Resolving International Trade Disputes:
The GATT Multilateral and the
Canada-U.S. FTA Bilateral DSM Processes
During the Canada-U.S. free trade negotiations, Canada tried to make sure that the Canada-U.S. Free Trade Agreement (FTA) would contain various methods to curtail the worst excesses of any bias in the administration of U.S. trade laws. In order to do that, Canada and the United States eventually agreed to put in place a binational dispute settlement mechanism (DSM) process consisting of binational review panels. 1 These panels would be able to conduct judicial reviews of the administrative record of each trade dispute case, thereby encouraging better procedures in the application of those U.S. trade laws against Canadian producers. According to Canada, it was feared that if such procedures were not adopted into an FTA with the United States, the harassment of Canadian exporters to the United States would have increased. The adoption by Canada and the United States of the DSMs will not completely eliminate the possibility of U.S.-based firms (or for that matter, Canadian-based firms) from still attempting to use their nation's trade remedy laws as competitive weapons, but by strengthening the review procedures surrounding the use of the "administrative" trade weapons of AD and CVD, it should help to discourage economically inefficient U.S. -- or Canadian-based firms from launching actions.
Prior to the signing of the Canada-U.S. FTA, approximately 78 per cent of all preliminary U.S. AD and CVD cases went against the Canadian exporters, while nearly 60 per cent of the final decisions were also negative. 2 With the adoption of the Chapter Nineteen panels to handle the reviews of these AD and CVD cases (if they lead to the more economically efficient administration of the trade laws), it should eventually be expected to also lead to a major reduction in the number of cases initiated against Canada whose findings are positive. In this case, by adopting the Canada-U.S. FTA, Canada