CHAPTER I

The Role of North American Free Trade Agreement (NAFTA) as a

Regulatory mechanisms in the International Trade Law

1.1. Introduction

According to the classical t heory of economy and commerce,

individuals were the major business players unt il t he end of twent iet h
century. The government did not have any specific role in this and t he
intrusion from the government s was t he collect ion of customs tariff which
was acquired at the import venues and served as an addit ional source of
income for t he government.

Business people were eit her individuals or companies which

transported goods from one country to another at their own cost and t hus
made a profit from t his act ivit y. Nevertheless, t here were various
complicat ions in these convent ional int eract ions which were settled
sooner or later in the internal courts of t he country.

The beginning of t he twent iet h century experienced along wit h

many different changes some revolut ions that concerned wit h t he
economic and commercial areas of t he countries.

An increase in t he number of sovereign states across the globe

accompanied by t he expansion in the volume of global trade result ed in
new issues which were totally novel and except ional. The development of
internat ional trade was accompanied by the int eract ions that took place
among the economies of t he various countries and gradually t he internal
affairs of a country’s economy gained int ernat ional impact.

When the idea was proposed in t he US it was felt necessary t hat the
US should be t he pioneer in overcoming support ing policies. Removing
trade resources and a gradual decline of customs tariffs gained a lot of
attent ion. The devastat ing result s of the World War II prepared the
countries to establish a monetary, financial and trade syst em for t he post-
war years which were yet to come. The principle of non-discriminat io n
1
and free exchange of goods and services were among t he object ives o f
this system which was eventually promoted by t he General Agreement on
Tariffs and Trade (GATT) and proved to be very effect ive.

Prior to the establishment of t he World Trade Organizat ion (WTO),

internat ional regulat ion, trade was fundament ally structured wit hin the
General Agreement on Tariff and Trade (GATT) which accidentally came
into exist ence and not by choice.

An overview of GATT 1947 as revealed in it s original t hirt y-five

art icles and subsequent by adding three more art icles in 1965 as part IV, a
mix of immediat e preoccupat ions of t he industrialized countries in t he
post-world war II period by sett ing up a framework for the exchange of
tariff concessions and establishing a code of rules on non-discriminat ion
and unfair trading pract ices. 1

The Object ives of GATT were to improve the standard of life of the
member states, to provide all facilit ies for complete emplo yment, to
increase real incomes and demand level, better utilizat ion of global
resources and to expand internat ional product ion and trade.

World Trade Organizat ion Dispute Sett lement S ystem: The

for mat ion of the WTO was considered as a symbolic event which was
for mally recognized as an int ernat ional organizat ion. The WTO replaced
the less formally const ituted General Agreement on Tar iff and Trade
(GATT). 2

The importance of t he WTO Agreement and it s incorporated

mult ilat eral trade Agreement was to extend internat ional trade law
discipline to the new areas of trade in services, Trade Related Invest ment
Measures (TRIMS) and Trade Relat ed aspects of Intellectual Propert y
Right s (TRIPS) and to make significant improvement s to the met hods

1
Prof.Autar Krishen Koul, The General Agreement on Tariff and Trade (GATT) World Trade
Organization (WTO) Law, Economics and politics, satishupadhyay publisher, delhi, (2005), p1.3
2
Abbott M.Frederick, Law and Policy of Regional Integration: The NAFTA and Western
Hemispheric Integration in the World Trade Organization System, Martinus Nijhoff Publishers,
(1995), p3.
2
intended to guarantee the enforcement of WTO rules. The WTO rules
would generally be applied to the broad spectrum of WTO membership,
thus giving a worldwide character to the set of rules which earlier were
applied in a mult i-t iered manner.

WTO presents it s t hree main object ives as follows: are:

1. It’s a negot iat ing forum

2. It provides a set of rules
3. It helps sett le dispute among members.

The WTO also states that the world trading syst em is governed by
the under lined principles:

 Non- discriminat ion

 Free trade through reduct ion in trade barr iers
 Predictabilit y through mandatory commit ments
 Reasonable and undistorted compet it ion and
 Special treat ment for developing countries

The WTO Agreement contemplates t he co-exist ence of the WTO

and Regional Integrat ions (RIAs) such as the NAFTA. This is provided in
GATT Art icle XXIV rules int ended to govern the for mat ion of RIAs wit h
respect trade in good. It also provides separate rules for services
liberalizat ion regimes in General Agreement on Trade in Services (GATS)
Art icle V.

One of t he most important features of the WTO was a new

procedure for settling legal disputes which was popularly referred to in
GATT / WTO parlance as “dispute sett lement procedure” t hat preceded it,
the WTO procedure was set out in a detailed agreement to as the
‘understanding on rules and procedures controlling sett lement of
3
disputes’.

