Did you know?

Under NAFTA, Canada, the U.S., and Mexico have all enjoyed strong growth and prosperity.

North American Free Trade Agreement

The North American Free Trade Agreement (NAFTA) includes impartial, rules-based dispute resolution mechanisms to provide the assurance of fairness and predictability that North American businesses need to engage in commercial exchanges. Under NAFTA, our businesses can trade and invest with the knowledge that rules exist to ensure fair treatment and that procedures are in place to settle disputes impartially, on the rare occasions when they occur.

Today, the vast majority of trade and investment among the NAFTA partners takes place in accordance with the clear and well-established rules of NAFTA and the World Trade Organization. While disputes rarely emerge, NAFTA directs those concerned to try to resolve their differences through NAFTA committees and working groups or through other consultations. If no mutually acceptable solution is found, NAFTA also provides for specific formal mechanisms as follows:

Chapter 19 on Anti-dumping and Countervailing Duties

  • Chapter 19 offers exporters and domestic producers an effective and direct route to make their case and appeal the results of trade-remedy investigations before an independent and objective binational panel. This process is an alternative to judicial review of such decisions before domestic courts. This mechanism has been effective in providing for the efficient and impartial review of trade remedy determinations made by the investigating authorities of all three NAFTA partners. To date, panels have sustained some decisions made by domestic investigating authorities, but have also remanded others for reconsideration.
  • The NAFTA Secretariat is responsible for the administration of the Chapter 19 dispute settlement process.

Chapter 20 on General Dispute Settlement

  • Chapter 20 offers a three-step process for resolving disputes regarding the implementation or interpretation of NAFTA provisions:
    1. The first step is the consultation process where the disputing parties formally discuss the disagreement.
    2. If the first step does not resolve the dispute, ministers will try to reach agreement at a Free Trade Commission meeting.
    3. If the second step does not resolve the dispute, the complainant can request that a panel be set up to review the dispute and issue a binding decision.
  • The NAFTA Secretariat is responsible for the administration of the Chapter 20 dispute settlement process.

Chapter 11 on foreign investment

  • Chapter 11 establishes a mechanism for the settlement of investment disputes between investors and NAFTA partners. This process assures both equal non-discriminatory treatment among NAFTA investors (in accordance with the principle of international reciprocity) and due process before an impartial tribunal.