PositionProceedings of the 42nd Canada-United States Law Institute Annual Conference: Back to the Future: The Canada-United States Relationship at a Crossroads - Discussion

Moderator: Maureen Irish

Speaker: Scott Miller

Speaker: Selma Lussenburg

PROFESSOR PETRAS: Everybody, please take their seats. Okay. All right, ladies and gentlemen. We are now with the panel that is going to focus on dispute resolution, a contentious point on a story, history on NAFTA, and we have the real experts here to talk about it.

Our moderator today is Professor Maureen Irish. Maureen is a professor emeritus at the University of Windsor Faculty of Law, and she has taught all types of courses on international trade law and international economic law, international business transactions, Canada-United States legal issues, and many more.

Most importantly, she has also served on panels under the Canada-US Free Trade Agreement dispute resolution provision and the NAFTA dispute resolution provision. So she has seen it from the standpoint of deciding disputes.

So, Maureen?

PROFESSOR IRISH: Thank you very much. So this is the panel in which we figure out how to settle disputes. So we've had many comments and views throughout the day, and this is the specific focus of our panel that will resolve all of this.


PROFESSOR IRISH: Or I am not sure. It is a little difficult to figure out how we decide the measure of success of dispute resolution. You know, does the success of dispute resolution mean that things are quiet, that's okay? Sometimes that's all right politically.

Does it mean we have had a lengthy discussion, and we have been through all the issues. We have everything solved, and we now have wonderful systems to go forward? Does it just mean that we get, you know, some kind of final resolution of that particular dispute, or there may be any other measurement of success for dispute resolution.

And, of course, there are lots of different ways in which the methods of dispute resolution can be addressed.

So to get us going on all of this going on, we have two panelists with expertise and experience in the private sector and in government relations. Donald McRae is on the program. Don is, unfortunately, unable to be with us because of illness and sends his regrets.

I am going to introduce the speakers briefly for the record. You will have further details in the conference materials, and then our two speakers will speak in order, and then we will have lots of time for questions and comments and any solutions that we might not have thought of.

So our first speaker will be Scott Miller, who is senior adviser at Abshire-Inamori Leadership Academy at the Center for Strategic and International Studies. He focuses on leadership development programs for public and private sector executives.

Until 2017, he held the William N. Shoal Chair in International Business at CSIS. The chair focuses on critical issues in the global political economy, including international trade, investment, competitiveness, and innovation.

In 2015, he authored "Investor State Dispute Settlement, a Reality Check." Prior to joining CSIS, he was an executive with Proctor & Gamble, a leading consumer products company.

He has also been involved in a range of international trade, investments, and business facilitation issues and campaigned supporting U.S. free trade agreements and has been a contributor to U.S. trade and investment, of policy over many years.

He is a member of the State Department's advisory committee on international economic policy and was the founding chairman of the Department of Commerce's IT AC investment working group.

Selma Lussenburg until just very recently served as vice president, governance, general counsel and corporate secretary of the Greater Toronto Airport's Authority. In this role, she led a team of more than 90 people providing advice and direction to the Airport Authority's board of governors, executive team, and the organization on governance, policy compliance, security, corporate safety matters.

Previously, she served as chair of the Ontario Capital Growth Corporation, the Ontario Government's Venture Capital and Private Equity business. She has also been senior vice president and general counsel and corporate secretary at OMERS, one of Canada's largest public pension plans, and also vice president legal affairs and general counsel at AT&T Enterprises and AT&T Global Services.

She is currently a Canadian private sector representative to the trade ministers NAFTA 2022 advisory committee on the resolution of private international commercial disputes, and the Canadian chair of the NAFTA 2022 transportation sectoral working group.

So two panelists with a great deal of background and expertise, and I will first call on Scott.

MR. MILLER: Thank you. And let me add my thanks to the Canada-US United States Law Institute. It has been a pleasure being here.

I just mentioned to one of the previous panelists that I learned more in the last hour-and-a-half on NAFTA automobiles than I learned in the previous year-and-a-half sitting in Washington. So this was very beneficial from that standpoint, but I am delighted to be here and happy to be a part of this.