3
Jackson H. John, Jurisprudence of GATT and WTO Insights on treaty Law and Economics
Relation, (2007), p.3.
3
 North American Free Trade Agreement (NAFTA) is a regiona l
trade agreement between t he USA, Canada and Mexico. This was signed
as a free trade agreement and includes t he governing rules for removing
tariff barriers, Intellectual Propert y Right s, foreign invest ment, rules of
origin, environment, labor, financial services, agricult ural business,
met hods of resolving disputes and so on, NAFTA is not a complet e
met hod for sett ling disputes, rather it includes unique met hods which are
general met hods for resolving disputes, met hod of resolving disputes
relat ing to ant i-dumping dut ies and countervailing dut ies, dispute
resolut ion procedures of Invest ment Disputes and dispute resolut ion
procedures related to environment and labor.

The object ives of NAFTA, as detailed more specifically t hrough it s

principle and rules which include nat ional treat ment, most favored nat ion
treat ment and transparent are:

1. To eliminat e barriers to trade in, and ease t he cross-border

movement of goods and services between the territories of the
part ies
2. To improve t he condit ions of fair compet ition in the free trade
area
3. To develop substant ial invest ment opportunit ies in t he
territories of t he part ies
4. Accommodate adequate and effect ive protect ion and
enforcement of Intellectual Propert y Rights in each part y’s
territory, etc. 4

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http://www.NAFTA-sec-alena.org. visited at 5-Sep-2014, 5pm
4
1.1.1. What is North American Free Trade Agreement (NAFTA)?

After several years of negotiations, NAFTA was founded in the year 1994.
Formed on the fundamentals of CUFTA the 1988 free trade agreement between the
United States, Canada, Mexico joined and NAFTA came into existence. NAFTA was
the precedent as the first trade agreement between unevenly developed economies
which led to many questions, criticisms and controversies. Though NAFTA is
unquestionably the largest and the most impressive free trade area in the world
controversies still exist and a final statement is yet to come.5

NAFTA has proven how free trade increases wealth and competitiveness,
providing genuine benefits to families, workers, manufacturers, consumers and
farmers. The North American Free Trade Agreement (NAFTA) is a complete trade
agreement that frames the rules of trade and investment between Canada, the United
States and Mexico. Since its inception on January 1, 1994, NAFTA methodically
eliminated most tariff and non-tariff barriers of free trade and investment between the
three NAFTA countries.

NAFTA is a formal agreement that sets clear rules for commercial activity
between Canada, the United States and Mexico. NAFTA is looked down upon by a
number of institutions that guarantee the proper interpretation and smooth
implementation of the Agreement’s provisions. The NAFTA is a fact that deserves
close and continuous study from the legal, political, economic and social perspectives.
The present study tries to follow an integrated approach to the NAFTA and its
possible impact on the world trading system. A study of the NAFTA and the regional
integration process may lead to new approaches for assuring that the global
multilateral trading system and the regional system function in relative harmony. The
drafters of GATT 1947 saw RIAs as steps towards the full integration of the world
economy and material well-being for the world’s people and the NAFTA was
considered as an important step in this global process. Even after twenty-three years
of its inception, the results of NAFTA serves as a reference to various developing
countries in deciding whether to join asymmetrical trade agreements or not.

5
1.1.2. International Trade Law and NAFTA

The WTO agreements mainly laid down legal ground rules for international
commerce. These agreements were signed by most of the world’s trading nations.
Mainly contracts that bound governments to keep their trade policies within agreed
limits.

International trade is nothing but the exchange of goods and services across
international borders or territories. There is a significant involvement of the share of
gross domestic product (GDP). In 2010, it is reported that the value of international
trade achieved 19 trillion (current US) dollars, which is about 30% of the world GDP.
This is estimated to be about one-third of the produced goods and services are
exchanged internationally around the world.

The trade law is the body of rules and regulations that governs the
relationships of nation states for regulating their domestic markets in relation to
international trade. Regulation of global exchange of goods and services is the crux of
this law. A multilateral treaty to deal with trade in goods comprises several rules on
international trade is The General Agreement on Tariffs and Trade (GATT).

One of the advantages of exchange of goods or services along international

borders is that it opens up a greater channel for competition followed by more
competitive pricing in the market thus leading to more affordable precuts for the
consumer. The economy of the world is also affected by the change of prices. This is
usually a result of supply and demand, making goods and services accessible which
otherwise would not be available to consumers globally.

From the definition, we can make out two important points:

When we see business relations extending out of borders due to more than one
country interface to all trade and business relation, international trade law will come
under discussion.

If this scenario is accomplished in the national area or borders, no intervention

is required, even if the trade relations are accomplished between different states of
one country.

