What Can the Negotiations of NAFTA 1.0 Teach Us About the Fate of NAFTA 2.0?

16 Pages Posted: 23 Feb 2018 Last revised: 10 Apr 2018

See all articles by Wolfgang Alschner

Wolfgang Alschner

University of Ottawa - Common Law Section

Rama Panford-Walsh

University of Ottawa, Common Law Section, Students

Dmitriy Skougarevskiy

European University at St. Petersburg (EUSP)

Date Written: February 6, 2018

Abstract

To inform current efforts to renegotiate the North American Free Trade Agreement (NAFTA), this paper compiles a digital negotiation history of 42 NAFTA Chapter 11 drafts – the only NAFTA preparatory texts publicly available. Using text-as-data techniques, we distill four lessons learned from these negotiations. First, no country “won” the initial NAFTA negotiation. Instead, in a give-and-take process, each NAFTA party had to let go of some of its original preferences. Second, no alliances were formed during the initial NAFTA negotiations. Rather, each country championed its own interests. Third, distances between initial country positions did not determine how quickly consensus was reached. Political will to close the deal thus mattered more than initial disagreement. Finally, countries tackled Chapter 11 substance (Section A) first building trust before moving on to the more controversial investor-state arbitration provisions (Section B). Applying these lessons to current renegotiations, parties should stay away from a “winner-takes-it-all” mentality, avoid alliance-building, recognize that political will matters more than poison pills, and start negotiations with low-hanging fruits before tackling controversial issues.

Keywords: NAFTA, investment law, negotiation, negotiation history, renegotiation, text-as-data, computational analysis

JEL Classification: K33, F60

Suggested Citation

Alschner, Wolfgang and Panford-Walsh, Rama and Skougarevskiy, Dmitriy, What Can the Negotiations of NAFTA 1.0 Teach Us About the Fate of NAFTA 2.0? (February 6, 2018). Ottawa Faculty of Law Working Paper No. 2018-05. Available at SSRN: https://ssrn.com/abstract=3123427 or http://dx.doi.org/10.2139/ssrn.3123427

Wolfgang Alschner (Contact Author)

University of Ottawa - Common Law Section ( email )

57 Louis Pasteur Street
Ottawa, K1N 6N5
Canada

Rama Panford-Walsh

University of Ottawa, Common Law Section, Students ( email )

Ottawa, Ontario
Canada

Dmitriy Skougarevskiy

European University at St. Petersburg (EUSP) ( email )

3 Gagarinskaya Street
St. Petersburg, 191187
Russia

HOME PAGE: http://eu.spb.ru

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