DISPUTE SETTLEMENT PROCESSES

    Professor Gary Carpentier                           Professor James R. Holbein
    Public Policy Research, Inc.                         Global Trade Consulting
          P.O. Box 77592                                6322 Timarron Cove Lane
     Washington, D.C. 20013                                  Burke, VA 22015
         Tel: 202-547-5678                                  Tel: 703-303-4375
        Fax: 202-547-5671                                   Fax: 703-426-9287
  Email: g.carpentier@verizon.net                        Email: holbein@cox.net

DESCRIPTION AND CREDITS International trade is increasingly important for the
stability of national economies. The multilateral trading system is primarily based upon
the agreements under the World Trade Organization. Increasingly, regional trade or
economic arrangements play an important role. These include the North American Free
Trade Agreement (NAFTA), the European Union (EU), and dozens of regional and
bilateral agreements. Inevitably, trade causes friction between domestic and foreign
interests. This seminar will provide some background on international trade rules and
how trade disputes are resolved within the various regional arrangements. This is a two
credit seminar taught by two adjunct professors with experience in the field.

COVERAGE This seminar explains the fundamentals of how disputes arise and looks at
how various regional trade systems deal with general disputes. Another focus will be
recurrent problem areas, including antidumping and countervailing duties (AD/CVD) and
investment. The seminar is designed to give an appreciation of the importance of
resolving disputes, the balance of political, economic and commercial interests that exist
within disputes, the various mechanisms available and an introduction to the case law that
is evolving, particularly under the North American Free Trade Agreement (NAFTA). It
is a comparative law seminar, so dispute settlement under NAFTA, the EU-Mexico FTA,
MERCOSUR, the US-Chile FTA, and other agreements will be analyzed and discussed.
Because the European Union is covered in depth by other courses, it will not be analyzed
for the purposes of this seminar.

MATERIALS Because the seminar matter is evolving rapidly, the class materials have
been collected by the professors and posted on Blackboard. This syllabus lists the class
materials required for each class. You will be expected to have read all required materials
and to be prepared to discuss the topic for each class session. Some guest lecturers will
make presentations to the class to give practical insights by experts

DISPUTE SETTLEMENT SIMULATIONS In order to provide insight into both the
substantive law applied to trade disputes and the process of decision making by experts or
arbitrators, the class will participate in a two session dispute settlement simulation.
Based upon background information I will provide, each student will prepare some
written and oral materials for use in the exercises. All students are expected to participate
actively in the simulations.
                                      Page 2

ORAL PRESENTATION Each student will be required to make an oral presentation
about a regional trade dispute that has progressed over more than two decades.
Depending upon the number of students in the class, it may be possible to make the
presentations as teams. The exercise is designed to ensure that all students have some
experience in presenting complex legal issues orally, as well as to demonstrate the
complexity and longevity of some major trade problems.

TERM PAPER All students will be required to submit a term paper. Most students will
submit a paper of 15 - 20 pages, including appropriate footnotes and references. Students
may choose to use this paper to comply with the law school's upper level writing
requirement, in which case the paper must be 30 - 35 pages in length, or whatever length
is required by the Registrar. Students are expected to choose their topics as soon as
possible, and to hand in a brief outline of the paper, including a bibliography, by class
week 4. Papers are due on the last day of exams. All papers must be delivered to the
Registrar’s Office to be logged in.

GRADING The term paper will be worth 60%, oral presentation 15%, dispute simulation
15%, and class participation 10%. The grade form for the paper and course are attached
to the syllabus to improve transparency. Outlines for the oral presentations will be given
in the seminar. More than two unexcused absences will diminish substantially the class
participation portion of the final grade.


Week 1       January 10, 2007: Introduction to Dispute Settlement Mechanisms
             under Regional Trade Agreements
              Presentation of the seminar’s outline
              Description of oral presentations and how linked to seminar
              Description of key terminology
              Overview of basic dispute settlement mechanisms
              NAFTA’s Dispute Settlement Mechanisms, Philip T. von Mehren,
                Chap. 7, of Cross-Border Trade and Investment with Mexico:
                NAFTA’s New Rules of the Game, 1997.

Week 2       January 17, 2007: WTO Dispute Settlement – the Multilateral System
              Introduction to the Dispute Resolution Mechanisms under the WTO
              Examples of cases with regional implications
              How WTO Disputes Are Settled, excerpts from Understanding the
                WTO from the www.wto.org.
              WTO Provisions on Regional Trade Agreements, compilation of legal
                provisions from all WTO agreements.
              U.S. Accused of Flouting Global Trade Rules, Washington Post, 10/26/05
                                      Page 3

Week 3      January 24, 2007: Dispute Resolution in Antidumping and
            Countervailing Duties (AD/CVD) Matters
             Presentation of antidumping and countervailing duties law concepts
             Evolution of AD/CVD law in North America
             Controversy concerning use of AD/CVD in regional arrangements
             Background of softwood lumber dispute up to the U.S.-Canada FTA
             Overview and Compilation of U.S. Trade Statutes, Committee on
               Ways and Means, U.S. House of Representatives, June 25, 1997,
               Chapter 2.
             Antidumping Policy as a System of Law, Gary Horlick and Steven
               Sugarman, Chap. 14 of Trade Rules in the Making, OAS 1999, ed.
               Mendoza, et.al.