5
Petar Buva,M.S.The Reflections on NAFTA and what can be learned from it, San
6
The WTO agreement establishes a working party review process to evaluate the
conformity of RIAs with its rules. Despite the fact that the WTO agreement foresees
co-existence between the WTO and RIAs, including the NAFTA, the relationship
between the WTO and RIAs in imprecisely defined, and conflict between the WTO
rule-system and the RIA rule-systems are inevitable.6

The WTO Agreement establishes the individual constituent countries of the

RIA as responsible for compliance by the RIA with WTO rules, except in the special
case of the European Union, which shares direct responsibility with its member states.
The NAFTA parties, however, agreed that their regional rules will take precedence
over GATT Rules as between themselves, and this rule of priority may extend to part
or all of WTO rules. The NAFTA parties, in general, may elect either WTO/GATT,
NAFTA dispute settlement procedures to resolve conflicts arising under both
agreements. In the case of environment related dispute among the NAFTA and
WTO/GATT rules with respect to environment-related provisions are different in
some important respects.

1.1.3. Regulatory Mechanisms

NAFTA establishes a variety of committees and working groups intended to

facilitate implementation of the agreement and the coordinate efforts to make
regulatory standards compatible, for example, The NAFTA chapter on Technical
standards provide for the establishment of a committee on standards-related measures.

This committee is chartered, inter alia, to facilitate the process by which the
parties make compatible their standards – related measures and to provide a forum for
consultation on issues relating to standard – related measures.

International dispute settlement can be structured in a variety of ways. Stages

of proceedings are as a) Consultation, b) Review by the free trade commission, c)
Referred to an Arbitral Panel, (d) Post-panel proceedings. The NAFTA employs a
number of dispute settlement mechanisms, though none involving the establishment
of a permanent judicial organ comparable to the European court of justice.

Marcos,Texas.May, 2012, p3.

6
Supra No. 2 p. 3
7
 Dispute settlement mechanisms have always constituted an excess part of
economic and diplomatic relations.

Governments have regularly employed diplomatic means to resolve disputes

within the international trade field; the World Trade Organization (WTO) disputes
settlement has used not only conciliatory means but also the rule of law.7

Regionally speaking, within the North American Free Trade Agreement, this
is based on the General Agreement on Tariff and Trade.

The NAFTA Chapter 20 dispute settlement mechanisms base its legal origins
in the former CUSFTA Chapter 18 dispute settlement mechanism, which followed
three stages. Bilateral consultations, trade commission review and binding arbitration.

1.2. Research Questions

What is evolut ion of internat ional trade?

What is nature, scope and object ives behind NAFTA?
Did NAFTA play a central role for development of it s part ies as well as
internat ional trade?
What are judicial procedures of NAFTA dispute settlement syst em?
What is legal relat ionship between NAFTA and other internat ional trade
agreement ?
What are internat ional trade problems whether NAFTA could
improvement t hem?

1.3. Statement of the Problem

This work is to be covered wit h historical int ernat ional trade

through different agreement s, namely GATT, WTO, GATS, and regional
agreement like NAFTA. Scope and limit at ion of the subject matter, dealt
by t hose agreements, it tries to highlight the evolut ion of trade from
nat ional to internat ional level. Beside t his, this study tries to find out the
role of NAFTA in internat ional trade. Anot her point is whether the
provisions that are designed in NAFTA agreement are able to attain,

7
http://www.NAFTAworks.org visited at 10-Oct-2014, 11am
8
contribute to the har monious development and expansion of world trade
and provide a catalyst to broader internat io nal cooperat ion and also cover
some of the internat ional trade problems. In every country, we cannot
ignore the role of trade relat ion wit h the development of it, but of course,
these relat ions would not funct ion wit hout conflict, so what mechanisms
envisage for dispute sett lement in these agreement s and which one is
more successful.

1.4. Objectives of the Study

1.4.1. General Objectives

With the role of NAFTA as regulatory mechanisms, international trade law the
research purpose is:

 To examine effects of the NAFTA agreement on international trade and

objectives behind it.
 To analyze the reasons for replacing of each agreement instead of another
agreement.
 To find out the motives and objectives of NAFTA parties.
 To analyze the legal relationship between NAFTA and other agreements.
 To analyze and to discuss about procedure of dispute settlement resolution of
GATT, WTO and NAFTA agreement.
 To study international trade problems and effective measure has been taken till
today.

1.4.2. Specific Objectives

 To study NAFTA and investment, a Canadian perspective.

 To find out multilateral investment guarantee agency in attracting foreign
investment.
 In analysis chapter 20 dispute settlement mechanism and WTO’s, dispute
settlement.
 To find out the similarities and differences of the NAFTA a WTO’s dispute
settlement process.

