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The United States-Mexico-Canada Agreement: A Glimpse into The Geoeconomic World Order

  • Sergio Puig (a1)
Extract

The United States-Mexico-Canada Agreement (USMCA) differs in a few important ways from prior trade deals signed by the United States but reveals a glimpse of the infrastructure for a new era in international economic governance. This new “Geoeconomic World Order,” will be characterized by great power rivalry between the United States and China, the intense use of protectionist tools to achieve strategic and political goals, and the diminished role of legal adjudication. This approach to trade policy will likely outlast the autocratic and/or nationalistic governments emerging around the world, including the current Trump administration. While international trade law will recover, it will look different in key respects—it will be less multilateral, predictable, justiciable, and enforceable. This more transactional view of international trade law implies a limit on the role of law and an increase in the use of power. It may force a retrenchment of international interdependence and a revival of zones of influence prevalent during the Cold War era.

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This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.
References
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1 Agreement between the United States of America, the United Mexican States, and Canada, Nov. 30, 2018, Off. of the U.S. Trade Representative [hereinafter USMCA].

2 Anthea Roberts et al., The Geoeconomic World Order, Lawfare (Nov. 19, 2018).

4 Glenn Thrush, Trump's Nafta Plan Could Be Upended by Democrats' House Takeove r, N.Y. Times (Nov. 12, 2018).

5 Roberts, supra note 2.

6 David A. Gantz, US Needs USMCA if It's Serious about Competing with China, The Hill (Nov. 15, 2018).

7 USMCA, supra note 1, art. 31.8.

8 Id., art. 34.7.

9 Sergio Puig & Gregory Shaffer, Imperfect Alternatives: Institutional Choice and the Reform of Investment Law, 112 AJIL 361 (2018).

10 Mexico and Canada are parties to the CP-TPP, which contains ISDS protections. The full ISDS protections are available for investment agreements between U.S. investors and Mexico in the areas of oil and gas, power, infrastructure, telecommunications, and transport. See USMCA, supra note 1, at annex 14-E, para. 2(a)1.

12 USMCA, supra note 1, art. 19.11.

13 Id., art. 19.12.

14 USMCA, supra note 1, at ch. 28.

15 Id., art. 28.20.

16 Id., ch. 27. For the disparate effects of FCPA enforcement, see Rebecca L. Perlman & Alan O. Sykes, The Political Economy of the Foreign Corrupt Practices Act: An Exploratory Analysis, 9 J. Legal Analysis 153 (2017).

17 See, e.g., USMCA, supra note 1, at chs. 23–24. The incoming chair of the Ways and Means trade subcommittee says better enforcement of labor and environmental provisions in USMCA is needed, but is proposing to address the problem through the implementing legislation (USMCA Implementation Act) rather than by reopening the text of the agreement. See Roberta Rampton, Canada, Mexico Sign Trade Deal, Trump Shrugs Off Congress Hurdle, Reuters (Nov. 29, 2018).

18 USMCA, supra note 1, at MX-US Side Letter on 232 Dispute Settlement and CA-US Side Letter on 232 Process.

19 Rachel Brewster, WTO Dispute Settlement: Can We Go Back Again?, 113 AJIL Unbound 61 (2019).

20 USMCA, supra note 1, art. 1 of Annex 14-D; id., art. 32.10.

21 Id., art. 10.12.

22 Tania Voon, The Security Exception in WTO Law: Entering A New Era, 113 AJIL Unbound 45 (2019).

23 Pascal Lami, Former WTO Chief: How This Trade War Ends, Wash. Post (Apr. 19, 2018).

24 Heather Long, U.S., Canada and Mexico Just Reached a Sweeping New NAFTA Deal; Here's What's in It, Wash. Post (Oct. 1, 2018). According to an expert familiar with the negotiations, the Canadian negotiators did not really care about ISDS and realized that the state-to-state dispute settlement that Mexico accepted in Chapter 31 was not likely to work any better than NAFTA Chapter 20. Hence, the binational review process became the deal-breaker.

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AJIL Unbound
  • ISSN: -
  • EISSN: 2398-7723
  • URL: /core/journals/american-journal-of-international-law
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