 | Free Trade Area of the Americas (FTAA) |
FTAA Draft Text, Canada's Positions and Proposals, and Frequently Asked Questions
Draft Chapter on Dispute Settlement - Canada's Position and Proposal
Canada's Position
An effective dispute settlement system is of crucial importance to the success of the FTAA Agreement.
Canada's position is that the dispute settlement systems in the World Trade Organization (WTO)
Dispute Settlement Understanding (DSU) and NAFTA chapter 20 provide sound models for the
Agreement. At the same time, experience with dispute settlement under the DSU and NAFTA has
identified room for improvements in both models that Canada will pursue in the FTAA Agreement.
Under the dispute settlement model that Canada envisages for the FTAA Agreement, dispute
settlement would be commenced by consultations. If a mutually satisfactory resolution of the dispute
cannot not be achieved through consultations, the parties to the dispute could agree to use good offices,
conciliation or mediation. If they do not decide to go that route or having taken it do not succeed in
settling their dispute, the complaining party could require a panel procedure based on exchanges of
written pleadings and hearings. This procedure would result in a decision on the merits of the dispute
by a neutral panel of adjudicators. Canada supports an FTAA Agreement dispute settlement system
that would allow for appellate review of panel decisions.
Canada believes that the implementation of panel and appellate body decisions will be of critical
importance to the effective functioning of the Agreement's dispute settlement system. We will be
attentive to opportunities to work closely with negotiating partners to improve, wherever possible,
measures designed to encourage compliance with panel and appellate body determinations.
As most participants in the FTAA Agreement negotiations are also members of the WTO and various
regional and bilateral free trade agreements, Canada attaches importance to having clear rules on the
choice of forum for trade disputes which could be settled under more than one agreement. Canada
supports transparency in dispute settlement along the lines that it has pursued in the WTO. For
example Canada supports making pleadings publicly available and having a more open hearing process.
Elements of Canada's position on dispute settlement in the FTAA Agreement were previously made
publicly available in the Government Response to the Report of the Standing Committee on Foreign
Affairs and International Trade on the "Free Trade Area of the Americas: Towards a Hemispheric
Agreement in the Canadian Interest". (Recommendation 29)
In general, the Government agrees with Recommendation No. 29 which states that in principle
Canada should negotiate a dispute settlement system in the FTAA that is based on the WTO
model. In fact, this is part of the negotiating guidelines given to all parties in the FTAA. The San
Jose Ministerial Declaration of March 1998 says that, inter alia, the FTAA will be
WTO-consistent (Article II, para. 9). The San Jose guidelines specific to dispute settlement
expressly state that a fair, transparent and effective mechanism should be developed taking into
account the WTO Dispute Settlement Understanding (DSU).
That said, it will be important for Canada to consider some of the lessons learned from
operation of the DSU, and particularly to follow the progress of the DSU review. For example,
Canada may wish to negotiate an FTAA dispute settlement mechanism that reflects our stated
position on certain important areas such as the need to clarify the procedure for implementation
of WTO rulings and our desire to increase the transparency of the dispute settlement system.
The Government also agrees that it will be important to devise mechanisms which address the
relationship of WTO, regional and bilateral dispute settlement mechanisms. Provisions of this
nature have been addressed in other agreements, for example Article 2005 of NAFTA, and
will have to be considered in the FTAA context.
The negotiations on dispute settlement since the first release of the draft text have concentrated on removing brackets from text where possible and refining the wording of draft provisions. The Canadian position will continue to evolve to reflect experience in the WTO and under NAFTA as well as developments in the negotiation of the institutional provisions and the substantive rights and obligations in the FTAA Agreement.
Canada's Proposal
Dispute Settlement
Choose Another Topic
Back to the FTAA Menu page
|
