Originally from the ICDR Handbook on International Arbitration & ADR - Third Edition

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I.    Introduction

The emergence of the North American Free Trade Agreement (NAFTA) brings with it increased private-party business dealings.  Accordingly, there is greater likelihood that private-party disputes will arise in business relationships between parties under NAFTA.  Not only will these disputes arise, they will be much more complicated and delicate because of the cultural dynamics, language barriers, and differing traditions of law.

Mediation is an effective method of dispute resolution. Mediation, as often defined synonymously with the process of conciliation, is a “…non-binding intervention by a neutral third party who helps the disputants negotiate an agreement.”  It can be especially effective when dealing with private companies that have a myriad of additional issues when doing business under the NAFTA agreement. 

Presently, NAFTA consists of not only three countries (U.S., Canada, and Mexico), but also various cultures, languages, nationalities, and legal systems. Each of these factors plays a unique role in how one private business entity does business with another. Additionally, these diversities complicate the resolution of their disputes. It is because of these unpredictable variables that mediation has not yet come to be the preferred method of resolving NAFTA disputes. Parties often avoid change by choosing a dispute resolution method that they have used in the past. These inhibitions delay the use of a process that would actually provide a more compatible resolution. So, the question is what changes are necessary to increase the use of mediation in the resolution of disputes between private parties that are operating under NAFTA?