Privatizing Dispute Resolution Under the Free Trade Agreement: Truth or Fancy?

Replete with evidence of extensive forum shopping, unending discovery procedures, and countless delays in the formal adjudicatory process, the case for an alternative, more specialized medium for the resolution of trade disputes between the United States and Canada has grown more pressing. The problem, however, is in being convinced that the alternative, embodied in the proposed Canada-United States Free Trade Agreement, addresses the deficiencies in the existing medium for dispute resolution without introducing greater social and personal costs of its own. A government, in distancing itself from dispute resolution, also separates itself from the process through which social problems are resolved. Either it accepts that exclusion as impotence or it seeks to control the decisional process itself. The risk in both cases is to raise rather than reduce the cost of disagreement. The harm is that the inter-governmental agreement, formulated for resolving disputes, will actually encourage disputes. This problem is accentuated when the process of disagreement shifts from the differences between governments to differences between their "private" surrogates, i.e., between arbitrators who decide disputes in place of governments. The conflict is also extended when panels of experts from whom arbitrators are chosen to represent their nation state rather than the "rightful" claims of each disputing party. Whether or not this perception is wholly justified in fact, reality lies in the eyes of the beholder. The effect, in each case, is to add mistrust to the process of dispute settlement itself. This occurs when decisionmakers threaten the supposed objectivity of the settlement process; or when they decide on the basis of politics masquerading as conflict avoidance. Their neutrality grows increasingly suspect when they are expected to understand the particular political and economic interests of each party and yet never be biased by that understanding to the detriment of either. Knowledge of each party's interests or aspirations is to serve only as a means towards an objective choice, not a way of displacing that choice for more partial ends. This paper has two essential objects: first, to address the divide between political and strictly legal resolutions of inter-governmental disputes and, second, to consider the benefit of the private commercial mechanism of arbitration in relation to a seemingly "public" dispute. The goal is to assess the extent to which "private" arbitral remedies can effect solutions between nations that previously employed diplomatic channels or protracted litigation.