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NAFTA Dispute Settlement and Mexico: Interpreting Treaties and Reconciling Common and Civil Law Systems in a Free Trade Area

  • J.C. Thomas and Sergio López Ayllón

Summary

The first NAFTA Chapter 19 binational panel review of a Mexican antidumping determination raises important questions about the interpretation of treaties. In confronting the different way in which Mexico, a civil law country, had implemented NAFTA, the panel had to deal with a process of implementation different from that in the common law jurisdictions of Canada and the United States. The authors argue that in interpreting NAFTA, the panel relied on the negotiating history of one party, the United States, to reach a conclusion that did not represent the intentions of the three parties, and led to the exercise of a jurisdiction by a Chapter 19 panel in respect of Mexico that ü different from that exercised by Chapter 19 panels reviewing determinations from the other two NAFTA parties.

Sommaire

Le premier groupe spécial binational qui a été formé en vertu du chapitre 19 de l’ALÉNA pour examiner une décision mexicaine concernant une affaire d’antidumping a soulevé des questions importantes à propos de l’interprétation des traités. Comme le Mexique, qui est un pays de droit civil, avait appliqué l’ALÉNA d’une manière différente, k groupe spécial devait donc examiner un processus de mise en application qui différait de celui des juridictions de common law du Canada et des États-Unù. Les auteurs soutiennent qu’en interprétant l’ALÉNA, le groupe spécial s’est fondé sur l’historique des négocations d’une seule partie, soit les États-Unis, pour en arriver à une décision qui ne représentait pas l’intention des trois parties. Par conséquent, le groupe spécial formé en vertu du chapitre 19 a exercé, dans cette affaire concernant le Mexique, une compétence différente de celle qui est normalement exercée par les groupes spéciaux à l’égard des décisions des deux autres parties à l’ALÉNA.

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1 Cut-to-Length Steel, Originating In or Exported From the United States of America, MEX-0,4-1904-02.

2 Although NAFTA is a trilateral agreement, the composition of Chapter 19 panels reflects the bilateral nature of that dispute settlement process. The third party does not participate in a review, nor are panelists selected from its roster. Thus, if for example a NAFTA party imposes anti-dumping duties on subject goods exported from both of the other parties, two binational panels are created rather than a single trinational panel in order to review the determination.

3 Art. 1904.8 provides:

The panel may uphold a final determination, or remand it for action not inconsistent with the panel's decision. Where the panel remands a final determination, the panel shall establish as brief a time as is reasonable for compliance with the remand, taking to account the complexity of the factual and legal issues involved and the nature of the panel's decision. In no event shall the time permitted for compliance with a remand exceed an amount of time equal to the maximum amount of time (counted from the date of the filing of a petition, complaint or application) permitted by statute for the competent investigating authority in question to make a final determination in an investigation. If review of the action taken by the competent investigating authority on remand is needed, such review shall be before the same panel, which shall normally issue a final decision within 90 days of the date on which such remand action is submitted to it.

4 The minority stated in this regard:

Thus, we are not deciding here whether or not the Panel has authority pursuant to Article 338 of the Federal Fiscal Code to declare the determination by SECOFI to be a nullity. Neither are we deciding on any related issues, such as the assumption of the majority that Article 238 of the Fiscal Code can only be uniformly applied along with Article 239 of the Fiscal Code, or to the existence of a rule of logical sequence in the application of Article 238, much less the correct interpretation of Paragraph 1 of Article 238. Thus any assertion of the Panel regarding those issues should not be considered corroborated by us.

See the dissenting opinion of panelists John Barton and Gustavo Vega-Cánovas, MEX-94–1904–02 (North American Free Trade Agreement Binational Panel Review Minority Opinion, August 30, 1995).