9
1.5. Research Hypothesis

This research has been conducted to check t he fo llowing

hypothet ical statements derived from var ious related literature. These are:

a. There are many int ernat ional trade agreements, but the mechanis m
provided under t he NAFTA agreement suffices to contribute to the
harmonious development and expansion of world trade and
accommodate a catalyst to broader Internat ional trade.
b. As a result of t he NAFTA agreement, it is in favor of it s regional
part ies covered under NAFTA.

1.6. Significance of the Study

The purpose of why t his study is significant could be understood

from different points of view. First, the proposed North Amer ican Free
Trade Agreement (NAFTA) represents a notable change in relat ions
among Canada, Mexico, and t he United States in t erms of trade. The
impact of the agreement on the three economies has generated
controversy and some degree of alert wit hin each nat ion. They assess how
NAFTA will influence areas, for example, internat ional trade and
consider the significance of the trade agreement holds for the rest of t he
world.

Secondly, t he North American Free Trade Agreement invo lved

considerably more t han trade barrier reduct ion. This gives an in-dept h
examinat ion and analysis of t he structure, funct ions, and perfor mance o f
the NAFTA inst it ut ions from their beginning. Finally, after engaging t he
discussion by giving an overview and examinat ion of t he general result s
from t his study, researchers assess t he alt ernat ives and give suggest ions
for future research and it will also serve as a springboard for furt her
study in t his field. The effect of t he agreement in spurring a dramat ic
increase in trade and financial flows in developing countries and NAFTA.
The study will be benefit ing by drawing lessons from the experience o f
NAFTA for policymakers in developing countries in legal aspects of t he
view. The foremost of t hese is t hat in an increasingly globalized trading
10
syst em, bilateral and regional free trade arrangement s ought to be used to
accelerate, rat her than postpone, needed structural reform of their own
countries.

In addit ion, important ly, t he outcome of this research will have a

mult i-dimensional significance for t he realizat ion of sustainable
internat ional trade and invest ment. In part icular:

a) It will call t he attent ion of t he int ernat ional actors concerned and
will recommend t hem to reconsider and rearrange t heir
management system.
b) It will offer a t imely contribut ion to the domain of literature
relat ing to the subject matter.
c) It will serve as an informat ive tool for government al and non-
government al bodies and input for the concerned policy and
lawmakers at all levels.
d) It will create awareness among mult i-nat ional companies about the
legal instrument s relat ing to the NAFTA in t he int ernat ional trade
so that they can be engaged in the internat ional market in
compliance wit h the laws.

1.7. Scope and Limitation of the Study

Extend to an overview of t he history and background, of trade from

the nat ional level to internat ional through different legislat ions and
agreement s, GATT to new WTO, GATTs and NAFTA and their result,
object ive and effect on internat ional trade. The research would focus the
attent ion on NAFTA agreement as a first free trade agreement since the
field of t hat is ver y vast so it is not possible to cover all subject matter
for t hat. So the researcher focuses on some part icular chapter dispute
sett lement, invest ment, intellectual property and etc.

The present study probes into the exist ing internat ional agreement s
specially NAFTA to find out how far these agreement s can be as an
example for developing countries and t hird world countries. Further, this
study focuses on the relat ionship of t hese agreement s and their rule in
11
globalizat ion of internat ional trade. Finally, the researcher has limit ed the
study to examine the procedure of dispute, settlement resolut ion of t hese
agreement s and their effect on trade.

1.8. Research Methodology

1.8.1. Types of Data and Methods of Data Collection

The study is based on internat ional convent ions/treat ies,

internat ional declarat ions and norms relat ing to NAFTA in internat ional
trade as-well-as related literatures and commentar ies. For this purpose,
Doctrinal Method has been adopted. It is substantially doctrinal in nature with a
combination of Critical, Comparative, Historical and Analytical approaches.

The researcher has gathered much information based on library research with
emphasis primary and secondary documents. A law library contains highly
specialized materials and this requires special skill to handle. Basically legal material
consists of statutory law and conventions. Researcher uses the Primary Sources,
treaties, Court’s decisions both at national or international level. Also included are
Secondary Sources crucial to thorough research - treatises, periodical literature,
current awareness tools and web links.

1.8.2. Methods of Data Analysis and Interpretation

The data and informat ion to be collected through the

instrument alit y of t he above-ment ioned techniques will be systemat ically
organized, qualit at ively analyzed and interpreted in reference to the
relevant int ernat ional legal and normat ive standards and pr inciples,
related literatures, good pract ices and cases decided by int ernat ional
judicial tribunals and other bodies.

1.9. Review of Literature

Review of literature is one of t he important principles of t he

research process, which exposes the researcher to discuss t he various
studies and informat ion relat ing to the research area. In the present study,

12
the researcher has examined and reviewed the approach adopted by
various eminent scholars on int ernat ional trade.

