TRADE DISPUTE RESOLUTION: WHAT ARE THE MECHANISMS?

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TRADE DISPUTE RESOLUTION WHAT ARE THE
MECHANISMS?

• Mary E. Burfisher, ERS/USDA
• Terry Norman, Ag. Agrifood Canada
• Renee Schwartz, FAS/USDA

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WHY ARE TRADE DISPUTE MECHAMISMS IMPORTANT?

• Create orderly, rules-based system that
  facilitates trade
• Protect the interests of all parties
• Prevent disputes from occurring or escalating

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DISPUTE RESOLUTION MECHANISMS

• FORMALLegalistic, strictly specified rules of
  procedure and timetables consultations, panel,
  win/lose outcomes
• INFORMALAd hoc processes defined by
  participants, consensus outcomes

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FORMAL MECHANISMS

• NAFTA Chapter 19 on AD, CVD
• NAFTA Chapter 20 on interpretation of
  agreement
• National AD or CVD actions
• WTO dispute settlement process

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Chapter 19 and 20 process

• Consultations (ch. 19) or meeting of Commission
  (ch. 20) provide a venue for mediating a
  resolution
• Arbitral panels are formed when consultation
  fails, legalistic process with a win/lose outcome
• Appeal process Decisions can be appealed (ch.19)
  or reconsidered (ch. 20)

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Ch. 19 Actions

• Panel reviewsMexican AD on US HFCSUS refined
  sugar exports to CanadaUS AD on Canadian swine
  exports Mexican fresh cut flower exports to US

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Disputes Settled under Ch. 20

• Two disputesCanadian TRQs on poultry, dairy,
  barley and margarineU.S. safeguards on broom
  corn brooms from Mexico

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NATIONAL AD OR CVD ACTIONS

• NAFTA members have independent processes, but
  must abide by Chapter 19 disciplines
• AD are imposed when imports sold at less than
  fair market value and domestic injury occurs
• CVD are imposed to offset foreign subsidies if
  domestic injury occurs

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WTO Panel Process

• NAFTA members can pursue matters covered by both
  NAFTA and WTO, but can only use one venue at a
  time
• Consultations provide opportunity to mediate a
  resolution
• Panel is formed if consultations fail
• Outome is win/lose, and may be appealed

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WTO panels

• Canadian fluid milk TRQ and certain milk pricing
  practices
• Mexican HFCS duties

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INFORMAL VENUES

• Government to government negotiations
• Industry to industry negotiations
• Technical consultation/assistance

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Governmental

• Standing committees Committee on Agricultural
  Trade Nafta SPS Committee
• U.S.-Canada ROU Understanding
• U.S.-Mexico tomato agreement

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PRIVATE INDUSTRY NEGOTIATIONS

• Advisory Committee on Private Commercial Disputes
  regarding Agricultural Goods Fruit and
  Vegetable Dispute Resolution Corp.
• Northwest Cattle Project
• US-Mexican grape industry agreement on labeling

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Technical Consultation, Assistance

• U.S.-Mexico Emerging Markets Project
• NAFTA SPS Committee

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CONCLUSIONS

• Evolving mechanisms for trade dispute resolution
  help to prevent disputes from occurring or
  escalating
• Voluntarism is foundation of both formal and
  informal mechanisms
• Trade dispute resolution mechanisms cannot deal
  effectively with differences that were unresolved
  when negotiating the pact