5 See Sinclair, Ian, The Vienna Convention on the Law of Treaties, 2nd ed. 11947 (1984).

6 A 1995 Report by the United States General Accounting Office entitled “U.S.-Canada Free Trade Agreement: Factors Contributing to Controversy in Appeals of Trade Remedy Cases to Binational Panels” summarized the difference in views about the operation of Extraordinary Challenge Committees in NAFTA as follows:

According to U.S. and Canadian officials, ECC review of a panel’s decision was meant to have a higher threshold than appellate review of a CIT decision by CAFC. Nevertheless, participants, including the two governments, disagreed over the interpretation of the ECC standard and where that threshold should be. As a result, the United States and Canada later took the opportunity to “clarify” the ECC role as part of their subsequent NAFTA negotiations. The final NAFTA text incorporated all the U.S. and Canadian FTA Chapter 19 provisions and extended them to Mexico, but added some clarifying language.

However, based on our review of U.S. and Canadian government documents, we believe that the new language in NAFTA regarding ECC did not resolve the fundamental difference between the parties on this issue. While U.S. and Canadian officials agreed that the new NAFTA language “made explicit what was implicit in the FTA,” they unfortunately did not agree on what was implicit in the agreement. The U.S. officials characterized this as a significant change, while Canadian officials characterized it as a non-substantive change. Thus, it seems that U.S. officials expected future ECCs to be less narrow in reviewing panel decisions, and Canadian officials expected future ECCs to continue to interpret their role narrowly.

See GAO/GGD-95–175 BR at 97.

7 The former was published in the Canada Gazette (1994). I. 68. The latter was published in the Canada Gazette (1994). I. 4847.

8 In Canada, of course, Quebec adheres to the civil law, and in the United States, Louisiana continues to maintain some elements of civil law.

9 Mexico has had a trade remedy law only since 1986, after it acceded to the General Agreement on Tariffs and Trade in 1985. Thus, there has been only a decade of trade remedy actions and little judicial review thereof.

10 Steger, Debra P.The Dispute Settlement Mechanism of the Canada-U.S. Free Trade Agreement: Comparison with the Existing System” in McRae and Steger (eds), Understanding the Free Trade Agreement 49 at 56 (Ottawa: Institute for Research on Public Policy, 1988).

11 Shirley A. Coffield, “Dispute Settlement Provisions on Anti-dumping and Countervailing Duty Cases in the Canada-U,S. Free Trade Agreement” in McRae and Steger, supra note 10 at 73.

12 Lowenfeld, , “Binational Dispute Settlement Under Chapter 19 of the Canada-United States Free Trade Agreement: An Interim Appraisal” (1991) 24 N.YU. J. Int’l L. & P. 269 at 270.

13 Greenberg, , “Chapter 19 of the U.S.-Canada Free Trade Agreement and the North American Free Trade Agreement: Implications for the Court of International Trade” (1993) 25 L. … Pol’y Int’l Bus. 37 at 38.

14 Steger, supra note 10, notes that the idea of settling trade disputes by way of a binational panel was not novel to Canada. In 1985, the Macdonald Commission, inter alia, recommended the establishment of a committee of ministers to adjudicate disputes over anti-dumping and countervailing duties and safeguard matters. See Report of the Royal Commission on the Economic Union and Development Prospects for Canada (1985).

15 Art. 1901.2.

16 Annex 1901.2(10).

17 Annex 1901.2(8).

18 Art. 1904.3.

19 The United States House of Representatives’ Committee on the Judiciary subsequently noted in this regard (at 16): “The binational panels are established to implement the FTA, an international law agreement, and the panelists will apply international law under the FTA. Panelists will be exercising authority pursuant to international law, therefore not enforcing the laws of the United States.” It stated further (at 26):

Section 401 (d) of the bill makes clear that a court of the United States is not bound by a final decision of a binational panel or extraordinary challenge committee. The binational panels and extraordinary challenge committees are tribunals created by international law that will be applying international law. They are not Article III courts. Panel and committee decisions cannot be binding on U.S. courts. A court of the United States, however, may take a panel or committee decision into consideration, as it would a considered view of United States law.

