When dispute settlement falters: Restoring legal certainty in USMCA | Brookings

The article by Barry Appleton analyzes the challenges facing the United States-Mexico-Canada Agreement (USMCA), particularly concerning its dispute settlement mechanisms. It argues that the agreement’s design, prioritizing short-term leverage over durability, has created recurring uncertainty and threatens North American integration. Unlike NAFTA, which provided long-term stability through its indefinite duration, USMCA includes provisions for periodic review and potential withdrawal, effectively allowing the stronger party to exert influence.

The author highlights a concerning pattern: while dispute settlement panels can issue rulings, compliance remains discretionary and contingent on political considerations. The Rapid Response Labor Mechanism is a notable exception, demonstrating effective enforcement when incentives are aligned. However, the broader trend suggests that adjudication functions while enforcement is weak. The article points to the US Trade Representative’s statements indicating a willingness to renegotiate or even exit the agreement, signaling a shift towards treating the review process as an opportunity for leverage rather than a routine update.

To restore legal certainty, Appleton proposes several measures, including automatic compliance with panel reports, procedural insulation of disputes from broader negotiations, symmetrical enforcement mechanisms, disciplined use of emergency measures, and a shift in the review process to prioritize maintenance and updates rather than wholesale renegotiation. Ultimately, the article contends that the future of USMCA hinges on whether North America recommits to a rules-based system or accepts a future of perpetual recalibration, where legal commitments are constantly discounted by the threat of their withdrawal.

(Source：Brookings)