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

Abstract

The Central America–Dominican Republic–United States Free Trade Agreement (CAFTA-DR) is one of nearly a dozen post-North American Free Trade Agreements (NAFTA) free trade agreements (FTAs) that the United States has concluded with nations in Latin America, the Middle East, and Asia since 2000. All of these newer agreements are based on NAFTA, but they differ in significant respects, particularly in the chapters relating to dispute settlement. Most significantly, the changes reflect 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, the changes 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 to determine whether these changes will have a significant impact on dispute settlement under CAFTA-DR; some may well lead tribunals to conclusions different from those that would be rendered under NAFTA. Government-to-government dispute settlement proceedings under CAFTA-DR, as under NAFTA, are likely to be infrequent unless the roster is promptly appointed.