The USMCA dispute settlement mechanism has been successful | Brookings

The article argues that the USMCA’s dispute settlement mechanism (DSM) has been successful, particularly in improving panel formation processes compared to its NAFTA predecessor. A key objective during negotiations was to address the ease with which panel formation could be blocked under NAFTA, and the USMCA has demonstrably improved in this regard, with panels being formed and reports issued without significant delay. The United States sought modifications to avoid perceived overreach by panelists, a concern stemming from experiences with the World Trade Organization’s (WTO) Appellate Body. While some view these modifications as dilutions of the DSM, the article contends they reflect a fundamental difference in approach to dispute settlement – the US perspective prioritizes credible outcomes and domestic political feasibility over strict adherence to binding rulings.

In the five years since the USMCA’s implementation, four state-to-state disputes have been completed, a higher number than finalized under NAFTA in 25 years. The United States prevailed in disputes regarding Canadian dairy tariffs and Mexico’s ban on genetically modified corn, leading to amendments in both countries. Canada successfully challenged the U.S. solar safeguard measures, also resulting in U.S. adjustments. A dispute concerning auto rules of origin remains pending.

The author concludes that while the DSM isn’t a panacea and won’t resolve all issues, it has proven effective as a tool for addressing trade disputes and demonstrating the value of efficient, timely, and credible dispute resolution. The article suggests continuing to utilize the mechanism and refining it based on practical experience, rather than dismantling it.

(Source：Brookings)