SECTION 4: OTHER AREAS OF INTEREST

4.1 CORPORATE SERVICES

The Corporate Services contributes to the administration of international trade dispute resolution mechanisms through the provision of sound corporate planning, financial, human resources, information management, information technology, administrative and materiel management services. This program activity also contributes by promoting modern management practices and ensuring that the NAFTA Secretariat, Canadian Section implements new government initiatives and that it complies with all government policies and directives.

The NAFTA Secretariat, Canadian Section must be able to recruit on a timely basis, retain competent and dedicated employees, and provide them with a work environment conducive to their learning and development. Therefore, a continued focus must be placed on the strategic management of human resources. This year, we are committed to achieving a sustainable workforce by implementing the various human resources components of the Public Service Modernization Act (PSMA). The successful implementation of PSMA is extremely important for sustainable and productive workforce in the NAFTA Secretariat, Canadian Section.

The two boxes below show information on planned spending on financial and human resources over the coming three-year period with respect to the corporate services.

All priorities identified below are aimed at supporting and enhancing the NAFTA Secretariat, Canadian Section's ability to fulfil its mandated responsibilities.

4.1.1 Operational Efficiency and Effectiveness

The NAFTA Secretariat, Canadian Section is committed to employing new information technologies to further develop and enhance systems and processes that improve the overall effectiveness and efficiency of the dispute settlement processes. To this end, we will continue our collaborative endeavor with the Mexican and the Unites States national sections in utilizing information technology infrastructure that promotes information sharing and improved productivity.

4.1.2 Highest Quality of Service

The NAFTA Secretariat, Canadian Section is committed to maintaining the highest quality of service in the administration of dispute settlement mechanisms. To this end, will continue to promote employee professional development in order to maintain high level of expertise. Additionally, we will continue to provide and further improve professional services and corporate management frameworks, policies and processes.

ANNEX A
Guiding Principles

ANNEX B

1. Overview of the NAFTA Dispute Settlement Provisions

The principal dispute settlement mechanisms of the North American Free Trade Agreement (NAFTA) are found in Chapters 11, 19 and 20 of the Agreement. As well, disputes relating to agriculture and sanitary and phytosanitary measures of Chapter 7, government procurement provisions of Chapter 10 and financial services provisions of Chapter 14 may be referred to dispute settlement procedures under Chapter 20. Disputes relating to the non-compliance of a Party with a final award under the investment provisions of Chapter 11 may also be referred to dispute settlement under Chapter 20.

Chapter 19 establishes a mechanism to review final determinations in antidumping and countervailing duty cases, with review by independent binational panels. A Panel is established when a Request for Panel Review is filed with the Secretariat by an industry asking for a review of a decision respecting imports from a NAFTA country. In Canada, it is the Canada Border Services Agency (formerly, Canada Customs and Revenue Agency), which makes dumping and subsidy determinations, while the Canadian International Trade Tribunal (CITT) conducts inquiries as to whether or not the dumping or subsidy has caused injury to the domestic industry. The dumping, subsidy and injury determinations of these two agencies or those of their equivalents in the U.S. and Mexico, can also be appealed, in Canada to the Federal Court of Appeal, in the U.S. to the Court of International Trade and in Mexico to the Tribunal Fiscal de la Federación. Therefore, the dispute settlement mechanisms agreed upon by the three NAFTA countries in this Chapter, provide for an alternative to judicial review by these domestic courts.

The dispute settlement provisions of Chapter 20 are applicable to disputes regarding the interpretation or application of the NAFTA. The steps set out in Chapter 20 are intended to resolve disputes through consultations, if at all possible. The process begins with government-to-government ("Parties") consultations. If the dispute is not resolved, a Party may request a meeting of the NAFTA Free-Trade Commission (comprised of the Parties' Ministers responsible for International Trade). If the Commission is unable to resolve the dispute, a consulting Party may call for the establishment of a five-member panel.

2. Roster Members

The Parties have established Rosters of individuals from which panelists are appointed to adjudicate disputes. Members of these Rosters are of good character, high standing and repute and are chosen strictly on the basis of objectivity, reliability and sound judgement. There are NAFTA Rosters (one per country) for Chapter 14 (Financial Services), Chapter 19 (Antidumping and Countervailing Duty Matters and Extraordinary Challenge Procedure) and Chapter 20 (Institutional Arrangements and Dispute Settlement Procedures). In Canada, the Governor-in-Council appoints roster members, on the recommendation of the Minister of International Trade.

