Overview of the Dispute Settlement Provisions
The principal dispute settlement mechanisms of the Agreement are found in:
Review of Final Antidumping and Countervailing Duty Determinations
Article 10.12 establishes a mechanism to provide an alternative to judicial review by domestic courts of final determinations in antidumping and countervailing duty cases, with review by independent binational panels. A Panel is established when a Request for Panel Review is filed with the Secretariat by an industry asking for a review of an investigating authority's decision involving imports from a Party to the Agreement.
In Canada, it is the Canada Border Services Agency (CBSA), which makes dumping and subsidy determinations, while the Canadian International Trade Tribunal (CITT) conducts injury inquiries as to whether or not the dumping or subsidy has caused injury or retardation (material retardation of the establishment of a domestic industry) or is threatening to cause injury to the domestic industry.
In the United States of America, it is the Department of Commerce, International Trade Administration, which makes dumping and subsidy determinations, while the United States International Trade Commission conducts injury inquiries.
In Mexico, it is the Secretaría de Economía, Unidad de Prácticas Comerciales Internacionales that makes both the dumping /subsidy and injury determinations. These agencies are referred to as investigating authorities. The dumping, subsidy and injury determinations of the investigating authorities can also be appealed, in Canada to the Federal Court of Canada, in the United States to the Court of International Trade and in Mexico to the Tribunal Fiscal de la Federación.
Extraordinary Challenge Procedure
Although Chapter 10 panel decisions are binding, there is one level of review of binational panel decisions that a Party to the Agreement may initiate in extraordinary circumstances. This is known as the Extraordinary Challenge Committee (ECC) procedure. The challenge is not an appeal of right but a safeguard to preserve the integrity of the panel process. If either government believes that a decision has been materially affected, by either a panel member having a serious conflict of interest, or the panel having departed from a fundamental rule of procedure or having exceeded its authority under the Agreement, either government may invoke review by a three-person, binational Extraordinary Challenge Committee, comprised of judges and former judges. ECC decisions, like Chapter 10 binational panel decisions, are binding as to the particular matter addressed.
Safeguarding the Panel Review System
Article 10.13 provides a mechanism for safeguarding the panel review system. Under this article, a three-member special committee may be established to, among others, review allegations of one Party that the application of another Party's domestic law has interfered with the proper functioning of the panel system.
Settlement of Disputes between a Party and an Investor of Another Party
Annex 14-C addresses the transition between NAFTA to CUSMA regarding “Legacy Investment Claims and Pending Claims”. Two annexes (Annexes 14-D and 14-E) only apply between Mexico and the United States regarding investment disputes.
Eligible investors may have recourse to one of the following arbitral mechanisms:
- the ICSID Convention and the ICSID Rules of Procedure for Arbitration Proceedings;
- ICSID's Additional Facility Rules;
- the rules of the United Nations Commission for International Trade Law (UNCITRAL Rules); or
- if the claimant and respondent agree, any other arbitral institution or any other arbitration rules.
View Chapter 14 Disputes:
- Mexico, and
- United States of America.
Institutional Arrangements and Dispute Settlement Procedures
The dispute settlement provisions of Chapter 31 are applicable to disputes (with certain exclusions) regarding: the interpretation or application of the Agreement; a Party’s failure to carry out an obligation under the Agreement; an actual or proposed measure of a Party that another Party believes is or would be inconsistent with an obligation under the Agreement; and the nullification or impairment of benefits that a Party could reasonably have expected under the Agreement. The steps set out in Chapter 31 are intended to resolve disputes by agreement, if at all possible. The process begins with government-to-government (the Parties) consultations. If the dispute is not resolved, a Party may request the establishment of a five-member panel. The disputing Parties may also agree to a panel comprised of three members.
Pursuant to the Agreement, the Parties have established several rosters of individuals from which panelists are appointed to settle disputes. Currently, there are Agreement rosters (one per country) for Chapter 10 (Antidumping and Countervailing Duty Matters and Extraordinary Challenge Procedure) and Chapter 31 (for General State to State, for the Rapid Response Labour Mechanism).
When a binational dispute arises under Chapter 10, a panel of five members is selected by the involved governments. Each government in the dispute (through its trade minister) appoints two panelists, in consultation with the other involved government (Chapter 10 panels are always binational in composition). The involved Parties normally shall appoint panelists from the roster, but are not required to do so. The fifth panelist is to be chosen by agreement between the governments, but failing this the government that gets to select the fifth panelist is determined by lot (such as a coin toss). On appointment of the fifth panelist, the panelists shall promptly appoint a chair from among the lawyers on the panel by majority vote of the panelists. If there is no majority vote, the chair shall be appointed by lot from among the lawyers on the panel. In the case of an ECC or Special Committee procedure, each involved Party shall select one member from the roster established under Annex 10-B.3(1) and the involved Parties shall decide by lot which of them shall select the third member from this roster.
For a general State-to-State disputes under Chapter 31, the disputing Parties shall endeavor to agree on the chair of the panel within 15 days of the delivery of the request to establish a panel. The chair may be a citizen of a CUSMA Party or any other country. If the disputing Parties are unable to agree on a chair, there is a process set out in Chapter 31 to do so. For general State-to-State disputes with two disputing Parties, each disputing Party must select two panelists who are citizens of the other disputing Party. For general State-to-State disputes with more than two disputing Parties, the responding Party must select one panelist who is a citizen of one complaining Party and a second who is a citizen of the other complaining Party. The complaining Parties must select two panelists who are citizens of the responding Party. If a disputing Party fails to elect its panelists within 15 days of the selection of the chair, there is a process set out in Chapter 31 to do so.
For disputes under Chapter 31’s Canada-Mexico Facility-Specific Rapid Response Labor Mechanism or United States-Mexico Facility-Specific Response Labor Mechanism, the Secretariat selects by lot one panelist from the complainant Party list, one from the respondent Party list, and one from the Joint List, within three business days from the date of a request to establish a panel.
Prior to being nominated to a panel, candidates must complete an availability and a Disclosure Statement. The Code of Conduct is fundamental to the panel process. A governing principle is that candidates, panelists, and their assistants and staff must disclose any interest, relationship or matter that is likely to affect their independence or impartiality or that might create an appearance of impropriety or bias.
Agreement panelists and committee members are not permanent arbitrators, but are appointed on an ad hoc basis.
Remuneration and Payment of Expenses
Article 30.6(3) states that the Secretariat shall be responsible for the payment of remuneration to and expenses of panels and committees.
Under Chapter 31, the remuneration of panelists, assistants, and experts, and all administrative expenses of the panel, are borne equally by the disputing Parties.
Rules of Procedure
The Chapter 10 binational panel review process is guided by the Rules of Procedure. Deadlines are prescribed by the legislation, regulations, and the Agreement for filing of pleadings and all other procedures to assure that panels reach final decisions within 315 days of the filing of the Request for Panel Review (see Figure 1 for an ideal timeline).
Chapter 31 is also guided by Rules of Procedure. The dispute settlement process is scheduled to take approximately five months (see Figure 2 for an ideal timeline).
Under both of these processes, the participants may submit written submissions to the panel and at least one hearing will take place.
For further information, consult the texts of the Agreement.
Panel Decisions and Reports
Chapter 10 panels review final antidumping (AD) and countervailing duty (CVD) determinations solely to determine, based on the administrative record, whether the relevant administrative agency applied its national AD/CVD laws correctly. The panels will employ the same standard of review and the same general legal principles, as would a domestic court in the country where the determination was made.
The decision of a panel under Chapter 10 is binding. In its decision, a panel may do one of two things. It may uphold the final determination, or it may remand it - i.e. send it back - to the investigating authority. In the later case, the panel may issue a second decision on the agency's determination on remand.
