NAFTA

1. Discuss the principle reasons why Mexico, Canada, and the United States decide to enter into mutual free trade agreement. What favorable conditions in society, the economy and in regional politics encouraged its adoption? What circumstances discouraged its adoption? The objectives of this Agreement, as elaborated more specifically through its principles and rules, including national treatment, most-favoured-nation treatment and transparency, are to: a. eliminate barriers to trade in, and facilitate the cross-border movement of goods and services between the territories of the Parties; b. promote conditions of fair competition in the free trade area; c. increase substantially investment opportunities in the territories of the Parties; d. provide adequate and effective protection and enforcement of intellectual property rights in each Party's territory; e. create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes; and f. establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement."

Question 2 Discuss the NAFTA approach to addressing free trade in goods , trade in services, and foreign investment?

Question 3 if conflicts arise between or among the three countries what dispute settlement mechanisms are available to the parties? Limit your discussion to chapter 11

If conflicts arises between or among the three countries have mutually accepted the North American Free Trade Agreement (NAFTA), NAFTA's investment chapter (Chapter 11) contains provisions designed to protect cross-border investors and facilitate the settlement of investment

disputes. These provisions allow corporations to sue the national government of a NAFTA country in secret arbitration tribunals if they feel that a regulation or government decision affects their investment in conflict with these new NAFTA rights. If a corporation wins, the taxpayers of the "losing" NAFTA nation must pay the bill. NAFTA's investment chapter (Chapter 11) contains a variety of new rights and protections for investors and investments in NAFTA countries. If cross-border investor believes that a NAFTA government has violated these new investor rights and protections, it can initiate a binding dispute resolution process for monetary damages before a trade tribunal, offering none of the basic due process or openness guarantees afforded in national courts. These actions can be taken by a cross-border investor against a government, if the investor believes that a government has passed laws or regulations that intended to protect their own constituents and their resident businesses' profits. NAFTA's investment chapter (Chapter 11) establishes a mechanism for the settlement of investment disputes that assures both equal treatment among investors of the parties to the agreement in accordance with the principle of international reciprocity and due process before an impartial tribunal. NAFTA stipulates that these proceedings shall be conducted in accordance with either the International Centre for Settlement of Investment Disputes Rules (ICSID) - 1966, the ICSID Additional Facility Rules - 1978 or the United Nations Commission on International Trade Law Rules (UNCITRAL) - 1966. If cross-border investor believes that they have a dispute to settle with a NAFTA government the first step in the process according to NAFTA's investment chapter (Chapter 11) is the serving of a Notice of Intent to Submit a Claim to Arbitration. The Notice of Intent must be submitted by the cross-border investor at least 90 days before the claim is to be formally served. In addition a cross-border an investor may not make a claim if more than three years have elapsed from the

date on which the investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the investor or its enterprise incurred loss or damage. After a 90 day notice period, and provided that 6 months have elapsed from the date the measure giving rise to the claim went into effect, the investor may submit a Notice of Arbitration. The serving of a Notice of Arbitration formally launches the arbitration. A NAFTA cross-border investor who alleges that a host government has breached its investment obligations under NAFTA's investment chapter has the option to choose one of the following arbitral mechanisms:

the World Bank's International Centre for the Settlement of Investment Disputes (ICSID); ICSID's Additional Facility Rules; and The rules of the United Nations Commission for International Trade Law (UNCITRAL Rules). After the affected cross-border investor chooses one of the following arbitral mechanisms this are the rules that shall govern the arbitration procedure. If the cross-border investor is not satisfied with arbitral mechanism available to resolve his dispute, the investor may choose the remedies available in the host country's domestic courts. If the so-called "investor-to-state" cases are litigated, the cases are heard in the special international arbitration bodies of the World Bank and the United Nations, which are closed to public participation, observation and input. The case is hear by a three-person panel composed of professional arbitrators that listens to the arguments in the case and have the powers to award an unlimited amount of taxpayer dollars to corporations whose NAFTA investor privileges and rights they judge to have been impacted. The three-member panel is composed of one arbitrator named by each party to the dispute and a third arbitrator that is named by mutual agreement or

after failing to come to an agreement, by the Secretary-General of ICSID. In the process of reaching their conclusions, the three-member panel is required to decide the issues in dispute in accordance with the provisions of the Agreement, the applicable rules of international law, and all notes of interpretation issued by the NAFTA Commission.