132 NAFTA- Report Card on Agriculture NAFTA TRADE DISPUTE RESOLUTION: WHAT ARE THE MECHANISMS?

Since NAFTA’s inception, there have been numerous trade disputes and trade frictions among the three signatory countries—some of which even predate the trade agreement. The sources of these disputes might be classified in four general categories. The first results from ambiguities in the agreement itself, which have led to disputes over the interpretation of the agreement. Other trade disputes have emerged or intensified with the deepening of trade and the increased integration of regional agricultural markets. With open borders, do-mestic policies that influence production, prices or trade have more direct spillover effects into agricultural markets in other NAFTA countries, and may lead to trade frictions. Third, an increasing number of disputes are related to sanitary and phytosanitary issues; these disputes are particularly complicated due to the presence of three different regulatory frameworks managing disease and pests within the region. A fourth source of trade disputes is the increased competitive pressure under free regional trade that has led some industries to seek protection through trade actions