3. Panel Selection

When a Request for Panel Review is filed under Chapter 19, a panel is selected from the national Roster of each country involved. The members are chosen by the Minister of International Trade for Canada and by his counterpart in the United States or Mexico (Chapter 19 panels are always binational in composition). Each involved government in the dispute appoints two panelists, in consultation with the other involved government. The fifth panelist is from one of the two countries and generally its nationality alternates with each dispute.

Under Chapter 20, an arbitral panel is established using a reverse selection process. Under this process, each disputing Party selects two panelists who are citizens of the other disputing Party. The chair of the panel is selected by the disputing Parties and may be a citizen of a NAFTA Party or any other country.

To be selected to serve on a specific panel, roster candidates must complete Initial Disclosure Statements pursuant to the NAFTA Code of Conduct. The Code is fundamental to the process. The governing principle is that roster members and panelists must disclose any interest, relationship or matter that is likely to affect their independence or impartiality or that might create an appearance of impropriety or bias. The obligation to disclose is a continuing duty, which requires a panel member to disclose any such interests, relationships and matters that may arise during any stage of the proceeding.

4. Rules of Procedure

The Chapter 19 panel review is a quasi-judicial process. It is guided by detailed rules of procedure. The rules include time limits for each step in the process. 315 days is the prescribed time it takes from the date a Request for a Panel Review is filed to the issuance of a panel decision.

Chapter 20 is also guided by model rules of procedure and the process is scheduled to take approximately five months. Under this process, the involved Parties may submit written submissions to the panel and at least one hearing will take place in the capital of the country complained against.

5. Panel Decisions and Reports

Under Chapter 19, a panel may do one of two things in its decision. It may uphold the final determination, or it may remand it - e.g. send it back - to the investigating authority (NAFTA Article 1904 [8]). In the later case, the panel may issue another decision on the agency's determination on remand, as it may affirm or remand it again to the investigating authority.

Panel decisions under Chapter 20 are called "reports", as they contain findings of fact and any recommendation(s) the panel may have to resolve the dispute.

Panels decisions and reports are available on-line and in the official languages of the NAFTA participative countries by accessing the NAFTA Secretariat trilateral Web site (http://www.nafta-sec-alena.org/DefaultSite/index-eng.aspx).

6. Extraordinary Challenge Procedure

Chapter 19 panel decisions are binding on the involved NAFTA Parties and appeal of panel decisions to domestic courts is prohibited. NAFTA 1904(13), however, allows an Extraordinary Challenge Committee (ECC) procedure, which may be invoked only by a NAFTA Party and not by other interested persons (e.g. private parties). The challenge is not an appeal of right but a safeguard to preserve the integrity of the panel process.

A request for an ECC may be filed if an involved Party alleges that:

1.  
   1. a member of the panel was guilty of gross misconduct, bias, or a serious conflict of interest, or otherwise materially violated the rules of conduct,
   2. the panel seriously departed from a fundamental rule of procedure, or
   3. the panel manifestly exceeded its powers, authority or jurisdiction set out in this Article, for example by failing to apply the appropriate standard of review.
2. any of the actions set out in subparagraph (a) has materially affected the panel's decision and threatens the integrity of the binational panel review process, …

Annex 1904.13.3 makes it explicit that ECCs, if convened, must examine "… the legal and factual analysis underlying the findings and conclusions of the panel's decision in order to determine whether one of the grounds set out in Article 1904(13) [for resorting to the extraordinary challenge procedure] has been established, …".

Extraordinary Challenge Committees are composed of three members selected from a Roster of judges or former judges of a federal judicial court of the United States or a judicial court of superior jurisdiction in Canada, or a federal judicial court of Mexico.

Under the Canada-U.S. Free Trade Agreement (FTA) there were three ECC proceedings. All three have been dismissed for failure to meet the required standards of an extraordinary challenge. There were three other cases filed under the NAFTA. The first case involved Mexico and the United States and the ECC affirmed the decision of the binational panel. The second and third cases involved Canada and the United States and were concluded in similar manner.

ANNEX C
HOW TO CONTACT US

Contacts and other relevant information:

The NAFTA Secretariat, Canadian Section: