Área de Libre Comercio de las Américas - ALCA

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27 de Mayo de 2003

Original: Inglés
Secretaría ALCA


Mara M. Burr
The Humane Society of the United States

Executive Summary

Written Comments of The Humane Society of the United States

Dispute Settlement

1. The settlement of disputes is an important part of the FTAA and should be as inclusive as possible. The current text contains some troubling language that is neither transparent not allows for the participation of civil society in the process. These issues need to be addressed in a manner that provides for greater transparency in the process and a system that is more open to the participation of civil society.

Chapter on Agriculture

2. The negotiations on agriculture need to address the issues of animal welfare and environmental protection. The FTAA Parties should consider the economic benefits of adopting more humane, animal friendly and environmentally responsible agriculture production methods.

General and Institutional Issues

3. A mechanism should be created to allow for the formal participation of civil society in the FTAA process. This would be a bold and innovative proposal and exactly the type of mechanism that will be important to the future of the FTAA.

4. Capacity building and technical assistance are important aspects of the FTAA process but have not received either the attention or the resources necessary to address the needs of the region. The FTAA Parties should create a mechanism whereby governments, NGOs, corporations and other private parties could join forces to begin to address the capacity building needs of the region.


5. To be successful and gain popular support, the FTAA Agreement must be innovative and forward thinking, including to the greatest extent possible the input and participation of civil society in the negotiations and in the overall process.

Chapter on Dispute Settlement

1. A regime for the settlement of disputes is an important aspect of any free trade agreement. The Contracting Parties of the GATT agreed to revamp the dispute settlement system for the WTO so that disputes were settled in a more legalistic and timely manner.1  Although WTO Members had high hopes for the dispute settlement system, there have been a number of problems identified over the last 8 years and Members are currently negotiating changes to the system.2

2. Rather than repeat the mistakes/omissions made in the Uruguay Round, the FTAA negotiators should assess and address the problems identified by WTO Members in the current negotiations to retool the WTO dispute settlement system. These issues include: ability of panels/Appellate Body to accept non-solicited information i.e., amicus briefs; transparency in the process i.e., public access to hearings before panels and the Appellate Body; timely access to information, briefs, oral arguments and other submissions; and the participation of NGOs and private parties in dispute settlement proceedings.

3. The current text of the FTAA dispute settlement chapter contains a number of troubling elements. Each provision will be discussed in the order it appears in the chapter.

Non-Governmental Organizations --Article 4

4. In Article 4, chapter 26, the bracketed text explicitly bars the participation of non-governmental organizations from participating in the FTAA dispute settlement system. What exactly is meant by this language? Are NGOs prohibited from filing amicus submissions, offering support to Parties or offering expert advice to the Panels or the Parties? The FTAA Parties need to clarify the meaning of this Article and set out what roles NGOs may play in the dispute settlement process.

5. This provision does not promote transparency or civil society participation in the FTAA and runs counter to the proposal submitted by the United States to the WTO.3 It is difficult to imagine how the United States or the other 33 FTAA countries will find popular support for the FTAA when provisions such as this are in the proposed FTAA text.

6. The HSUS respectfully requests that the United States declare that this Article is unacceptable and must be rewritten so as to remove the language banning participation of NGOs.

Roster of Panelists -- Article 12

7. Article 12, paragraphs 63 through 66 provide for the establishment of an indicative list of panelists. The individuals may be government or non-governmental individuals. In paragraph 64, the procedure for submitting the names of proposed panelists is set forth:

[To establish the Roster and for its future modifications, the Parties may forward to the Secretariat the names of xx candidates, whether nationals or not, providing for information on their qualifications according to Article xx, within xx months after the entry into force of this Agreement. The Parties shall have a maximum period of xx days, from the date of notification of the proposed candidates by the Secretariat, to indicate in writing via the Secretariat their reaction to the proposed candidates. The Secretariat shall communicate to the Parties whose candidates have been duly challenged for failing to meet the qualifications of Article XX (Roster of Panelists). These Parties shall have xx days to present their new candidates, without prejudice to the Roster, containing the candidates who have not been challenged pursuant to this paragraph, shall be considered approved.]4

8. The language used in paragraph 64 is troubling because proposed dispute settlement panelists can essentially be vetoed by other parties. It should be within the prerogative of each of the Parties to submit the names of proposed panelists without being vetoed by other Parties. The names submitted are for the indicative list of panelists, and individuals on this list may or may not actually serve as a panelist in a dispute. At the time of the dispute, the Parties must agree on the composition of the panel. The Parties should have the option of choosing from a wide range of panelists submitted by the Parties.

9. In contrast to the provisions of paragraph 64 of the FTAA dispute settlement chapter, Article 8 of the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes5 calls for panels to be “composed of well-qualified government and/or non-government individuals . . . .“6

10. Article 8.4 of the DSU sets out that the “Secretariat shall maintain an indicative list of governmental and non-governmental individuals possessing the qualifications outlined in paragraph 1, from which the panelists may be drawn as appropriate.”7 The Dispute Settlement Body (DSB) has final approval over which individuals will be added to the indicative list of panelists.8 This process is clearly more acceptable than the one set forth in the FTAA dispute settlement chapter because individuals are not vetoed for inclusion on the indicative list by other Members and a wider range of potential panelists may be included in the indicative list.

Model Rules of Procedure -- Article 16

11. Article 16, paragraph 83 provides for Model Rules of Procedure to govern the proceedings of the neutral panel. These Model Rules are to be established in Annex XX. The Parties should consult with civil society and other private interests in the development of these Model Rules of Procedure. The FTAA Parties have different legal and procedural traditions when it comes to the settlement of disputes. All parties that will be affected by FTAA dispute settlement, including civil society and private parties should have input into the development of the proposed Model Rules of Procedure.

Expert Advice -- Article 20

12. Expert advice may be sought “[o]n request of a Party to the dispute or on its own initiative, [unless both Parties otherwise agree] the neutral panel may seek information and technical advice from any person or [body] [international organization] that it deems appropriate [subject to such terms and conditions as the Parties may agree].” The issue of expert advice/outside advice is contentious in the WTO dispute settlement context. The FTAA Parties should be clear as to what is intended by “expert advice may be sought.” Does this include unsolicited expert advice or does the use of the word “sought” exclude unsolicited advice? What type of advice is covered by “expert advice?” There are a great many experts on a wide array of issues and expertise is not always measured by academic degree or scientific study. There are several NGOs that are considered experts in a number of areas and could be classified as experts for purposes of FTAA dispute settlement. However, in Article 4 of the FTAA dispute settlement chapter explicitly excludes NGOs from participation in FTAA dispute settlement. This inconsistency in the text should be addressed and corrected.

Jurisdiction of the Neutral Panel -- Article 23

13. The neutral panel “shall have jurisdiction over any dispute concerning the interpretation in application of the FTAA Agreement, as set out in Article XX, and which is duly submitted to such neutral panel.”9 The jurisdiction set forth in paragraph 113 is consistent with other international dispute settlement regimes.

14. In paragraph 114, the language diverts from that used in other international dispute settlement systems - “[a]ny neutral panel having jurisdiction as set out in the previous paragraph shall apply the FTAA Agreement and other rules of international laws not incompatible with the FTAA Agreement.”10 This language is both confusing and troubling. The text of paragraph 114 appears to provide jurisdictional guidance to neutral panels but it also reads as though the Parties intend for the FTAA Agreement to take precedence over all other agreements and rules of international law. Does this mean that the FTAA Agreement trumps other international rules such as, the Vienna Convention on the Law of Treaties?11 In particular, Articles 31 and 32 of the Vienna Convention are widely followed as customary rules of interpretation.12 The language in paragraph 114 is also contradictory from that used in the DSU Article 3.2 where the “[m]embers recognize that it serves to preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law.”13

15. This apparent inconsistency in the FTAA dispute chapter must be addressed and clarified by the negotiators.

Final Report - Article 25

16. The provision for majority and minority opinions to be included in the panel’s final report is a positive development. Panelists should be free to set out opinions that differ from the majority when they believe such action is necessary to preserve the integrity of the decision and the panelist’s legal analysis and opinions concerning the dispute. Majority/minority reports may be a positive force in disputes and in developing clear and consistent legal interpretations of the FTAA Agreement.

Appeal Procedure -- Article 31

17. The timeframes/deadlines set out in Article 31 track those of the DSU. Experience to date with the DSU shows that panels and the Appellate Body have had difficulty in adhering to those deadlines set out in the agreement. It may be worthwhile for the FTAA Parties to reconsider using the deadlines set out in the DSU and instead devise more flexible deadlines to allow adequate time for panels to decide disputes and Appellate review. The Parties may want to consider alternate deadlines for highly complex disputes that involve multiple parties.

18. In paragraph 164, the scope of an appeal is set out -“[a]n appeal shall be limited solely to issues of law covered in the decision made by the neutral panel and legal interpretations developed by the panel.”14 The FTAA Parties may want to reconsider this language in light of experience with the WTO dispute settlement system. In at least one case, the Appellate Body had to reexamine factual decisions made by a panel because the panel failed to consider certain issues that were critical to making a decision in the dispute.15 The authority of the Appellate Body to review factual determinations that form the basis of legal opinions is an important issue in dispute settlement. Without the ability to either review factual determinations or to remand a dispute for further consideration by the neutral panel, the Appellate Body is severely limited in its ability to render fair, complete and comprehensive reports.

19. The Parties should carefully consider: 1) the amount of discretion that the Appellate Body is given in determining the outcome of disputes; and 2) whether it would make sense to allow for limited factual review as well as legal review; and whether to provide the Appellate Body with the authority to remand a dispute for further consideration and clarification by the initial neutral panel.

Confidentiality - Transparency - Article 39

20. Paragraphs 208 and 209 are extremely troubling in that they severely restrict transparency and the participation of civil society in FTAA dispute settlement.

208. All documents and actions related to the procedure established in this chapter, including the hearings before the neutral panel, deliberations [, the initial report,] and all written submissions and communications made to the group, as well as meetings of the neutral panel [and of the Appellate Body], shall be confidential, [except for the final reports.]]

209. [In no case may an organization, individual or groups of individuals, on its/their own initiative, make during any stage of the proceeding, a presentation or written submission, or attend the hearings of the neutral panel.]

21. Although the deliberations of the neutral panel and the Appellate Body may justifiably remain in camera, the restrictions contained in these two paragraphs are unacceptable and step in the wrong direction. Civil society and private parties are directly affected by international trade disputes in a number of ways. Limiting access to panel and Appellate Body proceedings and to dispute documents is not a very effective way to gain popular support for the agreement.

22. The FTAA Agreement and its subsidiary bodies need to be more open and transparent than the WTO, not less. Civil society, private parties and political leaders will not be able to support an agreement that provides for almost no transparency and public participation. The FTAA Parties need to be realistic about how this agreement is viewed by civil society in the 34 countries. The language employed in paragraphs 208 and 209 and the underlying agenda apparent in those paragraphs is completely unacceptable and must be removed from the final text.

23. Paragraph 210 thankfully, appears to be a complete contradiction to paragraphs 208 and 209.

210. [All notifications provided for in this Chapter, all documents in connection with proceedings under this Chapter, and the final reports and procedural rulings of neutral panels shall be made available to the public, except to the extent such documents contain business confidential information as defined in this Article. Moreover, public notice shall be provided immediately upon establishment of the neutral panel. The neutral panel shall conduct its internal deliberations in private. Neutral panel hearings shall be open to the public, except to the extent necessary to prevent the disclosure of confidential information as defined in this Article. The written submissions of disputing Parties and of other Parties participating in a dispute and any submissions made under paragraph XX shall be made immediately available to the public.]

24. Paragraph 210 is a marked improvement over paragraphs 208 and 209. The Parties must address the inconsistencies in these paragraphs and determine in which direction to proceed.