Some books are discussed herein, such as:

1. Law and policy of regional integration, the NAFTA and western

hemisphere integration into the world trade organization by
Frederick M. Abbott, 1995 in t his book the Author point out different
aspect of NAFTA including legal analysis and comment ary on t he
agreement, he also provides t hat comprehensive approach to the study of
the NAFTA and it s significat ions for t he global trading system. It covers
the polit ical and legal progress of NAFTA approval as well as the
NAFTA’s potent ial economic impact. The examines t he legal rules of the
WTO created to regulate t he operat ions of regional integrat ion
arrangement s and among numerous areas as diverse as agriculture,
dispute sett lement environment, intellectual propert y rights, invest ment
and labor.

Researcher ident ificat ion: t he aut hor has focused on the NAFT A
aspects and from legal and economic approach, but t he researcher will
concentrate upon legal and its effect on trading syst em and legal
relat ionship of t hat wit h other agreements.

2. The law and policy of world trade organization context, cases and
materials by Peter van den Bossche. The Aut hor noted that bot h
inst itut ional and substant ive law of the WTO; make clear t he basic
principles and under lying logic of WTO law and the world trading
syst em.

Researcher ident ificat ion: The aut hor has discussed about WTO
principles, but he does not cover the impact of t hat in t he trading system.
The researcher will examine it s role on int ernat ional trade even at global
level.

13
3. NAFTA and investment (NAFTA law and policy by Seymour J.
Robin (Editor) Dean C. Alexander / Editor), in t his book the Aut hor
ment ioned there are invest ment aspects of the North American free trade
agreement (NAFTA) which considerably enhance the opportunit ies for
foreign invest ment among the signatories, at the same t ime improving t he
securit y of such invest ment.

NAFTA reflects t he part ies' recognit ion t hat liberalizat ion of host
country invest ment restrict ions is as important as t he eliminat ion of trade
barriers. In this book the Author Analyses both advantages and
disadvantages of this policy upon the invest ment, climate wit hin the
countries of t he various signatories.

Researcher ident ificat ion: The author has focused on t he

invest ment aspects of NAFTA, but he did not go through it s impact on
trading syst em he has not covered other aspects, so the researcher will
concentrate on those aspects which aut hor could not cover.

4. NAFTA-past, present and feature (International Handbook on

Economic Integration) hard cover-1999.The Author opinioned that
NAFTA has been described by one expert as being a part ial customs
union. It is, in any case special kind of free trade area because it consist s
of world economy. In this book, the Author examines the specific int erest
of the t hree member countries, Canada, Mexico, and the Unit ed States in
the creat ion of NAFTA. Contributors also assess t he influence of t his
trade area of their economics.

Researcher ident ificat ion: The author has edited specific interest of
three members of NAFTA Agreement, Canada, Mexico, and United State
in the creat ion of NAFTA and influence of t his trade area on their
economy. But the researcher will examine this trade area on the
internat ional and global trade and t he impact of t hat on t he trade
relat ionship between these three countries.

14
5. International trade law cases and materials by Raj Bhala, Michie
law. publisher in t his book the Aut hor mentioned inst itut ional foundat io n
of the GATT-WTO-NAFTA and dispute resolut ion procedure and the
substant ive foundat ion of t hem and aut hor highlights, t he origin, nature
and achievement of GATI-WTO and NAFTA.

He focuses on the inst itut ional dimension of t he infrastructure t he

nat ional. The most relat ed part of NAFTA of t his book is in chapter 2
which he discusses historical antecedent of NAFTA namely CUSFTA and
subsequent polit ical development. He also point s out some legal and
economic repercussions of NAFTA.

Researcher ident ificat ion: t he aut hor has ment ioned about the
foundat ion of GATT, WTO, NAFTA and historical background, but the
researcher will concentrate on their impact on trade from nat ional to
internat ional level on their legal relat ionship and reasons for replacing o f
each agreement inst ead of other agreement s.

6. Key issues in WTO dispute settlement: The first Ten years by

Rufus yerxa and Bruce Willson Cambridge University, 2005. In this
book, Aut hor has examined aspects of the operat ion of the WTO dispute
sett lement syst em dur ing t he first ten years of the WTO. It covers a
representat ive cross- sect ion of t he issues and situat ions WTO member
has dealt wit h under the dispute sett lement understanding.

This book includes contribut ions from nearly the ent ire gamut of
actors involved in t he day to day operat ion of the WTO dispute sett lement
syst em. Member government representat ives, private lawyers who lit igate
on behalf of member governments in the system. Appellate body
members, appellat e body secretarial staff, and WTO secretarial staff. It
provides fascinat ing insights into how the syst em has invo lved in
pract ice, and how the lessons of t he First Decade can be applied to make
the syst em even more successful in t he years to come.

