State-to-State Dispute Settlement in Megaregionals

Abstract

Abstract State-to-state dispute settlement (SSDS) in trade matters was transformed from the traditional model through the compulsory two-tier mechanism of the World Trade Organization (WTO). It now functions to contain unilateralism in trade adjudication and remedies, supplies workable interpretations and new jurisprudence on contested and evolving issues in a unified way for all states, and helps overcome impasses in WTO political bodies. The megaregional agreements, the Comprehensive Economic and Trade Agreement (CETA) and the Trans-Pacific Partnership (TPP), did not spur much further innovation over the WTO’s baseline and in fact stay closer to the weaker SSDS model of the North America Free Trade Agreement (NAFTA). The megaregionals continue the trend of bilateral and regional free trade agreements to include both SSDS and investor–state dispute settlement (ISDS), but do little to recalibrate the relationship and interactions between the two. It is therefore likely that ISDS cases arising under these agreements will largely resemble the dynamics of existing bilateral investment treaty (BIT)-based and United Nations Commission on International Trade Law (UNCITRAL) or International Centre for Settlement of Investment Disputes (ICSID)-ruled disputes, and that WTO dispute settlement will continue to hold sway in the field of trade for the vast number of obligations that are common to the WTO and the megaregionals.