Settlement of Disputes Under the Central America-United States-Dominican Republic Free Trade Agreement

Abstract

The U.S. - Central America - Dominican Republic Free Trade Agreement is one of nearly a dozen post-NAFTA FTAs that have been concluded by the United States since 2000 with nations in Latin America, the Middle East and Asia. All of these newer agreements are based on NAFTA, but they differ in significant respects, particularly in the chapters relating to dispute settlement. The changes reflect, most significantly, U.S. government experience with NAFTA dispute settlement, particularly with regard to actions brought by private investors against the United States and other NAFTA governments under NAFTA's investment protection provisions (Chapter 11). However, they also result from perceived (as well as actual) threats to U.S. sovereignty, as reflected in the President's "Trade Promotion Authority" of 2002. It is too soon, of course, to determine whether these changes will have a significant impact on dispute settlement under CAFTA-DR; in the author's view, they will.

Keywords: free trade agrements, investor-state dispute settlement, alternative dispute resolution, Central America

JEL Classification: K33