Dispute Resolution Under Chapter 18 of the Canada-United States Free Trade Agreement* – Vol. 1 No. 3

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AuthorAvraham J. Azrieli**

Published: October 1990

Description: The Canada-United States Free Trade Agreement (“FTA” or “Agreement”) was signed by President Reagan and Prime Minister Mulroney on January 2, 1988, and became effective in both Canada and the United States on January 1, 1989. The FTA represents a major achievement in the creation of a “global village,” eliminating tariffs and protectionist trade barriers between the U.S. and Canada, the two largest trading partners in the world. It reduces barriers to bilateral activities in the fields of energy, services, and investments. Subsidies and antidumping measures, however, continue to be governed by the General Agreement on Tariffs and Trade (GATT). Chapters 18 and 19 establish the FTA’s dispute settlement mechanism. Chapter 19 is restricted to countervailing and anti-dumping actions, providing for binding rulings by ad hoc binational panels. Chapter 18 creates the mechanism for avoidance and settlement of all other disputes under the FTA. It establishes the Canada-U.S. Trade Commission (“Commission”) to monitor the implementation of the FTA and provides for an ad hoc binational panel of arbitrators. This paper assesses the dispute settlement mechanism provided by chapter 18. This will be done in light of the history of the Parties’ trade relations, their arbitration laws, and alternative mechanisms provided in other contractual trade areas.

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*Notes & Comments
**LL.B. Bar Ilan University, Israel, 1988; LL.M. Columbia Law School, 1990. Law clerk to Hon. Frank A. Kaufman, U.S. District Court for the District of Maryland. The author expresses his gratitude to David Goldman and Catherine Valcke, Columbia Law 1991, and Hollis Greenlaw, Columbia Law 1990, for their helpful comments.