Originally from Alternatives to the High Cost of Litigation

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For now, a dispute over international dispute resolution has been resolved.

The United States, Mexico and Canada recently announced in a joint statement the new United States-Mexico-Canada Agreement, a trade deal intended to replace the North American Free Trade Agreement. The new USMCA is the product of more than a year’s worth of negotiation in which parties frequently disagreed on, among other things, investor-state dispute resolution. See Janyce McGregor, Why NAFTA’s Unloved Investor-State Dispute Chapter May Be in Trouble, CBC News (Sept. 8)(available at https://bit.ly/2oSj1aB).

The USMCA provides major restrictions in the availability and administration of this dispute resolution mechanism. Notably, investor-state dispute resolution will no longer apply to Canada, and its application to the United States and Mexico will be reduced in scope and subject to more stringent preconditions. Generally, cases will go first to domestic courts before escalating to international arbitration.