Report of the Committee on the Judiciary on the United States-Canada Free-Trade Agreement Implementation Act of 1988, 100th Cong., 2d Sess. Rep’t 100-816 Part 4.

20 See Art. 1904.14.

21 See Rule 3 of the original version of the rules of procedure for Art. 1904 binational panel reviews.

22 This was made clear in Art. 1904.2, which permitted the panel to review, “based upon the administrative record, a final anti-dumping or countervailing duty determination of a competent investigation authority.”

23 Section 3 of the Federal Court Act refers to it as a “court of law, equity and admiralty.”

24 Section 2 of the act defines “relief to mean “every species of relief, whether by way of damages, payment of money, injunction, declaration, restitution of an incorporeal right, return of land or chattels or otherwise.”

25 The point is illustrated by examining the way in which Canada and the United States have implemented the NAFTA panel system in their domestic law. In Canada, an application for judicial review would be made to the Federal Court Trial Division or to the Federal Court of Appeal depending on the investigating authority being reviewed. The Trial Division has jurisdiction to hear and determine applications for judicial review made in respect of Revenue Canada determinations. Subsection 18.1 of the Federal Court Act states that, on an application for judicial review, the Trial Division may:

  • (a)

    (a) order a federal board, commission or other tribunal to do any act or thing it has unlawfully failed or refused to do or has unreasonably delayed in doing; or

  • (b)

    (b) declare invalid or unlawful or quash, or set aside and refer back for redetermination in accordance with such directions as it considers to be appropriate, prohibit or restrain, a decision, order, act or proceeding of a federal board, commission or other tribunal.

The Federal Court of Appeal has jurisdiction to hear and determine applications for judicial review made in respect of the Canadian International Trade Tribunal. By virtue of Section 28(2) of the Federal Court Act, it has the same powers as the Trial Division.

In contrast to the wide-ranging powers held by the Canadian courts, the Canadian legislation implementing NAFTA (the North American Free Trade Agreement Implementation Act) limits the powers of a binational panel. Section 77.015(1) states:

  • (1)

    (1) A panel shall conduct a review of a definitive decision in accordance with Chapter Nineteen of the North American Free Trade Agreement and the Rules.

  • (2)

    (2) A panel has such powers, rights and privileges as are conferred on it by the regulations.

  • (3)

    (3) On completion of the review of a definitive decision, a panel shall determine whether the grounds on which the review was requested have been established and shall make an order confirming the decision or referring the matter back to the appropriate authority for reconsideration within the period specified by the panel [emphasis added].

United States law similarly confers wide powers in respect of judicial review on the Court of International Trade. E.g., under 28 U.S.C. § 1585 “ [t]he Court of International Trade shall possess all the powers in law and equity or, as con-ferred by statute upon, a district court of the United States,” and 28 U.S.C. § 2643 gives the Court the power to enter a money judgment, order any other form of relief that is appropriate in a civil action including, but not limited to, declaratory judgments, orders of remand, injunctions and writs of mandamus and prohibition.

In contrast to these considerable powers vested in the Court of International Trade, the applicable United States statute implementing Art. 1904 of the NAFTA (19 U.S.C. § 1516a), consistent with NAFTA Art. 1904.8, refers only to a remand from a binational panel.

26 Emphasis added. See supra note 19 at 27.

27 ICSID stands for the International Centre for the Settlement of Investment Disputes. It is a body established by the World Bank to arbitrate disputes between investors and host states. Art. 50 of the ICSID Rules of Procedure for Arbitration Proceedings, which deals with “Interpretation, Revision and Annulment of the Award,” sets out the grounds for seeking an ad hoc review committee. The grounds are very similar to those ultimately included in Article 1904.13.

