US seeks to gut NAFTA dispute tribunals

OTTAWA, Ontario — U.S. NAFTA negotiators are proposing to essentially do away with the independent tribunals that oversee the trading and investment relationship, either by eliminating them or substantially scaling back their roles, people familiar with negotiations said.

The U.S. has proposed changes for two types of independent dispute settlement rules under the North American Free Trade Agreement _ so-called investor-state rules and provisions to settle state-to-state disputes at an independent panel.

For investor-state dispute settlement, presently laid out in NAFTA’s Chapter 11, the U.S. wants a system in which nations opt in, effectively allowing each country to decide if it will take part, the people said, speaking on the condition of anonymity. For the state-to-state disputes, contained in Chapter 20, the U.S. wants to replace them with nonbinding advisory panels, the people said.

A spokeswoman for U.S. Trade Representative Robert Lighthizer declined to comment.

The U.S. has publicly said it wants to abolish Chapter 19 panels, which examine anti-dumping and countervailing duty cases, and made a proposal to that effect in previous sessions before delivering the proposals on Chapters 11 and 20 in this round of talks. The three chapters together make up NAFTA’s existing dispute-settlement mechanisms.

The dispute protections are among the most critical issues for Canada and Mexico, who see them as essential independent protection from having disputes get mired in U.S. courts.

The proposals are among the last of the major U.S. demands as NAFTA’s fourth round of talks continues in Washington through Tuesday.

The others include a reduction of Canadian and Mexican access to U.S. procurement deals; a proposal to require more auto manufacturing in the U.S.; and a recurring five-year sunset clause that some observers say will be opposed by Congress and unlikely to be agreed to.

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