Seeking Common Ground: Canada-U.S. Trade Dispute Settlement Policies in the Nineties

By Andrew D. M. Anderson | Go to book overview

lack of originality in advancing the ideas and procedures that were contained in the earlier Agreement is probably due to the underlying reasons for NAFTA. To a large extent it could be argued that NAFTA did not arise out of a genuine desire for international free trade but instead as an attempt to encourage investment in Mexico (which for all intents and purposes if treated as a company would be declared bankrupt) and to provide a counter-trading block to the EC by the United States, if the recently completed GATT Round had failed (though the United States still has to sign it into domestic law). Perhaps part of the rationale was an attempt to control the northward expansion of Mexico into the United States in the form of illegal immigration, as well as to control "social dumping" by Mexican industry encouraged to locate in the Maquiladoro zones, particularly those that border the United States, with such spillover consequences as pollution. 22

Economists, however, should not look a gift horse in the mouth. While NAFTA has certainly increased the protectionist stance of a country such as Canada to external parties in certain areas with, for example, the increase of North American content requirements in autos from 50 per cent to 62.5 per cent by the year 2002, NAFTA appears to open up more markets than it closes. Many people have argued that Canada by not joining the NAFTA would have shut itself out of the negotiations of what may eventually be a broader hemispheric free trade area. However, NAFTA has still created a problem by providing a series of bilateral trade agreements rather than a truly trilateral FTA with input from all Parties in areas such as the "unfair" trade law and general trade disputes resolution mechanisms.


Notes
1.
Part of this chapter appeared in an earlier version published by Andrew D. M. Anderson and Alan M. Rugman ( 1990), "The Dispute Settlement Mechanisms' Cases in the Canada-United States Free Trade Agreement: ,"An Economic Evaluation George Washington Journal of International Law and Economics, Vol. 24, No. 1:1-43. Permission granted to reprint parts.
3.
For further discussion of the earlier GATT Panel decision on the Salmon and Herring case (USA-89-1807-01) (Arbitration Panel 1989), see McDorman ( 1990a). A good review of the U.S. trade laws and how they have affected the Canadian fishing industry is found in McDorman ( 1990b). For more general background information, see the Financial Post ( 1989) and Solomon ( 1989).
4.
The 1994 GATT Agreements will in future restrict the ability of the United States to unilaterally impose such restrictions, when and if they ratify this Agreement.
5.
See McKenna ( 1994), Fraser ( 1994), Globe and Mail ( 1994), and Toronto Star ( 1994).
6.
See Arbitration Panel ( 1990b), in particular subsections. 7.21, 7.22, 7.38, and 8.01 in Part VIII Summary and Conclusions.

-222-

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