28 Art. 1904.13 requires a party to “allege” rather than establish these three prongs.

29 Art. 1904.13(a). The language in NAFTA Art. 1904.13(a) (iii): “for example, by failing to apply the appropriate standard of review” was not included in the FTA. Canada, in its Statement on Implementation for NAFTA (at 204), stated that the inclusion of this clause “does not expand the scope of an extraordinary challenge proceeding from what had been negotiated under the FTA.” Instead, Canada asserted that it merely made explicit what was implicit in the FTA. The United States, in its Statement of Administrative Action, H. Doc. 103-59, Vol. 1, 103d Cong., 1” Sess. at 644, saw the change as more significant.

30 Art. 1904.13(b).

31 Unlike a panel established pursuant to Annex 1901.2, no peremptory challenges are available.

32 Annex 1904.12(2).

33 Annex 1904.13(3).

34 The GAO Report, supra note 6 adverted to this fact when it discussed United States concerns that binational panels were creating a separate jurisprudence. It commented:

Determining what constitutes substantial evidence involves subjective judgment and is the subject of ongoing debate in U.S. administrative law. Questions regarding the application of the standard, such as how much evidence is required to support an agency decision, involve the discretion of the reviewing court or panel. The criteria that have been articulated by appellate courts for the application of the standard have not necessarily provided clear guidance for individual cases.

Consequendy, comparing the panels’ treatment of the substantial evidence standard with that of CIT is difficult because different judges themselves have applied the standard differendy. Some participants told us that they see CIT judges apply the standard of review in a range of ways — that is, not uniformly. In the judicial process, the boundaries for CIT judges applying the standard of review are established through review of these decisions by higher courts, namely CAFC. However, under FTA, while an ECC can review a panel decision, the standard for this subsequent review is different (GAO Report at 35).

35 The GAO Report, ibid., commented in this regard:

While panels perform the same function and are charged with applying the same legal standard of review as CIT, they are different in their composition and in their practices. Participants in the panel process had opposite views about whether some panel decisions were in keeping with or contrary to what CIT would have decided. Furthermore, participants noted procedural differences between the panel process and the judicial process. (See App. III.)

These differences could add to the controversy over the process because they are not what some U.S. participants are used to encountering in the U.S. system. For example, several participants noted that panels and panelists were easier targets for criticism than courts and judges were. This is because panelists served ad hoc, were otherwise colleagues of the other participants, may have represented clients on similar issues before the administering agencies, and did not have the same stature as judges. Some suggested that permanent panelists may be needed in the future, while others thought that the private parties should have a role in selecting panelists. In updating FTA binational panel provisions during NAFTA negotiations, U.S. officials sought to encourage a more judicial character in panels by adding a “requirement that the United States include judges and former judges on the panelist rosters to the fullest extent practicable (ibid., 99).

36 This is addressed in a forthcoming paper co-authored by J. C. Thomas and T. M. Apsey, entitled, “Lessons of the Softwood Lumber Dispute: Politics, Protectionism, and the Panel Process.”

37 The House Committee on the Judiciary noted in this regard:

The creation of binational panel, in combination with other features of the FTA, offer concrete benefits for United States persons and businesses. First, the panels will apply the same standard of review as a court but it must make its decisions in a much shorter time period, and, thereby enhance the “ability to calculate the economic costs and benefits . . . [involved in appealing a case].” Second, the use of dispute resolution panels over the next five to seven years is designed as a prelude to the development of permanent substantive changes in the trade laws of the two countries. It has been argued that familiarity with the laws of the other nation will facilitate this development Third, to American exporters the FTA presents a specific improvement by authorizing review of certain decisions concerning anti-dumping and countervailing duty cases in Canada that are not currendy subject to judicial review in Canadian courts. Finally, the use of binational panels permits the interested private parties to utilize, in appropriate cases, the legal assistance of government attorneys in the panel process. This indirect type of assistance to United States exporters could help reduce the legal costs to the parties, especially to small businesses (supra note 19 at 3).

38 Senator Packwood was a leading ally of the “Coalition for Fair Lumber Imports,” a trade group that had successfully petitioned for a countervailing duty against imported Canadian lumber only to see the duty eliminated after a series of sometimes rancorous binational panel decisions and an Extraordinary Challenge Committee proceeding.

