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TPD > FTAA > United States Negotiating Positions - Summary > Position

Summary of the United States Negotiating Positions in the FTAA 



Public Summary of U.S. Position

The overall goal of the dispute settlement proposal of the United States is to establish a fair, transparent and effective dispute settlement system among the FTAA countries.

The dispute settlement provisions of the U.S. proposal would apply to disputes between FTAA governments with respect to the interpretation or application of the Agreement. The U.S. proposal does not address any special rules that might be needed with respect to disputes in particular areas; any such special rules would be developed as the negotiations proceed. 

Disputes arising under both the FTAA and the WTO Agreement generally may be settled in either forum at the discretion of the complaining government. This general rule is subject to an exception intended to minimize multiple litigation. Before a country initiates a proceeding under the WTO that also could have been initiated under the FTAA, it must notify the other FTAA governments. If any other FTAA government wishes to employ the FTAA dispute settlement procedures, the potential disputing governments would consult to try to agree on the appropriate forum. Once an FTAA government has chosen a forum, the U.S. proposal would exclude recourse by that government to any other forum.

The first step in the dispute settlement process is for the complaining FTAA government to request consultations with another FTAA government. The countries concerned will then consult and attempt to settle the matter. The request would be notified to the other FTAA countries, who would be free also to request consultations on the same matter.

If consultations do not result in resolution of the matter within 30 days, the complaining FTAA government may request the establishment of an arbitral panel. The panel request would also be notified to the other FTAA countries. The panel will automatically be established within ten days of the request, unless the consulting FTAA governments agree otherwise. 

If another FTAA government considers it has a substantial interest in the matter, it may join as a complainant. If that government does not join in a panel proceeding, it normally must refrain from starting a separate proceeding under the FTAA or WTO Agreement on the same matter. FTAA governments may also choose to become third parties, which entitles them to make written and oral submissions to the panel.

The U.S. proposal specifies that candidates for service on dispute settlement panels would need to have expertise or experience in law, international trade, or other matters covered by or arising under the FTAA Agreement. Panelists would be chosen on the basis of objectivity, reliability and sound judgment, would be independent of the parties participating in the dispute, and would have to comply with a code of conduct which would be annexed to the FTAA Agreement.

The U.S. proposal provides that the FTAA governments would establish Model Rules of Procedure for panels to follow. Such rules would be developed by the FTAA Negotiating Group on Dispute Settlement before the FTAA Agreement would go into effect. The rules would address such issues as procedures for hearings and written submissions by disputing governments. The rules would ensure that with the narrow exception of specific factual information of a confidential nature submitted to the panel, FTAA governments' submissions would be made public and disputing FTAA governments would disclose their legal argumentation to other FTAA governments and the public. Any panel hearing -- except for portions of the hearing addressed to specific factual information of a confidential nature -- would also be open to the public. Interested private persons, organizations or companies would also have opportunities to provide input to the panel

The U.S. proposal provides procedures for the use of experts and scientific review boards to improve the quality of the dispute settlement process, particularly where disputes involve environmental, health, safety or other scientific matters.

Unless the participating governments decide otherwise, the U.S. proposals calls for the arbitral panel to present its initial report within 90 days of the selection of the last panelist. The initial report, which would be distributed only to the FTAA Governments, would contain findings of fact and a determination on whether the measure at issue is or would be inconsistent with a provision of the FTAA Agreement, or nullifies or impairs benefits that the complaining government could reasonably have anticipated under the Agreement. In addition, the panel would include in its initial report any recommendations that it may have to resolve the dispute. If the terms of reference so provide, the report will also contain the panel's findings on the adverse trade effects of any measure that the panel finds to be inconsistent with the FTAA Agreement.

The disputing FTAA governments would be allowed 14 days to provide written comments to the panel on the initial report. Upon receipt of such comments, the panel could seek the views of any FTAA government that participated in the dispute, reconsider its report, or make any further examination that it considers appropriate.

The U.S. proposal calls for the arbitral panel to present its final report to the disputing FTAA governments within 30 days of the presentation of its initial report, unless those governments agree otherwise. The final report, including any report of a scientific review board, must be published immediately unless the disputing FTAA governments meanwhile have decided to suspend the proceeding.

When the disputing FTAA governments receive the final report they must attempt to resolve the dispute, normally in conformity with the panel's recommendations. Whenever possible, the governments are to resolve the dispute by agreeing that any measure found to be inconsistent with the Agreement will be removed, or, where the dispute involved a proposed measure, will not be implemented. If that remedy cannot be agreed upon, the disputing FTAA governments should, where possible, agree on trade compensation for the complaining FTAA government. In the event that the disputing FTAA governments are unable to reach such an agreement, the proposal includes procedures under which the complaining FTAA government may suspend the application to the other government of FTAA benefits equivalent in effect to those benefits that were impaired, or may be impaired, as a result of the disputed measure. 

The U.S. proposal also contains provisions that would require FTAA governments to encourage and facilitate the use of arbitration and other means of alternative dispute resolution for the settlement of private commercial disputes. In addition, the proposal would require FTAA governments to provide appropriate procedures to ensure the observance of agreements to arbitrate and for the recognition and enforcement of arbitral awards.

Source: United States Trade Representative