Week 4         January 31, 2007: NAFTA Chapter 19 – Theory and Institutions
                Explanation of the NAFTA Chapter 19 dispute resolution process for
                  AD and CVD cases – the political and economic forces that dictated its
                  inclusion in the US-Canada FTA and its expansion to NAFTA
                  NAFTA Chapter 19.
                  NAFTA Disputes Overview from the NAFTA Secretariat website.
                  NAFTA Secretariat FAQ, from the NAFTA Secretariat website.
                  Carbon and Certain Alloy Steel Wire Rod from Canada (Final Injury
                   Determination) USA-CDA-2002-1904-09, Panel Decision 8/12/04

Week 5         February 7, 2007: NAFTA Chapter 19 Case Studies and Evaluation
                Analyze past NAFTA Chapter 19 cases as to the law
                Review the underlying political, economic and commercial factors that
                  drive the disputes
                Analyze the effectiveness of the system
                  Carbon and Certain Alloy Steel Wire Rod from Canada (Final Injury
                   Determination) USA-CDA-2002-1904-09, Panel Decision, Panel
                   Decision on Remand 4/18/05

Week 6         February 14, 2007: Basic Dispute Settlement Processes under
               Regional Trade Agreements, the NAFTA Chapter 20 Experience
                Institutional Structures of Agreements
                Analysis of Sources of Disputes
                  NAFTA Chapter 20
                  NAFTA Panel Report, In the Matter of Cross Border Trucking
                   Services,USA-MEX-98-2008-01, Issued Feb. 6, 2001.
                                      Page 4

Week 7         February 21, 2007: Investment Disputes
                Bilateral Investment Treaties, theory and policy
                ICSID and its critical role in investment disputes
                Analysis of the evolution of investment rules in the Americas
                  Toward an Investment Agreement in the Americas: Building on the
                   Existing Consensus, Maryse Robert and Theresa Wetter, Chap. 16 of
                   Trade Rules in the Making, OAS 1999, ed. Mendoza, et.al.
                  U.S. Model Bilateral Investment Treaty

Week 8         February 28, 2007: NAFTA Chapter 11
                Review and study of past cases under NAFTA Chapter 11
                Case: U.S.- owned Metalclad and its successful Chapter 11 challenge
                  in Mexico, followed by litigation in Canada
                  NAFTA Chapter 11
                  NAFTA Investment Arbitration and the Growth of International
                   Economic Law, Todd J. Weiler, 2 Business Law International

Week 9         March 7, 2007: Alternative Regional Approaches
                Review, discuss and analyze regional mechanisms in the context of
                 NAFTA and the global WTO system
                  MERCOSUR, Protocol of Ouro Prieto, 1994, Protocol of Brasilia, 1993.
                  Excerpts from the US-Chile FTA

                         WEEK OFF FOR SPRING BREAK

Week 10        March 21, 2007: Alternative Regional Approaches
                Review, discuss and analyze regional mechanisms in the context of
                 NAFTA and the global WTO system
                  EU-Mexico FTA Dispute Settlement provisions: Goods Title VII,
                   Annex XVI & Appendix I; Services Title V, Annex III. & Appendix I
                  The Mexico-European Community and Member States Economic
                   Partnership, Political Coordination and Cooperation Agreement,
                   James R. Holbein, Omar Guerrero R. and Juan Francisco Torres
                   Landa, 35 International Lawyer Vol. 2, Summer 2001.

Week 11        March 28, 2007: Alternative Regional Approaches
                Review, discuss and analyze regional mechanisms in the context of
                 NAFTA and the global WTO system
                  Excerpts from the US-Central American and Dominican Republic
                   FTA (CAFTA)
                                   Page 5

Week 12     April 4, 2007: Simulation – Negotiation Phase of Dispute
             Materials to be provided by instructor concerning a bilateral dispute
               over fisheries trade.
             The first stage of the exercise is an interagency team negotiation to
               develop a common position for each country, despite differing
               positions for each team member.
             The second stage is a bilateral negotiation between the two country
               teams to resolve the issue.

Week 13     April 11, 2007: Simulation – Arbitration Phase of Dispute

               Materials to be provided by instructor concerning a bilateral dispute
                over fisheries trade.
               The final stage of the exercise is an arbitration of the dispute before an
                international body.
               The exercise will be followed by a discussion by the class.