39 Supra note 8 at 3.

40 Ibid., 38–39.

41 This difference of view manifested itself in the NAFTA negotiations when Chapter 19 arose as an issue. The United States was disinclined to continue Chapter 19. To Canada, this was unacceptable; Chapter 19 was a sine qua non of a successful outcome to the negotiations. Ultimately, Chapter 19 was included, but not without important modifications.

42 The annotation stated:

Article 1907 provides that the two governments will work towards establishing a new regime to address problems of dumping and subsidization to come into effect no later than at the end of the seventh year. During the course of the current negotiations, the two sides recognized that develop ing a new regime was a complex task and would require more time. The goal of any new regime, however, will be to obviate the need for border remedies, as are now sanctioned by the GATT Anti-dumping and Subsidies Codes, for example, by developing new rules on subsidy practices and relying on domestic competition law. Thus the goal of the two governments remains the establishment of a new regime to replace current trade remedy law well before the end of the transition period.

In the meantime, Chapter 19 includes provisions to prevent abuse of the current system, thus allowing Canadian exporters to compete in the U.S. market on a more secure, predictable, and equitable footing.

43 The first ECC resulted from a panel review of the International Trade Commission’s injury determination in Fresh, Chilled, and Frozen Pork from Canada. In the first review, the panel found that the injury determination was not supportable and remanded it to the ITC. The ITC’s determination on remand was then reviewed and the panel again sent it back, this time with instructions to find no injury. The ITC protested the panel’s decision as “counterintuitive, counterfac-tual, and illogical, but legally binding.” The United States then commenced an ECC proceeding alleging that the panel had manifestíy exceeded its powers, authority, or jurisdiction. The ECC rejected all of the United States arguments and dismissed the complaint ((1991) 4 T.C.T. 7037). The second ECC adopted the same approach in Live Swine from Canada ([1993] ET.A.D. No. 4).

44 Art. 1907.2.

45 Annex 1901.2, para. 1.

48 Statement of Administrative Action at 644.

47 Emphasis added. Ibid., 195–96.

48 The FTA’s equivalent language had been less explicit, simply referring to the possibility that there would be a “finding that one of the grounds set out in paragraph 13 … has been established.”

49 Statement of Administrative Action at 196.

50 This is discussed further below.

51 Art. 1907.3.

52 Ibid.

53 Héctor Fix Fierro and Sergio López-Ayllón, “E’l Tratado de Libre Comercio de América del Norte y la globalización del derecho. Una visión desde la sociología y la política del derecho” in Witker, Jorge (ed.), El Tratado de Libre Comercio de América del Norte. Análisis, diagnóstico y propuestas jurídicas, vol. 1, 19 at 54 (Mexico: UNAM, 1993).

54 The bibliography on these issues is extensive. E.g., note Jorge Witker, ibid., vol. 1 at 79–108; Alvarez, Guillermo Aguilar, “Marco jurídico del Tratado de Libre Comercio de America del Norte” in Abascal, Rubén Valdez and Romero, J.E. (eds), La modernización del derecho mexicano 60134 (Mexico: Porrúa, 1994); Carpizo, , Jorge, , “La interpretación del artículo 133 constitucional” in Boletín Mexicano de Derecho Comparado, año II, no. 4, Jan.-Apr. 1969 at 333 ; Báez, Antonio Martínez, “La Constitución y los tratados internacionales” in Revista de la Escitela Nacional de Jurisprudencia, t. VIII, no. 30, Apr.-June 1946 at 16781 ; Treviño, Jorge Palacios, Tratados: legislation y práctica en México (Mexico: Secretaría de Relaciones Exteriores, 1986); Vázquez, M. Seara, Derecho internacional público (Mexico: Porrúa, 1976); Pando, F. Vázquez, “Jerarquía del Tratado de Libre Comercio en el sistema constitucional mexicano” in Panorama jurídico del Tratado de Libre Comercio 35 ff. (Mexico: Universidad Iberoamericana, 1992).