Effective Access - Article 42

25. Effective access to dispute settlement is a laudatory goal. The way in which the Parties intend to ensure “effective access” to dispute settlement may not ensure the impartiality and fairness of the system as a whole. In the WTO dispute settlement system, one particularly sensitive area of concern for many Members is the impartiality of the Secretariat and the extent of the Secretariat’s influence in dispute settlement.

26. In Article 42 the Parties provide that:

“. . . the Secretariat shall provide legal advice and assistance in respect of dispute settlement to developing country members. To this end, the Secretariat shall make available a qualified legal expert to any developing country member which so requests, that shall assist it in a manner ensuring the continued impartiality of the Secretariat.”16

27. The nature of dispute settlement is adversarial with each party convinced of the merits and correctness of its positions. The Secretariat is to serve the interests of all the FTAA Parties and not to show favoritism to any Party on any matter in dispute. It would seem almost impossible to have the Secretariat assist developing country members in disputes and not have it lose at least the appearance of impartiality. The idea that the Secretariat will assist only developing country members in disputes appears to foster an institutional bias against developed countries. This would not be a positive development for the FTAA. The Secretariat must be an impartial body protecting the interests of the FTAA as a whole including both developing and developed, if it is to be credible in its decision-making.

28. The Parties should consider establishing an independent legal body to assist developing countries in disputes at the FTAA. This independent legal authority could receive both public and private funding and could employ full-time and part-time legal staff to assist with disputes. The FTAA Parties could agree to establish the independent legal authority as part of the FTAA but not part of the Secretariat proper. The independent legal authority could enter into consultative agreements with universities, think-tanks and NGOs to provide attorneys, international trade specialists, public policy experts and other individuals with highly specialized experience to assist developing countries in litigating disputes before the FTAA. Law firms and NGOs from the 34 countries could donate attorneys to the independent legal authority for a specified period of time. Universities could establish internship programs for students whereby the students could gain valuable experience working on international trade disputes for developing countries.

29. The independent legal authority system would be an alternative to having the Secretariat involved in dispute settlement. The Secretariat will be tasked to carryout a number of functions adding dispute settlement duties to that list will only burden the Secretariat and force it to undertake duties that will call its impartiality into question.

Third Party Participation/ Public Participation - Annex XX

30. Paragraph 259 in Annex XX is entitled Public Participation. This paragraph includes some forward thinking aspects and sadly some aspects that are far behind the times.

259. [ [ One week after the selection of the last member of the neutral panel, notice shall be provided to the public of the deadline established by the neutral panel for members of the public to submit views on legal or factual issues to the neutral panel. The deadline established by the neutral panel shall permit ample time for the public to prepare submissions and for disputing Parties to respond to any such submissions. The Model Rules shall establish rules concerning the length and format for the submission of such views.] [In no case shall an organization, individual or groups of individuals, on their own initiative, make at any stage of the proceedings, representations or written submissions or appear at hearings before the neutral panel.]]

31. The fundamental problem with the last sentence in paragraph 259 is that it fails to recognize the legitimate interests of civil society in dispute settlement. It would appear that the same countries who fail to recognize the importance of open, transparent and responsive government policy making are the ones proposing such language to the FTAA. This approach is simply unacceptable and out of step with the realities of trade negotiations and trade policy development. Civil society, private parties and NGOs have a legitimate right to information and a role to play in FTAA dispute settlement. The continued failure of certain FTAA Parties to understand the importance of an open and transparent system is a serious threat to a successful outcome for the FTAA.

32. The FTAA Parties should consider how to make the FTAA dispute settlement system open, transparent and responsive to the interests of civil society in all 34 countries.

Experts - Annex XX

33. It is important that neutral panels and the Appellate Body have access to experts in many areas and fields that will provide them with information and expertise necessary to fairly and impartially settle disputes. The openness of the system to experts with diverse backgrounds and expertise is an important and positive development.

Chapter on Agriculture

34. The Chapter on Agriculture addresses an important sector for all of the 34 FTAA countries. Liberalization of the agricultural sector is a contentious issue as illustrated by the difficulties experienced in the current WTO Agriculture negotiations.