Researcher ident ificat ion: The aut hor has examined the operat ion
of t he WTO dispute sett lement syst em, but the researcher will examine
15
the operat ion of t he all dispute settlement agreement s on trade and make
out which one use as an example for t he development of countries.

7. Regulation of energy in international trade law. WTO, NAFTA and

energy character by Yulia Seliva Nova Wotters Kluwer law &
Business, 2011. In t his book the Author, analyses energy trade &
invest ment under t he North American free t rade agreement in 3 parts. Part
I provide some general remarks on NAFTA, in part 2 introduce t he issue
of energy under NAFTA, and part 3 contains t he analysis of NAFTA’s
energy provisions. The Author also concentrat ing on the applicat ion o f
the WTO agreement, to energy trade as well as energy-related problems
addressed in t he current WTO negot iat ions.

Researcher ident ificat ion: t he author has focused on chapter six of

NAFTA agreement regarding energy the researcher will use of t his book
as one aspect and it s impact on NAFTA part ies as well as internat ional
trade.

8. World trade law Text, materials or commentary by Simon Lester

and Bryan Mercuric with Arwel Davies, Oxford & port land, Reuben,
2008. As the WTO takes on an increasingly important and visible role, we
are fortunate to have world trade law as resources. In chapter 3 of t his
book, the Author has explained t he history & background t he auto as an
inst itut ion, including its origins as the GATT, it s goals, basic structure,
classificat ion about the nature of t he WTO and also Author has discussed
about world trade law and its relat ionship wit h internat ional law, the
sett lement dispute in GATT / WTO and tradit ional GATT obligat ions.

Researcher ident ificat ion: the researcher will find out how t he
WTO, GATT impact on int ernat ional trade law, and help to make sets of
rule for governing different aspects of trade, and also point out the
effect iveness of the different dispute settlement system of enforcement
trade rules.

16
9. NAFTA, WTO and Global Business strategy: How aids, Trade and
terrorism affect our economy, by Bradly J. Condon. 2002. The Aut hor
has explained key features of NAFTA and WTO rules on Trade in goods
and services, foreign direct invest ment and int ellectual propert y
protection and clarifies how these rules impact on global business
Strategies.

The Aut hor has used examples to explain how t hese agreement s
work and how they change crucial Business int erests. He examines the
polit ical context in which the negotiat ion and binding of trade agreement s
take place and how business people enforce t he rules and influence t he
negot iat ions to protect global business st rategies. He also shows how
NAFTA, WTO, and global business strategy affect some of the major
problems of our t ime, such as aids global secur it y, environment al
protection, globalizat ion protesters, and illegal migrat ion from Mexico to
the Unit ed States.

Anyone doing business from, to, and wit hin the NAFTA region will
find t his fundament al reading. NAFTA and WTO int eract in ways t hat can
make or break a company's strategy. Business strategist s must examine
the impact of today’s rules & how future development will affect them.

Researcher ident ificat ion: the aut hor has focused on t he effect o f
WTO and NAFTA rules on global business strategies, so he has not
covered other agreements the researcher will focus on t he other and will
br ing them beside each other to find out how they are relevant to each
other.

10. The jurisprudence of GATI and WTO: Insights on treaty law &
economics relations by John H Jackson, 2007. The content of this
book's relevance to contemporary issues in internat ional trade Aut hor has
given an introduct ion about the origin of GATT through to the Uruguay
round of trade negot iat ion and t he WTO.

Researcher ident ificat ion: The aut hor has explained the history and
background of GATT and WTO, which researcher will explain also why
17
they came into existence and what their object ives were and how they
effect on trade in internat ional level.

11. The GATT Uruguay Round: 1986-1992 Negotiating history by T.

P. Stewart, 1993. The aut hor has dealt wit h t he most ambit ious round o f
mult ilat eral trade negot iat ions since the for mat ion of t he GATT was
normally launched in Punta del Este, Uruguay in 1986 wit h more t han 100
part icipat ions in the “Uruguay round” Negot iat ion, complex economic
problems and difficult polit ical realit ies made reaching internat ional
accord on t he major trading issue a long arduous process. Three – volume
set present a history of t hese negotiat ions, portraying how part icipat ing
nat ion reached t heir current posit ions on the proposed major changes in
trade in agr iculture and text iles, adopt ion of the rule for trade in services,
review of exist ing trade regulat ions, increased protect ion of intellectual
propert y.

Researcher ident ificat ion: The aut hor has discussed about Uruguay
Round t he effect ive negot iat ion, before t he Uruguay round; GATT was
the most important agreement on trade among different government s. The
researcher will explain how far t his round has played a vital role, other
rounds focused on reducing tariffs, but the recent round dealing wit h
more comprehensive issues regarding trade and commerce.