55 Art. 133 reads: “This Constitution, the laws of the Congress of the Union that emanate from it and all the treaties that conform to it, concluded or to be concluded by the President of the Republic, with the approval of the Senate, will be the Supreme Law of the Union. The State judges will conduct themselves under such Constitution, laws, and treaties, notwithstanding the provisions to the contrary, that may be found in the States’ Constitutions or laws.” Other constitutional articles that apply to the international sphere are Art. 15; Art. 76, para. 1; Art. 89, para. 10; Art. 104; Art. 107; and Art. 117, para. 1.

56 This article, introduced for the first time in the Mexican Constitution of 1857, is inspired by the second paragraph of Art. 6 of the constitution of the United States of America. See Ramírez, F. Tena, Derecho constitucional mexicano, 18th ed., 413 ff. (Mexico: Porrúa, 1981).

57 The Law on Foreign Trade was published in the Official Gazette of the Federation (Diario Oficial de la Federación) on July 27, 1993, and its regulations on December 30, 1993. Some scholars in Mexico have pointed out that these amendments were “a hasty and naive homologation on the field” that left the national productive sectors in a state of “legal impairment provoked by the mechanical homologation to anglo-saxon laws”: see Witker, Jorge and Susana, Hernández, “Resolución de controversias en materia de antidumping y cuotas compensatorias en el TLCAN” in El Tratado de Libre Comercio de America del Norte, supra note 53, vol. 1 at 268. We consider this opinion unjustified, because the legislative and regulatory amendments in Annex 1904.15 had the basic purpose of allowing Chapter 19 of NAFTA to work. In fact, the same annex includes the commitments of the United States and Canada to legislative and regulatory amendments.

58 See Decreto que reforma, adiciona y deroga disposiciones de diversas leyes relacionadas con el Tratado de Libre Comeráo de América del Norte, published in the Official Gazette of the Federation on December 22, 1993 (Diario Oficial).

59 Dr. Jaime Serra Puche, Secretary of Commerce and Industrial Development, address on the achievements of the negotiation of the Free Trade Agreement between Mexico, Canada, and the United States, to the Commerce Commission of the H. Senate Chamber, on August 14, 1994.

60 E.g., the concept of “standard of review” was not usually used in the Mexican legal system.

61 In its decision in Cut-to-Length Steel, the majority found that the English version of NAFTA, due to a “technical mistake does not explicidy acknowledge international agreements as a direct source of application of antidumping law.” It affirmed also that due to a “technical mistake,” Art. 1904 “does not make any reference to the constitutions of the parties as a potential source of antidumping law.”

62 Semanario Judicial de la Federación, 6a. época, vol. 151–56, Part 6, at 186. In another thesis in relation to the binding force of the Paris Convention for the Protection of Industrial Property, the Supreme Court of Justice concluded that “it must be held that in conformity with Article 133 of the General Constitution of the Republic, it has the category of supreme law of the Union, thus, the competent authorities are obliged to follow it": Semanario Judicial de la Federación, 7a. época, vol. 115–20 at 1 o 1. In a recent decision concerning contradictory decisions of two Circuit Collegiate Tribunals, and thus establishing a mandatory precedent (jurisprudencia), the Court in full, examining the application of the Protocol on Uniformity of the Legal Regime for Powers, concluded that “its rules must be understood incorporated into the national law, according to articles 133 of the Fundamental Law, and thus, must be of obligatory observance, and of direct application on the subject-matter”: Contradiction of proposition 3/92, Supreme Court of Justice, March 2, 1994.

63 By 1995, only four SECOFI determinations had been challenged before the Fiscal Court. Also, by March 1995, 60 of SECOFI’s final determinations had been challenged under the amparo procedure (see text following note 79, infra). Of those, in nine cases the amparo was granted, 40 cases were dismissed, and 11 were under consideration by the federal courts. See Leycegui, , Beatriz, , “A Legal Analysis of Mexico’s Anti-dumping and Countervailing Regulatory Frameword” in Leycegui, B., Robson, W., and Stein, Dahilia (eds), Trading Punches: Trade Remedy Law and Disputes Under NAFTA 5657 (Washington DC: ITAM-C.D. Howe-NPA, 1995).

