Domestic Petitioners Group Calls for Elimination of NAFTA AD/CV Duty Binational Review Process
The Committee to Support U.S. Trade Laws (CSUSTL) in a Sept. 19 position paper called for the abolition of NAFTA’s Chapter 19 binational antidumping and countervailing duty dispute settlement process, arguing that such disputes would be better adjudicated by the World Trade Organization. No WTO or binding international dispute settlement mechanism existed when NAFTA entered negotiation in the late 1980s, and one of Chapter 19’s benefits in this context was to provide a safeguard for trading partners in the event that one country unilaterally determined another government’s practice to be a subsidy in the absence of any multilaterally agreed definition, the paper says. “Circumstances are dramatically different in 2017,” CSUSTL said. “With the entry into force of the WTO agreements in 1995, detailed definitions of a ‘subsidy’ were established and a binding international dispute settlement mechanism was implemented.”
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Eliminating NAFTA Chapter 19 would resolve “substantial constitutional concerns” about the process, the paper says. Chapter 19 panels and committees have unreviewable authority to direct actions of the Commerce Department and International Trade Commission, yet the NAFTA AD/CV dispute bodies’ members are appointed, in part, by foreign governments not subject to U.S. constitutional oversight or “democratic accountability,” CSUSTL said. “No member of a panel or committee -- even if a U.S. citizen -- can be removed, for cause or otherwise, by the President or any other U.S. constitutional officer without the consent of the foreign government. Such a structure violates the Constitution.”
CSUSTL also argued that NAFTA dispute panels have made poor quality decisions, and have “expressly refused” to follow U.S. binding precedent from the U.S. Court of Appeals for the Federal Circuit in reviews of federal agency action. The position paper concluded: “The time for Chapter 19, if there ever was one, has passed. The United States must demonstrate confidence in its laws, and in its judicial system to insure that those laws are faithfully executed, by ending the failed experiment.”
A spokesman for the Canadian Embassy in Washington reiterated his government's position that Chapter 19 should remain in NAFTA. "North America builds products together, not just selling to each other," he said in an email. "In an environment of just-in-time manufacturing, trade remedy investigations, safeguard actions and national security actions, can be highly disruptive to supply chains on both sides of the border. It is in the interest of all three countries to have fast and effective review such investigations for faulty calculations and errors of law." The Office of the U.S. Trade Representative and Mexican Embassy in Washington didn't comment.
Email ITTNews@warren-news.com for a copy of CSUSTL’s position paper.