U.S. Treasury Secretary Steven Mnuchin and his Trade Representative Robert Lighthizer arrive for a group...
HOW ARE TRADITIONAL TRADE AGREEMENTS ENFORCED?
Many free trade deals have built-in dispute settlement mechanisms for state-to-state disagreements over rule compliance, disputes between private investors and governments, or allegations of unfair anti-dumping and anti-subsidy duties. Arbitration panels often hear arguments from both sides, operating like a court.
Canada, for example, has brought challenges to U.S. anti-subsidy duties on softwood lumber before panels set up under NAFTA's Chapter 19, a mechanism that would be continued if the new U.S.-Mexico-Canada Agreement (USMCA) if ratified. If Mexico fails to implement effective labor reforms, the United States and Canada could seek redress through arbitration. But critics, including many Democrats in Congress, argue that this enforcement mechanism is weak and largely untested.
Andy Wong/Pool via REUTERS