35. The current text of the agriculture chapter focuses primarily on tariff reductions, reducing/eliminating export subsidies and reducing/eliminating domestic support. Each of these areas represents important areas for which agreement will be necessary for a successful outcome of the FTAA negotiations.

Domestic Support Measures - Article 15

36. Under the heading Domestic Support Measures, WTO Disciplines and Commitments on Domestic Support, the FTAA agriculture text recognizes that “domestic support measures can be of [crucial] importance to their agricultural sectors, but may also have severe distorting effects on the production and trade of agricultural products.”17

37. The HSUS agrees that domestic support measures can be important to the agricultural sector; the problem is that domestic support measures are not distributed fairly across the agricultural sector in the United States. Domestic support should be directed to sustainable agricultural systems that promote animal welfare and environmental protections. The wide-spread use of chemicals and pesticides in agricultural production endanger the environment, human and animal health. Producers who attempt to use more sustainable practices should be assisted financially through domestic support.

38. In paragraphs 15.2 and 15.3 the FTAA Parties indicate their commitment to reducing domestic support.

[15.2 Recognizing that disciplines and reduction commitments for domestic support measures can be achieved [only] in multilateral negotiations, the Parties agree to continue to work toward an agreement in the WTO negotiations on agriculture to substantially reduce and more tightly discipline trade-distorting domestic support.]

[15.3 To this end, the Parties agree to work toward an agreement in the WTO negotiations on agriculture to achieve:

(a) the elimination or maximum possible reduction of production and trade distorting domestic support, including support under “production limiting” or “blue box” programs;

(b) an overall limit on the amount of domestic support of all types (the total of “green”, “blue” and “amber”);

(c) a review of the criteria for the “green box” to ensure that such support does not distort production and trade; and

(d) agreement that “green box” support should not be countervailable.]

39. The green box of the WTO Agreement on Agriculture puts a number of limitations on the use of such payments.18

Payments under environmental programmes

(a) Eligibility for such payments shall be determined as part of a clearly-defined government environmental or conservation programme and be dependent on the fulfillment of specific conditions under the government programme, including conditions related to production methods or inputs.

(b) The amount of payment shall be limited to the extra costs or loss of income involved in complying with the government programme.

40. The limitations on green box payments as set forth in this section of the WTO Agreement on Agriculture indicate that such payments are to be de-linked from production. Green box payments represent out of pocket costs for complying with a government mandated environmental program.

41. The HSUS believes that green box payments should be provided for environmental and animal welfare programs. Animal welfare is an important issue for a growing number of consumers and other members of civil society in the United States. It is quite clear that public demands for animal welfare provisions in the agricultural sector, persuaded the European Union (EU) to take a strong and progressive position on the issue in the WTO Agriculture negotiations.

42. The FTAA Parties need to recognize that agricultural production, including process and methods, needs to conform to the demands of consumers. In the United States the market for organic, animal and environmentally friendly agricultural products continues to grow at impressive levels. Consumers are demanding agricultural products that promote humane treatment of animals and do not harm the environment.

43. The HSUS respectfully recommends that the FTAA Parties seriously consider the potential benefits of animal welfare and environmental payments “green box payments” in the context of the agriculture negotiations.

44. Developing country Parties to the FTAA should evaluate the extent to which they may be able to take advantage of the growing markets for organic (non-chemical organic) and humane products in both developed and developing countries.

45. The FTAA Parties should explore all opportunities to provide non-trade distorting support to the agriculture sector. Developed and developing countries alike may benefit from switching current production to more animal and environmentally friendly agricultural production.

Text on General and Institutional Issues

46. The HSUS commends the FTAA Parties for creating a Civil Society committee to discuss and evaluate the role of civil society in the FTAA process. The open invitation for comments on the FTAA provides civil society with an opportunity to comment on the draft texts and on the items missing from the negotiations.

