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TRADE DISPUTE RESOLUTION: WHAT ARE THE MECHANISMS?

TRADE DISPUTE RESOLUTION: WHAT ARE THE MECHANISMS?. Mary E. Burfisher, ERS/USDA Terry Norman, Ag. & Agrifood Canada Renee Schwartz, FAS/USDA. WHY ARE TRADE DISPUTE MECHAMISMS IMPORTANT?. Create orderly, rules-based system that facilitates trade Protect the interests of all parties

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TRADE DISPUTE RESOLUTION: WHAT ARE THE MECHANISMS?

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  1. TRADE DISPUTE RESOLUTION: WHAT ARE THE MECHANISMS? Mary E. Burfisher, ERS/USDA Terry Norman, Ag. & Agrifood Canada Renee Schwartz, FAS/USDA

  2. 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

  3. DISPUTE RESOLUTION MECHANISMS • FORMAL:Legalistic, strictly specified rules of procedure and timetables; consultations, panel, win/lose outcomes • INFORMAL:Ad hoc processes defined by participants, consensus outcomes

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

  5. 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)

  6. 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

  7. Disputes Settled under Ch. 20 • Two disputes:Canadian TRQ’s on poultry, dairy, barley and margarineU.S. safeguards on broom corn brooms from Mexico

  8. 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

  9. 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

  10. WTO panels • Canadian fluid milk TRQ and certain milk pricing practices • Mexican HFCS duties

  11. INFORMAL VENUES • Government to government negotiations • Industry to industry negotiations • Technical consultation/assistance

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

  13. 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

  14. Technical Consultation, Assistance • U.S.-Mexico Emerging Markets Project • NAFTA SPS Committee

  15. 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

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