Originally from: Fifteen Years of NAFTA Chapter 11 Arbitration 

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This contribution reviews the interpretive powers of the NAFTA Free Trade Commission (FTC) and the relationship of such powers with the rule of law. More specifically, it seeks to determine whether such powers promote or hinder the rule of law.1 It addresses this topic in three steps: first, it sets out the treaty framework; second, it addresses the FTC’s interpretation of 2001; third, it reflects on the effects of the FTC’s interpretive powers on the rule of law.

I. TREATY FRAMEWORK
Article 2001 of the NAFTA2 establishes the FTC, composed of “cabinet level representatives” of the NAFTA parties or their designees. The FTC has the power to supervise the implementation of the NAFTA, oversee its further elaboration, and “resolve disputes that may arise regarding its interpretation or application.”3 Interpretations issued by the FTC “shall be binding” upon Chapter 11 arbitral tribunals pursuant to Article 1131(2). The preceding paragraph of that provision states that Chapter 11 tribunals “shall decide the issues in dispute in accordance with this Agreement and applicable rules of international law.”