USMCA Scales Back on Investor-State Arbitration but Preserves Trade Dispute Resolution in North America

The United States, Canada, and Mexico on September 30 announced the framework for a new, revised trade agreement to replace NAFTA, called the United States-Mexico-Canada Agreement (the “USMCA”).

The draft USMCA leaves the NAFTA trade dispute resolution procedures largely intact. However, it proposes several major changes to the U.S.-Canada-Mexico investment arbitration framework. If the USMCA enters into force in its current form (which is not assured), it will sharply curtail investment arbitration among the member states and eliminate it entirely between the U.S. and Canada.

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