Week 14     April 18, 2007: Analysis of Dispute Settlement Systems
             Discuss the pros and cons of the NAFTA system in light of other
               regional mechanisms and the global WTO system
             Bigger issues for inclusion in the FTAA include competition law,
               social issues (migration, labor law, health rules), environmental rules,
               and how such disputes might be handled in regional agreements.
             Is there a need for advanced dispute settlement systems for regional
               arrangements despite the role of the WTO in the multilateral context?
             What about the developing economies, small economies and those
               suffering from poverty, corruption and other problems?
               The GATT/WTO Dispute Settlement System and the Negotiations for a
                Free Trade Area of the Americas, Rosine M. Plank-Brumback, Chap.
                15, Trade Rules in the Making
                                     Page 6

Some Helpful Websites

www.ustr.gov (look at more than the NAFTA material)
www.nafta-sec-alena.org (official site for NAFTA disputes)
www.thomas.gov (site for the U.S. Congress, great for research on legislation)
www.gpo.gov (U.S. Government Printing Office – especially good for the Federal
www.ita.doc.gov (U.S. Commerce Department International Trade Administration.
Import Administration issues trade determinations, US&FCS helps exporters, Market
Access and Compliance handles regional matters and the Trade Compliance Center, and
Trade Development handles industry sectors)
www.sice.oas.org (OAS site for trade agreements and many other matters)
www.iadb.org (InterAmerican Development Bank site)
www.fas.usda.gov (U.S. Foreign Agricultural Service)
www.usitc.gov (U.S. International Trade Commission which has tariff info and excellent
resources on numerous trade matters and negotiations)
http://www.economia.gob.mx/ (Mexican Secretaria de Economia)
http://www.dfait-maeci.gc.ca (Canadian Department of Foreign Affairs and International
http://www.citt.gc.ca (Canadian International Trade Tribunal)
http://www.ccra-adrc.gc.ca (Canadian Customs and Revenue Agency)
http://www.ccra-adrc.gc.ca/customs/business/sima/index-e.html (Canadian directory of
trade cases)
http://www.cec.org (Commission for Environmental Cooperation)
http://www.naalc.org (North American Agreement on Labor Cooperation)
www.wto.org (World Trade Organization – many trade disputes among the NAFTA
countries are handled at the WTO rather than under NAFTA terms)
http://www.ustr.gov/reports/2004.html USTR 2004 Agenda
http://www.wcl.american.edu/ilsp/welcome.cfm Washington College of Law
http://www.apecsec.org.sg/ APEC Secretariat
http://europa.eu.int/ European Union gateway
http://www.oecd.org/SiteMap/0,2681,en_2649_37431_1_1_1_1_37431,00.html OECD
Trade Site map for economic and other reports on trade
http://www.sice.oas.org/Indexe.asp SICE database on the Americas
http://www.natlaw.com/mexico.htm University of Arizona website
http://wehner.tamu.edu/mgmt.www/nafta/weblinks/Index.htm NAFTA Website
                                     Page 7

                        FINAL PAPER AND GRADE SHEET

Your grade on the course paper consists of the three weighted segments indicated below.
The individual lines within each segment indicate what level of excellence you have
attained as follows:
Sections I & II: A = 5, B = 4, C= 3. Section III: A = 10, B = 8, C = 6 or lower.
The standard grade ranges for the papers and the course are: 100-96 = A; 95-90 = A-; 89-
87 = B+; 86-83 = B; 82-80 = B-; 79-75 = C+; 74-70 = C; 69-60 = D
I.     Writing and Form                     (25 points)                  ________
       _____ Complied with page limits and time limits
       _____ All sections of paper clearly marked
       _____ Clearly written
       _____ Well organized
       _____ Grammar, punctuation, spelling
II.    Descriptive Method                   (25 points)                  ________
       _____ Clear & complete executive summary
       _____ Trade issue adequately described
       _____ Legal issues adequately described
       _____ Dispute settlement options adequately described
       _____ All other relevant components are adequately described
III.   Analysis                             (50 points)                  ________
       _____ Cogent reasoning in analyzing problem
       _____ Reasoning supported with appropriate data
       _____ Appropriate citations in text to support reasoning
       _____ Legal analysis complete and appropriate to topic
       _____ Strategy recommendations clearly tied into analysis
                                                     TOTAL POINTS:       ________

                      Paper          _____ x .60 =         ________
                      Simulation     _____ x .15 =         ________
                      Presentation   _____ x .15 =         ________
                      Participation _____ x .10 =          ________
              TOTAL NUMERICAL GRADE =                      ________
FINAL LETTER GRADE FOR COURSE =                                          __________

To top