There are basically three dimensions of dispute resolution in the NAFTA. We talked before, but let me go through the taxonomy.

Chapter 19, which is somewhat unique, I start with Chapter 19 because it is sort of the one that is really unique to the US-Canada relationship. It comes out of some very specific U.S. Canada politics and continues in that manner, but it doesn't really exist in any other U.S. agreements. And so it is somewhat sui generis.

Chapter 20, which is, I think, more generally state-to-state dispute settlement, which is consistent with U.S. free trade agreements with other economies. Most of them have a chapter that is similar for resolving disputes between the parties.

And then, there is Chapter 11, which is the investor state chapter. Chapter 11 contains obligations for the treatment of investors which features the investor state dispute settlement mechanism.

I want to save that for last because the one that has the most general problems in that, I think there is a broader context of the erosion of legitimacy for investor state dispute settlement in a broad based nature, is Chapter 11. So let me take them in order. I will go from narrow to broad if I could.

We have already had a lot of discussion today on Chapter 19. Chapter 19, of course, is the provision affecting trade remedies, and thanks to Peter Clark for spending time on his panel talking about the--sort of 'from whence it came'.

Let me just make a couple of the additional points about Chapter 19 in the current NAFTA context. First, given our U.S. trade representative's personal characteristics, one, he is a trade lawyer; has for 30 years been practicing trade remedy law, and second, his political mentor was Senator Robert Dole, for whom Ambassador Lighthizer was trade counsel on the Senate Finance Committee when Bob Dole was the chairman of the Senate Finance Committee. He has a very close relationship with Senator Dole.

He was the finance director of the 1996 Dole for president campaign. So the fact that he subscribed to some of the sovereignty concerns of his political mentor and the fact that he is a practitioner of trade remedy law and is suspicious of non-U.S. persons having any role in the U.S. legal proceeding shouldn't be surprising. So that's how Chapter 19 kind of got tabled, at least in my view.

The one thing that I would add that hasn't been said today on Chapter 19 is there was a massive missed opportunity to do something practical on Chapter 19 that I think we have now walked past it. And it is this, and I cite the data from Jeff Schott's colleague at the Peterson Institute, Chad Bown.

Chad looks a lot at sort of what goods are subject to trade remedy laws from which economies and he tracks it over time. So the five years before Donald Trump so-called 2012 through 2016, it was a very quiet period in terms of disputes in the United States that wound up with trade remedy filings and affected Canada.

So here is what Bown reports; that of U.S. antidumping and countervailing duty cases, from that five-year period, only 1.3 percent of NAFTA imports were affected by those dumping orders. Okay. Relatively small.

One of the reasons it was a quiet period is because softwood lumber was quiet then. And you know, this tends when you scrape away enough at trade remedy concerns between the U.S. and Canada, the bedrock is softwood lumber. You always find it.

It is not a surprise, but this was a quiet period, and so only 1.3 percent of NAFTA imports, that includes Mexico, Canada to the United States were subject to any kind of antidumping and countervailing order.

At the same time, Canadian application of trade remedy laws had similar kinds of figures. Only 0.1 percent of NAFTA imports were affected by Canadian dumping orders in that same five-year period. So we had this period of time when trade remedies weren't really causing a lot of political heartburn, and if we wanted to do something about Chapter 19, that was the moment to do it, but it didn't come up.

What happened subsequently, Donald Trump won. He and his team turned our trade remedy actions, as the boys from Spinal Tap would say, up to 11, and all of a sudden it is controversial again, and all of a sudden it is heartburn for Canadians who are swept up in sort of the--caught in the crossfire of U.S. self-initiated antidumping cases.

So we, once again, Americans have snatched defeat from the jaws of victory, but I think we are past that now, and it is going to have its own dynamic in the relationship.

Just as a final point, it is personal for Ambassador Lighthizer. It is something he believes very deeply. So in any case, enough about NAFTA Chapter 19. I hope we will have some questions. If we do, there will probably be some people in the audience with answers.

Chapter 20--and while someone will have the greater expertise and experience on the practical operations--I did want to make one point on the operation of...

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