Articles:

1. Governance of International Trade under World Trade

Organization Agreements_ Relationships between World Trade
Organization Agreements and other Trade Agreements BY Mitsuo
Matsushita, journal of world trade 38 (2): 185_210, 2004. The purpose
of Aut hor in t his art icle is to look at the relat ionship between WTO
Agreement s and other trade agreement s, that among WTO Agreement s
and wit h sovereign jurisdict ions of members, “trade agreement s’’ are
used in a wide sense and include agreement s that deal wit h financial
matters such as the IMF and the World Bank. There are a great number of
trade agreement s in the world now and it is impossible to examine every

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one of such agreement s. Therefore, one has to take some samples of such
trade agreement s and examine t he relat ionship between them. Therefore,
the aut hor of this art icle does not claim to be a comprehensive study o f
the relat ionship between WTO Agreement and other trade Agreement s. Its
purpose is a more humble one. This is merely to illustrate the relat ionship
between such agreements and see what adjust ments can be made.

Researcher ident ificat ion: in this art icle, the aut hor has focused o n
the relat ionship between agreements, but the researcher will use of these
relat ionships to explain t heir impact on int ernat ional trade and how t hese
agreement s help to overcome of internat ional trade barriers.

2. FROM GATT TO GATS: A Historical Perspective BY Dipankar

Dey, 2006 The ICFAI University press. The aut hor of t his art icle
delineates t he impact of world trade organizat ion (WTO) on the world
economics in t he area of internat ional trade and services. There is a shift
in a trade scenario wit h implement at ion of GATS (General Agreement on
Trade and Services), which has brought the services sector under t he
trading syst em. GATS is the first mult ilat eral trade agreement to cover
trade in services like banking, insurance, informat ion technology, healt h,
educat ion, etc.

GATS archit ecture is built on the sovereign commit ment made by

WTO members, and hence, gained more credibilit y over Pre_WTO
agreement of GATT (General Agreement on Tariff and Trade), which
lacked the support of developed economies. The WTO umbrella covering
global trade in goods, services and int ellectual propert y right also
liberalizat ion t hrough the ‘request’ and offer’ approach.

The art icle has been divided into two parts. In part I, the aut hor has
traced the genesis of World Trade Organization (WTO) in the post _world
war II period. In part II, different provisions of GATT have been
discussed.

Researcher ident ificat ion: The researcher will find out the impact
of t hese agreement s help wit h the development of trade and whet her t he
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GATS agreement wit h cover services sector could help to the
internat ional trade.

3. WTO and Trade in Services Some Issues BY

DR.V.BALACHANDRAN, 2003, VOL 45. In this art icle, t he aut hor has
taken up some issues connected wit h t he role played by the World Trade
Organizat ion (WTO) in the area of trade in services. Tracing the origin of
the three pivotal organizat ions (IMF, World Bank, and ITO), t he author
explains t he outcome of t he various ministerial conferences held by t he
WTO and t he emergence of the General Agreement on Trade in services
(GATS), as well as the salient features of this agreement. The aut hor
concludes his analysis wit h a report on a ‘major trade victory for India
and several other countries’ in t he matter of ant idumping dut ies, wherein
the WTO held t hat a controversial Amer ican law violat ed global trade
rules.

4. The GATS Framework and Trade in Professional (legal) services,

BY Russell Miller. Scott Gallacher, 2002, The ICFAI journal of
international business law, Vol, II, No3. Globalizat ion of trade in legal
services is facing a number of obstacles and barr iers due to the var ied
nature of individual nat ional laws. The restrict ions that may arise in trade
can be of two categories: Restrict ions or restrict ions on the format ion of
foreign law fir ms and the limit at ions imposed on joint ventures between
local and foreign law firms. The market-oriented regulatory refor ms in
developed and developing countries generated new opportunit ies for
foreign fir ms in domest ic markets, which were previously not available to
foreign compet itors. The main object ives of GATS are progressive
liberalizat ion of trade in services and to eliminate t he obstacles and
barriers to legal service providers. Countries across the world are quite
optimist ic t hat the current negot iat io ns on trade in services will lead to
the removal of these barriers. The authors are of t he opinion t hat
liberalizat ion in market access to legal services must ensure t hat the
changes are based on t he pract ical aspects of trade in legal services and
are not theoret ical in nature.

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5. WTO Law on Technical Barriers to International Trade, BY; Dr.
Second Komawar, Vol 38; 455, 2003. The author of this art icle has given
introduct ion regarding technical barr iers to internat ional trade, the state
have been tradit io nally imposing certain barriers to the internat ional trade
and the barriers exist even in t his age of ‘glo balizat ion’ and also
discussed about WTO, technical barr iers and about first formal agreement
in this regard, t he agreement on technical barr iers to trade (generally
referred to as the ‘standard code’) was concluded as part of t he Tokyo
round negot iat ions, purpose of the TBT.

