The Logic of Dispute Initiation under NAFTA Chapter 19

Focusing on the North American Free Trade Agreement Chapter 19's dispute settlement mechanism, this article examines why industries in one country initiate disputes at the regional level appealing trade policy in another country. I argue that industries take into account both external and internal dynamics when deciding on dispute initiation. As it relates to external factors, I posit that industries are more likely to dispute unfavorable rulings when they perceive that political pressure from interest groups and looming elections in the protectionist country influenced that ruling. With respect to internal considerations, I contend that wealthy and more concentrated industries will be more likely to appeal unfavorable rulings. Empirical analysis support these arguments by showing that appeals are more likely the closer a ruling is to an election in the protected market, the larger and more concentrated the protected industry, and the wealthier and more concentrated the plaintiff industry. Related Articles McClough, David. 2008. “Public Sector Entrepreneurship: Evidence from Trade Policy.” Politics & Policy 36 (2): 250-267. http://onlinelibrary.wiley.com/doi/10.1111/j.1747-1346.2008.00104.x/abstract Kirshner, Orkin. 2009. “Going Global: The Reciprocal Trade Agreements Act of 1945.” Politics & Policy 37 (1): 151-176. http://onlinelibrary.wiley.com/doi/10.1111/j.1747-1346.2008.00165.x/abstract Collins, Stephen. 2010. “Regional Trade Agreements and Democracy Promotion: Measuring the Influence of Democracy Requirements in Regional Trade Agreements.” Politics & Policy 38 (4): 737-764. http://onlinelibrary.wiley.com/doi/10.1111/j.1747-1346.2010.00256.x/abstract Related Media Strom, Stephanie. 2012. “Ammunition for a Trade War between U.S and Mexico.” The New York Times. September 27. http://www.nytimes.com/2012/09/28/business/global/tomatoes-are-ammunition-for-a-trade-war-between-us-and-mexico.html?pagewanted=all Luhnow, David. 2002. “Sugar Dispute with U.S. Turns Saccharine as Mexico Levies Tax on Corn Sweeteners.” The Wall Street Journal. January 14. http://online.wsj.com/article/SB1010960071959570440.html Enfocado en el mecanismo de resolucion de disputas del capitulo 19 del TLCAN, este articulo examina por que industrias en un pais inician disputas a nivel regional apelando a la politica comercial en otro pais. Argumento que las industrias toman en cuenta dinamicas internas y externas al decidir sobre el inicio de una disputa. En cuanto a factores externos, sostengo que las industrias son mas propensas a disputar sentencias desfavorables cuando estas perciben que la presion politica de grupos de interes y elecciones proximas en el pais proteccionista han influenciado la sentencia. Respecto a consideraciones internas, sostengo que las industrias mas ricas y concentradas seran mas propensas a apelar fallos desfavorables. Analisis empiricos apoyan estos argumentos al mostrar que las apelaciones son mas probables mientras mas cercana sea la sentencia a una eleccion en el pais proteccionista, mientras mas grande y concentrada sea la industria protegida, y mientras mas rica y concentrada sea la industria afectada.