64 This concept does not appear in any edition of Diccionario Jurídico Mexicano (Mexico: Instituto de Investigaciones Jurídicas-Porrúa, 1988).

65 This article, as amended on December 15, 1995, reads:

An administrative determination shall be declared illegal, when one of the following hypotheses is proven: I. Lack of jurisdiction of the officer issuing, ordering or conducting the procedure, out of which the determination stems. II. Omission of the formal requirements demanded by law affecting any defense of the person, and transcending the outcome of the challenged determination, including absence of basis or motivation, as the case may be; III. Defects on the procedure affecting the party’s defense and transcending the outcome of the challenged determination. IV. If the facts that motivated it were not realized, or they were different, or they were erroneously appreciated, or the determination was issued breaching the provisions that should be applied, or the correct provisions were not applied. V. When the administrative determination, in exercising discretionary powers, does not correspond to the ends for which the law grants those powers. The Fiscal Tribunal of the Federation could bring into the record, on its own motion, for being a public matter, the lack of jurisdiction of the authority to issue the challenged determination, and the total absence of basis and motivation of such determination.

66 Smith, James F., “Confronting Differences in the United States and Mexican Legal Systems in the Era of NAFTA” (1993) 1 U.S.-Mexico L.J. 1, 85.

67 E.g., the purpose of the fiscal area is to collect taxes. It is governed by strict principles of legality regarding taxation, determination, and collection, and its regulation belongs to the domestic field. A compensatory duty seeks to neutralize the negative effects of an unfair trade practice. To establish the amount of this duty, complex calculations must be made to determine both the existence of dumping and the level of injury (which is frequently the object of review). In dumping regulation, international agreement is of paramount importance.

68 Consider, e.g., the effects that the strict application of Art. 238, para. 4: “the facts that motivated it were not realized, or they were different, or they were erroneously appreciated” and its procedural consequences, as established in Art. 239 of the same statute (absolute nullity), would have on the area of anti-dumping.

69 Art. 1911 states that “general legal principles includes principles such as standing, due process, rules of statutory construction, mootness and exhaustion of administrative remedies.”

70 E.g., Art 14 of the Civil Code establishes that civil trials must be resolved in accordance with the literal wording or interpretation of the law, and, if this is not possible, “upon the general legal principles and equity,” but does not explain the specific content of the latter. Art. 17 of the Federal Labour Law also refers to the “general principles of law and equity” without stating their specific content.

71 Diccionario Jurídico Mexicano, supra note 64, vol. 4, 2543.

72 de la Madrid, Luis Malpica, El sistema mexicano contra prácticas desleales de comercio internacional y el TLCAN 16667 (Mexico: UNAM, 1996).

73 “Ardele 8: The administrative act will be valid until, and only when, the administrative or jurisdictional authority, where appropriate, declares it a nullity.”

74 “Article 68: The acts and determinations of the fiscal authorities are to be presumed legal.”

75 Diccionario Jurídico Mexicano, vol. 4, 178 (Mexico: UNAM, 1983).

76 Semanario Judicial de la Federación, 4th period, vol. 73, Sept. 3, 1942, “Amparo administrativo en revisión,” 4, 753-42. Unanimity de 4 votos.

77 “Facultades discrecionales. Apreciación del uso indebido de ellas en juicio de amparo.” I.e., The use of judgment or of the discretionary power granted to the administrative authority can be censored on the amparo suit, when it is exercised in an arbitrary or capricious way, when the decision does not refer to the circumstances that concretely deal with the case at issue, when these (the circumstances) have been modified or the facts upon which the decision is based are erroneous, or when the reasoning upon which it is based is against the rules of logic. Apéndice al Semanario Judicial de la Federación 1917-75, proposition 396, part 3, Segunda Sala, at 653.

