The United States–Mexico–Canada Agreement (USMCA): A New Chapter in the Discussion About ISDS Between Developed Countries »
Juan Miguel Alvarez
This chapter evaluates the United States–Mexico–Canada Agreement (USMCA), which was signed in November of 2018 and is meant to replace the North American Free Trade Agreement (NAFTA). After a phase-out period of three years, the USMCA would eliminate investor-state dispute settlement (ISDS) between Canada and all the other treaty parties. In practice, since both Canada and Mexico are parties to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the USMCA would only eliminate ISDS between Canada and the US. The USMCA maintains ISDS between the US and Mexico, but introduces severe restrictions in terms of the conditions for access to ISDS, the type of investors who are granted access to ISDS, and the type of claims they are authorized to file. The chapter then judges the elimination of ISDS in the USMCA, taking into account the reasons advanced in favour of ISDS between developed countries and the NAFTA experience. It claims that, all arguments considered, the elimination of ISDS between Canada and the US is a rational policy choice.