Formal Participation of Civil Society

47. Unfortunately, as the foregoing comments highlight there is simply not enough input from civil society into the FTAA process. In some areas of the draft text that were released after the Quito Ministerial there is a clear bias demonstrated against any civil society input. In fact, there appears to be almost open hostility to civil society, NGOs and other private parties in having any role in the FTAA process. Such attitudes are counterproductive and do not recognize the necessity of involving civil society in the process to ensure a successful outcome.

48. It would behoove the FTAA Parties to take seriously the issue of civil society participation in the FTAA process long before the negotiations are scheduled to end. The HSUS believes that at the Miami Ministerial in November of this year the Ministers should announce the creation of a Civil Society committee comprised of members of civil society from the 34 Parties, it could be called the FTAA Committee of Civil Society. This committee could meet at the same time as the FTAA Civil Society Committee of government representatives and share information and recommendations with that committee.

49. Establishing such a committee would be visionary and groundbreaking, exactly the type of initiative needed to show that the FTAA will be an improvement on all the Agreements that have previously been concluded, including the WTO.

Capacity Building

50. An important aspect of the FTAA negotiations is not only the text of the Agreement and the individual chapters but also the ability of all the Parties to participate and benefit from the agreement. Providing technical assistance and capacity building is an important part of the FTAA process and has not received the attention or resources necessary to address the needs of the region. All Parties must work to find new and innovative ways to address the capacity building needs of the region.

51. The HSUS is committed to finding ways to assist developing countries in addressing capacity building needs. The HSUS is working with Central American countries to finds ways to address their needs in anticipation of the U.S. - Central America Free Trade Agreement (CAFTA). Similar to the CAFTA countries, there are numerous capacity building needs in the FTAA countries and no single entity possesses the necessary resources to address those needs. The U.S. Trade Representative is working to find new ways and new partners to assist in the capacity building needs expressed by trading partners. The FTAA Parties should consider whether a formal program for capacity building should be set up whereby government, NGOs, corporations and other private parties can join forces to address the needs of the region.


53. The FTAA texts released at the end of the Quito Ministerial contain both positive and negative elements. The HSUS respectfully requests that the FTAA Parties accept these comments in the constructive and proactive spirit in which they are submitted. The HSUS is willing to work with the FTAA Parties to address any or all of the issues raised in these comments and look forward to playing a constructive role in the future negotiations.

Respectfully submitted,

Mara M. Burr
Special Counsel
International Trade Policy
The Humane Society of the United States

Notas de pie de página

1 Understanding on Rules and Procedures Governing the Settlement of Disputes, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A (April 15, 1994), in THE RESULTS OF THE URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS: THE LEGAL TEXTS, 33 I.L.M. 81 (1994) [hereinafter DSU].

2 See WTO Ministerial Declaration, Ministerial Conference Fourth Session, WT/MIN (01)/DEC/1 (20 Nov. 2001) [Doha Ministerial Declaration].

3 Contribution of the United States to the Improvement of the Dispute Settlement Understanding of the WTO related to Transparency, Communication of the United States, TN/DS/W/13 (22 Aug. 2002).

4 FTAA-Free Trade Area of the Americas, Draft Agreement Chapter on Dispute Settlement, FTAA.TNC/w/133/Rev.2 (Nov. 1, 2002) at para. 64.

5 DSU.

6 DSU Art. 8.1.

7 DSU Art. 8.4.

8 DSU Art. 8.4.

9 Article 23.

10 Article 23, para. 114.

11 See Vienna Convention on the Law of Treaties, opened for signature May 23, 1969, U.N. Doc. A/Conf. 39/27, reprinted in 8 I.L.M. 679 [Vienna Convention].

12 See DSU at Article 3; see also Restatement (Third) of The Foreign Relations Law of the United States §§ 325 - 326 (1990).

13 DSU Article 3.2.

14 Article 23, para. 164.

15 See Canada-Certain Measures Concerning Periodicals, WT/DS31/AB/R (Report of the Appellate Body (30 June 1997).

16 Article 42, para. 219.

17 Chapter on Agriculture, Article 15, para. 15.1.

18 WTO Agreement on Agriculture, Annex 2, paragraph 12.

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