State-State Dispute Settlement Under the Trans-Pacific Partnership Agreement

Abstract

Most modern preferential trade agreements (PTAs) contain formal state– state dispute settlement mechanisms, and the Trans-Pacific Partnership Agreement (TPP) will be no exception. The addition of Mexico and Canada to the TPP negotiations brings the total number of TPP parties to 11, encompassing Australia, New Zealand, the United States, Peru, Chile, Brunei, Malaysia, Singapore, and Vietnam. This chapter discusses a number of special legal issues facing the TPP parties as they seek to design a well-functioning dispute settlement mechanism to resolve their disputes under the TPP.

First, we discuss the implications of multiple overlapping trade treaties between various subsets of TPP parties, each containing their own dispute settlement systems, which raises questions in relation to conflicts of norms and conflicts of jurisdiction. Second, we consider the rules of interpretation that will be used by tribunals convened under the TPP to construe its terms and settle disputes, including a potential role for the jurisprudence of the World Trade Organization (WTO) dispute settlement system.

Although the TPP parties have not released a draft text of their dispute settlement mechanism, we draw on their rich body of precedents under past PTAs and evaluate their effectiveness in addressing these special legal issues. We find a remarkable degree of diversity and inconsistency in TPP parties’ past practices, with some precedents substantially more effective than others in resolving particular legal problems.

Keywords: preferential trade agreement, Trans-Pacific Partnership Agreement, state-state dispute settlement