Agreement and scope of the TBT Agreement, obligat ions of

member states under TBT Agreement. Finally, t he analysis of t he var ious
provisions of t he TBT agreement, which is one of the specialized
agreement dealing wit h t he issue of technical regulat ions and also the
decisions of the panel and appellate body of t he WTO, which have
decided var ious disputes under the TBT Agreement.

Researcher ident ificat ion: t he researcher will explain int ernat ional
trade barriers and the solut ion for overcoming of t hese problems, which
have been imposing t ill today t hrough different agreement s.

1.10. Chapter layout

The research aims primarily to assess whether the int ernat ional
inst itut ional mechanisms and legal/normat ive frameworks are, to the
extent required to find out the mechanisms of NAFTA in Internat ional
Trade. Hence, the contents of t he paper will be organized under six
chapters. These include:

CHAPTER I: The first chapter introduces the subject matter of the

research, the statement of the problem which is going to be addressed by
the research, t he general and specific object ives set by the researcher in
order to examine the problem, and t he significance or contribut ion of t he
research finding. It also highlight s the met hodology on how the research
is conducted, i.e., which data are to be used as-well-as how the data is to

21
be collected and analyzed. In general, t he first chapter will give us a
general picture of what the research would look like.

CHAPTER II: Internat ional background of trade t hrough internat ional

trade agreement s especially NAFTA. The second chapter is intended to provide
a brief orientation to, or topography of, the GATT/ WTO (the heart of the multilateral
world trading regime), GATS and other agreements and the two major regional
trading blocs in the world: the North American Free Trade Agreement (NAFTA)
between the USA, Canada and Mexico, and the European Union. The intention of the
chapter is merely to highlight the principal elements of these arrangements, and not to
explore them in detail and to look into the relationship between WTO and other trade
agreements.

Prior to 1994, no multilateral or international organization dealt with the trade

issues between the countries. For more than fifty years the international trading
system functioned without an organization under the guidance of General Agreement
on Tariffs and Trade for which the rules had been developed and respected.8

CHAPTER III: Deals wit h definit ion, nature and object ive of NAFTA
agreement. The third chapter will explain what NAFTA is, what was the reason for
United States, Canada and Mexico to decide to create NAFTA? There are several
reasons due to which countries enter trade agreements one of them being to acquire
economies of scale. In this study a discussion on benefits of free trade agreement and
listing out the specific motives that the United States, Canada and Mexico had to
create NAFTA. The North American Free Trade Agreement is an event of great
significance to the citizens of Canada, Mexico and the United State and to the world
as a whole.

CHAPTER IV: Analyt ical study of different aspects of NAFTA. The

fourth chapter, part one brings out similarities and differences between two dispute
settlement system WTO and NAFTA chapter 20. In chapter four, part two the
discussion is on the Investment Chapter of the North American Free Trade Agreement
("NAFTA") that has been entered into between the United States, Canada and

8
Anne.O.Krueger and Chonira,The WTO as an International Organization, paper presented at the
conference on the World Trade Organization held in Singapore in Dec 1996,p1(unpublished).
22
Mexico, (collectively, the "Parties") substantially improves the: opportunities for
foreign investment in the three nation, Improving the safety of such investment. The
Parties agree on the fact that elimination of trade obstacles is as important as
liberalization of host country investment limitations. The NAFTA reflects the same
too. There is one opportunity for NAFTA parties to join MIGA convention which will
guarantee the foreign investment.

In chapter four, part three will discuss about NAFTA and Intellectual Property
Rights. The North American Free Trade Agreement (NAFTA) intention was to
protect every phase and feature of the trade between the three countries – the United
States, Mexico and Canada which were the Parties. One of the important trade
“barrier” or the discriminating trade practice that the NAFTA was concerned about
was the international piracy of Intellectual Property (IP) rights. NAFTA’s provisions
of intellectual property created the highest legal standards and enforcement of
intellectual property that were never negotiated.

CHAPTER V: Deals wit h t he crit ical study of int ernat ional trade and
improvement of problems. In chapter five will explain why do we need a theory
of international trade at all? Why is the analysis of the economic, political and social
implications of exchange between traders in two national markets different from the
analysis of the implications of exchange between traders within a single national
market? And also will discuss about international advantages, disadvantages. In the
years since its establishment, UNCITRAL has been recognized as the core legal body
of the United Nations system in the field of international trade law.

CHAPTER VI: Conclusion and Suggest ions. The last chapter is t he

conclusion and suggest ions part under which the principal findings of t he
research will be pointed out. This chapter will also cover possible
measures to be undertaken to fill t he gaps in t he controlling mechanism,
if any, will be forwarded. This chapter is to be followed by the lists of
bibliography and annexes.

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