers to the main issues involved in the Investor-State dispute settlement mechanisms of NAFTA's Chapter 11. For explaining the particular issues in Chapter 11, we use Metalclad v. United Mexican States as an example. In both cases, the final decision of the panel or arbitration tribunal was contrary to Mexican interests, and that makes them more interesting for the purposes of this Article. The last Part of this Article provides a very brief and general conclusion about some of the aspects that should be taken into account if these types of mechanisms are adopted in a hemispheric context.
About the Author
Gabriel Cavazos Villanueva. Director of the Graduate Program in International Commercial and Trade Law of the Monterrey Institute of Technology and Higher Studies, Mexico. LL.M., University of Toronto; LL.M., Tulane Law School.
Luis F. Martínez Serna. Associate, Basham, Ringe y Correa S.C., Monterrey Offices. LL.M., University of Arizona, James E. Rogers College of Law.
Citation
77 Tul. L. Rev. 1017 (2003)