PBCBA BAR BULLETINS pbcba_bulletin_March 2019 | Page 5

ADR C o r n e r
How & Why an ADR Provision Held UP & Survived
the NAFTA 2.0 Negotiations
ROSINE M. PLANK-BRUMBACK
During his presidential campaign, Donald
Trump called the North American Free
Trade Agreement (NAFTA) “a disaster” and
once in office, he initiated negotiations
with Canada and Mexico to change
it.
Among his administration’s goals
for these negotiations was to scrap the
special dispute settlement mechanism
for antidumping and countervailing duty
matters under NAFTA Chapter 19.
Fast forward to the signing on November
30, 2018 by the three government heads
of the Agreement Between the United
States of America, the United Mexican
States, and Canada (USMCA or colloquially
NAFTA 2.0), and one finds the same ADR
provisions intact with some renumbering,
ensconced in Chapter 10 (Trade Remedies)
of the new successor agreement. In the
end, the United States agreed to retain the
mechanism in exchange for greater access
for US dairy and poultry products into the
Canadian market.
A country may protect its market against
foreign unfair trade practices, like dumping
(exporting a product at a price lower than a
firm normally charges on its home market)
or certain sector-specific subsidies, if it
determines that the dumped or subsidized
goods harm or threaten its domestic
industry. This protection may take the
form of an import surcharge on the product;
i.e. an anti-dumping or countervailing duty.
NAFTA Chapter 19 and now USMCA Chapter
10 allows Canada, Mexico or the U.S., whose
goods are the subject of an antidumping
or countervailing investigation in another
NAFTA importing country, to choose to
have the resulting final duty determination
reviewed by an ad hoc binational panel
of experts as to its consistency with
that importing country’s domestic laws,
based on the administrative record. The
binational panel replaces domestic judicial
review in the importing country (e.g., by the
U.S. Court of International Trade (USCIT))
of the final agency decision, applying that
court’s standard of review and the legal
principles it would follow. The NAFTA
binational panel review is unique among
international trade tribunals in that it
is applying domestic law rather than
deciding whether a State Party’s action has U.S.
administrations
have
never
violated its obligations under the relevant wholeheartedly
favored
this
ADR
international agreement.
provision. A majority of the panels have
been established to review U.S. agency
The panel’s decision is binding on the determinations. Little empirical evidence
involved Parties regarding the particular exists to determine whether U.S. interests
matter between them before the panel have been well served by the NAFTA
and cannot be appealed to the importing binational panel review. How can you score
country’s courts. However, there is an wins or losses on multiple findings in any
extraordinary challenge procedure available one complex case, or judge a termination
on limited grounds of gross misconduct, bias or bilateral settlement? Neither is there
or serious conflict of interest by a panelist, evidence that U.S. interests would have
or of the panel breaching a fundamental been better served through sole reliance
rule of procedure or exceeding its authority. on appellate review in home courts like the
To activate this special NAFTA/USMCA USCIT or those in Canada or Mexico. Critics
review, an involved Party--on its own or at of NAFTA panels often maintain that they
the request of private party participants err in applying domestic laws or domestic
who would have standing for judicial judicial standards of review, particularly
review-- must submit a written request for when they find against U.S. agencies. Others
a binational panel to the other involved counter, however, that the problem may be
Party, usually through its national section with the underlying domestic laws or with
of the Agreement’s Secretariat, within 30 the domestic judicial standard of review
days of the official publication of the final that may be less deferential to U.S. agencies
determination. Each side to the dispute than exists for their NAFTA counterparts.
through its trade ministry, selects, in The USMCA has yet to enter into force as it
consultation with the other, two panelists must first pass the U.S. Congress and also
each from a pre-established roster of 75 be ratified by Canada and Mexico. One
non-government affiliated nationals--25 may question Canada’s decision to deem
from each country. The fifth panelist is it essential to maintain this particular
chosen by the two governments from one or ADR provision in the NAFTA successor
the other’s national list, or if no agreement, agreement, but binational panel review
by lot. Roster members (and panelists) are of
antidumping
and
countervailing
generally international trade experts and determinations will continue as long as
lawyers, notwithstanding the preference NAFTA or USMCA exists.
indicated in the rules for judges.

There are established rules of procedures
and a code of conduct for roster candidates,
panelists, their assistants, and staff, aimed
at ensuring the integrity and impartiality of
the process. The various stages of the panel
proceedings are subject to time limits.
Decisions by the panel are by majority vote.
The panel’s powers are limited to upholding
the final antidumping or countervailing
duty determination or remanding it to the
national agency to correct and issue a new
determination “not inconsistent with the
panel’s decision” within a fixed time limit.
The panel may also review the action taken
on remand.
PBCBA BAR BULLETIN 5

Rosine M. Plank-Brumback is a Florida
attorney, trade policy consultant, and
Consulting Senior Fellow at Georgetown
University’s Institute of International
Economic Law. She is on the rosters of
arbitrators under several FTAs. She has
held positions at the Organization of
American States, the GATT Secretariat, the
U.S. Mission to the European Communities,
and the U.S. Foreign Agricultural Service.
For additional ADR tips and resources, go to
http://www.palmbeachbar.org/adr-2/.