A panel report under Chapter 31 contains: (a) findings of fact; (b) determinations of whether: the measure at issue is or would be inconsistent with a Party's obligations under the Agreement or nullifies or impairs benefits that a complaining Party or Parties could reasonably have expected under the Agreement; or that a Party has otherwise failed to carry out its obligations under the Agreement; (c) any recommendations the panel might offer to resolve the dispute, if the disputing Parties have jointly requested them; and (d) the reasons for the panel’s findings and determinations.
|Article 10.12(14)(a) and Article 16 (Rules of Procedure)||Request for Panel Review filed||Day 0|
|Article. 10.12(14)(b) and Article 18 (Rules of Procedure)||Complaints to be filed||Within 30 days after Request for Panel Review|
|Article 19 (Rules of Procedure)||Notices of Appearance to be filed||Within 45 days after Request for Panel Review|
|Annex 10-B.1.3||Panel Selection to be completed by the Parties by||Day 55|
|Article 20 (Rules of Procedure||Final Determination, Reasons, Index and Administrative Record to be filed||Within 15 days after filing of Notice of Appearance|
|Annex 10-B.1.3||Parties to select 5th Panelist by||Day 61|
|Article. 10.12(14)(c)||Briefs by Complainants to be filed||Within 60 days after filing of Administrative Record|
|Article. 10.12(14)(d)||Briefs by Respondents to be filed [||Within 60 days after Complainants' Briefs|
|Article. 10.12(14)(e)||Reply Briefs to be filed||Within 15 days after Respondents’ Briefs|
|Article 29(4)(Rules of Procedure||Appendix to the Briefs to be filed||Within 10 days after Reply Briefs|
|Article. 10.12(14)(f)||Panel to convene and hear oral argument||Within 15 to 30 days after Reply Briefs|
|Article 10.12(14)(g)||PANEL DECISION DUE||90 days after oral argument (315 days after Request for Panel Review)|
|Article 31.6||Request for Panel filed on||Day 0|
|Article 31.9(1)(b) or Article 31.9(2)(b)||Selection of Chair to be completed||Within 15 days after Request for Panel|
|Article 31.7(1)||Terms of Reference agreed to by the disputing Parties may be filed||Within 20 days after delivery of Request for Panel|
|Article 31.9(1)(d) or Article 31.9(2)(d)||Panel Selection to be completed||15 days after selection of Chair|
|Article 18: Written Submissions and Other Documents (Rules of Procedure)||Initial Written Submission (Complaining Party) to be filed||No later than 7 days after Panel selection is completed|
|Article 18: Written Submissions and Other Documents (Rules of Procedure)||Written Counter-Submission (Party Complained Against) to be filed||No later than 31 days after Initial Written Submission|
|Article 21: Hearings (Rules of Procedure)||List of participants, representatives or advisers attending the hearing to be delivered||No later than 5 days before the hearing|
|Article 7 Article 18: Written Submissions and Other Documents (Rules of Procedure)||Hearing to be held by||No later than 14 days after the submission of the Supplementary Written Submission of the Party Complained Against|
|Article 18: Written Submissions and Other Documents (Rules of Procedure)||Supplementary Written Submission of the Complaining Party to be filed||No later than 21 days after Counter-Submission (of Party Complained Against)|
|Article 18: Written Submissions and Other Documents (Rules of Procedure)||Supplementary Written Submission of the Party Complained Against to be filed||No later than 21 days after the Supplementary Written Submission of the Complaining Party|
|Article 31.17(1)||Initial Report presented by Panel||No later than 150 or 120 (for perishable goods) days after Panel selection is completed|
|Article 31.17(3)||Comments on Initial Report to be filed by a disputing Party||No later than 15 days after presentation of Initial Report|
|Article 31.17(5)||Final Report presented by Panel||No later than 30 days after Initial Report|
- Date Modified: