“The binational panel dispute settlement system set up by Chapter 19 of NAFTA is deeply flawed and contrary to the US Constitution," said Joe Dorn, a Washington-based attorney representing the Southern Tier Cement Committee (“STCC”). “It was intended to provide a process for timely appeals of agency decisions in antidumping and countervailing duty cases based on fairly applying the same law and standard of review as a national court. Instead, Chapter 19 is being manipulated in a biased manner, and US producers have no real recourse. Thus, we support the legal action filed today by the Coalition for Fair Lumber Imports, which seeks to strike down Chapter 19 as unconstitutional.”
Chapter 19 allows appeals of agency determinations involving imports from Mexico and Canada to be heard by ad hoc, five-member panels of private individuals from the two countries involved in the case, rather than national courts. The STCC, which consists of 23 US cement producers that support the U.S. antidumping duty order on Mexican cement, is among the most experienced parties in NAFTA cases, because its Mexican opponents have consistently chosen to appeal to NAFTA panels, rather than the US Court of International Trade, a Federal court with impartial judges established under Article III of the U.S. Constitution.
“Our experience in Chapter 19 cases has demonstrated that the system is not working and that domestic producers are at a distinct disadvantage,” said Dorn. “One problem is that Mexico has abused the process for selecting panelists. It has refused to select panelists when delay is beneficial to Mexican exporters, but has pushed the U.S. Government to establish panels when our Mexican opponents want a case to be heard, even if it is out of sequence of when the cases were filed. Chapter 19 was intended to require cases to be concluded in less than a year, but we have a backlog of eight cases dating back to 2000 that cannot be heard because Mexico will not allow panels to be named.”
In addition, there is no adequate system of review when NAFTA panels fail to comply with their obligation to apply US law.
“The NAFTA Chapter 19 process of having private parties, including foreign nationals, review US agency determinations in the place of independent and objective US judges,” Dorn concluded, “has proven itself to be both flawed and unfair. It’s time for these cases to be returned to the US court system, where all other cases except those involving imports from Mexico and Canada are heard, and where adherence to law and the standard of review is assured.”