78 Black’s Law Dictionary 896 (6th ed., abridged, St. Paul, West Publishing Co., 1991).

79 On amparo, see Fix-Zamudio, , Héctor, and Fix-Fierro, , “Mexico — Constitutional Law” in Blanpain, R. (ed.), International Encyclopedia of Laws (Deventer: Kluwer Law and Taxation Publishers, 1994); Fix-Zamudio, , Héctor, , “A Brief Introduction to the Mexican Writ of Amparo” (1979) 9 Calif. West. Int’l L.J. 306 ; Baker, , Judicial Review in Mexico, A Study of the Amparo Suit (Austin: University of Texas Press, 1971).

80 This is probably the most difficult part of amparo. In fact, the original principles of the amparo (judicial review of the constitutionality of laws practised by judges and courts of the United States, as described by de Tocqueville in Democracy in America) underwent a significant transformation in the second half of the nineteenth century. Contrary to the text of Art 8 of the Amparo Law of 1869, the Supreme Court of Justice accepted the amparo against judicial decisions; that is, not only when such decisions dealt with a question of constitutionality, but also when the incorrect application of a secondary law was alleged. In other words, the exact application of the law became an “individual guarantee” as a result of a liberal interpretation of the ambiguous wording of Art. 14 of the constitution. See Fix-Zamudio and Fix-Fierro, ibid., 108-12.

81 E.g., Malpica de la Madrid, supra note 72 at 221.

82 Manfer, Ruperto Patino, “Recursos ordinario y jurisdiccionales en materia de prácticas desleales de comercio internacional” in Witker, Jorge (ed.), Resolución de controversias comerciales en América del Norte 37980 (Mexico: UNAM, 1994).

83 Decision (English courtesy translation) at 16. (Emphasis in the original.)

84 Ibid., 16.

85 Ibid., 22.

86 Ibid., 23.

87 This was the so-called “privative clause” of the Special Import Measures Act, which stated that decisions of the Canadian International Trade Tribunal were “final and conclusive.” This has generally meant in Canadian administrative law that, rather than the “reasonableness” test being applied as the standard of review, the more deferential “patently unreasonable” test is to be applied. This had nothing to do with a panel’s powers to fashion a remedy as a result of a review of a Canadian final determination.

88 Decision, supra note 83 at 27. In fact, however, of all of the binational panel reviews of Canadian determinations under thé FTA and NAFTA, no panel has rendered a decision invalid. The majority was forced to admit this fact when it stated “[a]lthough no panel has found cause to rule affirmatively when reviewing under this standard.”

89 Any Canadian binational panel proceeding that considered the issue of nullifying a final determination would have to confront the fact that, by its implementing legislation and regulations, Canada has expressly limited the binational panels’ powers to those powers described in Art. 1904.8: supra note 25.

90 1993, c.44, s. 219 (emphasis added).

91 Decision, supra note 83 at 29.

92 Memorandum Opinion and Order Regarding ITC’s Determination on Remand In the Matter of Fresh, Chilled and Frozen Pork from Canada, USA-98–1904-11 (Art. 1904 Binational Panel Review Under the United States-Canada Free Trade Agreement, January 2a, 1991) at 5.

93 Cut-to-Length Steel panel decision, supra notes 1, 4 at 26-8.

* Of Thomas & Davis, Barristers & Solicitors, Ottawa and Vancouver. Mr. Thomas is counsel to the Mexican Secretaría de Comercio y Fomento Industrial (SECOFI). The author would like to thank Alejandro Posadas for his assistance in the preparation of this paper.

Research fellow at the Institute of Legal Research of the Universidad Nacional Autónoma de Mexico. Mr. López was an officer with SECOFI during the negotiation of the NAFTA.

NAFTA Dispute Settlement and Mexico: Interpreting Treaties and Reconciling Common and Civil Law Systems in a Free Trade Area

  • J.C. Thomas and Sergio López Ayllón

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