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Towards a North American Law

The North American Law Project: Presented by the Center for North American Studies

Literature Review*

Compiled by: Matthew T. Simpson Center for North American Studies American University, Washington, DC matthewtsimpson@gmail.com 202-375-1101

July 3rd, 2006

*DRAFT – Not meant for citation or reproduction without permission of editor

1 Electronic copy available at: http://ssrn.com/abstract=1396269


TABLE OF CONTENTS 1.

INTRODUCTION ...............................................................................................................................................3

2.

HARMONIZATION OF LAWS ........................................................................................................................4

3.

PRIOR HARMONIZATION EFFORTS ..........................................................................................................5

4.

IMPEDIMENTS TO CREATING A NORTH AMERICAN LAW..................................................................8 4.1 4.2

5.

CIVIL AND COMMON LAW TRADITIONS .......................................................................................................8 FEDERALISM .............................................................................................................................................11

ENCOURAGEMENTS OF A NORTH AMERICAN LAW .........................................................................13 5.1 AFRICAN LEGAL HARMONIZATION ............................................................................................................13 5.2 EUROPEAN UNION ....................................................................................................................................14 5.4 TRANSNATIONAL LEGAL MOBILITY ...........................................................................................................17 5.5 TECHNOLOGY ...........................................................................................................................................18 5.6 THE NORTH AMERICAN FREE TRADE AGREEMENT .................................................................................19 5.6.1 Indirect Harmonization .....................................................................................................................20 5.6.2 NAFTA Dispute Resolution..............................................................................................................22 5.6.3 The Side Agreements.......................................................................................................................23 5.6.4 NAFTA’s Failure to Encourage Greater Legal Harmonization ...................................................25

6.

AREAS OF POTENTIAL HARMONIZATION ............................................................................................26 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13

7.

ANTI-TRUST ..............................................................................................................................................27 CLASS ACTIONS .......................................................................................................................................27 CRIMINAL LAW ..........................................................................................................................................27 ENVIRONMENT ..........................................................................................................................................28 FORUM SELECTION/CHOICE OF LAW .......................................................................................................28 HUMAN RIGHTS ........................................................................................................................................29 IMMIGRATION LAWS ..................................................................................................................................30 INSOLVENCY .............................................................................................................................................31 INTELLECTUAL PROPERTY AND PATENT ..................................................................................................33 LABOUR ....................................................................................................................................................34 POWERS OF ATTORNEY ...........................................................................................................................35 SECURED FINANCING AND INVESTMENT ..................................................................................................35 TAX ...........................................................................................................................................................37

TOWARDS A NORTH AMERICAN LAW ...................................................................................................37 7.2 FACILITATORS OF HARMONIZATION .........................................................................................................38 7.3 INSTITUTIONS ............................................................................................................................................39 7.3.1 North American Trade Tribunal (Appellate Tribunal) ...................................................................41 7.3.2 North American Court of Justice .....................................................................................................42 7.3.3 North American Charter of Fundamental Rights ..........................................................................42 7.3.4 North American Bankruptcy Agreement ........................................................................................43

8.

CONCLUSION.................................................................................................................................................43

TABLE OF AUTHORITIES .....................................................................................................................................45

2 Electronic copy available at: http://ssrn.com/abstract=1396269


1.

INTRODUCTION “The harmonization of trade laws and commercial practices is an important ingredient of regional integration, without which meaningful economic integration cannot be achieved.” Muna Ndulo1 “Significant disparities in legal regimes will inevitably lead to an allocation of economic resources at least partially based on the identification of the least restrictive regulatory environment.”2 Frederick Abbott

With the implementation of the North American Free Trade Agreement and the rise of globalization, the countries that make up the continent of North America - Canada, Mexico and the United States - are becoming increasingly interdependent on one another, and as a result, marked integration and harmonization of culture, economies, regulations, and laws can be seen. In light of this continental drift towards increased harmonization and integration, the Center for North American Studies proposed the establishment of a project on “North American Law” in order to: (a) assess the extent to which the legal systems of each of the three countries overlap, compliment, or undermine the other; (b) understand more fully what other regions have done that could provide lessons for what a North American Law might be; (c) develop a framework for understanding the past, current, and future issues related to doing business, regulating, or governing in the three countries; and (d) identify a research project that could lead to a conference at American University by the Spring of 2007 and published works. . In the interest of sketching the parameters of a North American Law that defines the way in which firms do business in North America and possibly becomes a framework for harmonizing other sets of laws – from transactions and corporate law through human resources, human rights, and environmental laws – this review of literature will begin with a discussion of those factors that encourage progress toward that goal as well as those factors that impede progress. Part Two will begin with a definition of the term harmonization as it is to be used in this context. Part Three discusses historical attempts to harmonize legal regimes in the western hemisphere. Following this, the review in Part Four turns to those factors that act as impediments to the development of North American law, including the civil/common law dichotomy present in the member nations legal traditions, and the role federalism plays in shaping those institutions. Next, Part Five will review those factors that encourage progression towards a North American Law, including the relative success of other regional blocs such as the African Economic Community and the European Union, the role the North American Free Trade Agreement plays in the harmonization of laws amongst the three countries, and finally the role of technology and the rise of transnational legal mobility in elevating international legal awareness and transnational communication. Part Six will then consider several areas of potential legal harmonization in North America and any efforts 1

Muna Mdulo, Harmonization of Trade Laws In The African Economic Community, 42 Int’l & Comp. L.Q. 101 (1993) at 107. 2 Frederick M. Abbott, Integration without Institutions: The NAFTA Mutation of the EC Model and The Future Of The GATT Regime, 40 Am. J. of Comp. L. 917 (1992) at 928.

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to achieve such harmonization already in force. Finally literature directly touching on the issue of North American Legal harmonization will be reviewed highlighting any specific North American institutions that are called for in Part Seven. Part Eight will conclude with a centering of the work on North American legal harmonization in the greater context of a movement toward a North American Community, and emphasize the imports of legal harmonization to that end. This work is not intended to be exhaustive, but rather serves to provide a stepping off point for future analysis on moving towards a North American Law. The journey towards a North American Law will be a long one, and it is the intent of the author, and the Center for North American Studies, that this review be seen as that ever important first step. 2.

HARMONIZATION OF LAWS

Before an analysis of existing literature on North American legal harmonization is conducted, it is important to establish what harmonization means in the context of this review. Stephen Zamora uses the term harmonization to connote cooperation and harmonious interaction, as encompassing the “entire range of influences that may come to bear on neighbouring legal systems, either consciously through formal government action, or unconsciously due to the incorporation into one regime of concepts generated by another legal regime.”3 Likewise, Laura Spitz describes harmonization, not in the negative sense of sameness and “a rush to the bottom to further facilitate the globalization of advanced capitalism,”4 but rather the concept of “different laws in different jurisdictions aimed at creating a workable/sensible whole.”5 Patrick Glenn distinguishes between formal harmonization (that which the European Union has undertaken through the establishment of supranational judicial bodies and legislation), and informal harmonization, that which is found in existing structures and processes and facilitates rather than imposes.6 According to Glenn “the harmonization process...is often thought of as an evolutionary process, leading to greater and greater levels of uniformity and correspondingly greater levels of supranational governance. The process of informal harmonization is not, however, an evolutionary process. It does not project further levels of uniformity and elimination of diversity, but rather the reverse, that uniformity is not an objective in itself and that harmony flows from the recognition of diversity and the ability to work within it. Measures of harmonization are thus not imposed but allowed to develop, or at most encouraged. The Americas would thus exist not as an evolutionary process, but as an equilibrium amongst its diverse peoples.”7

3

Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 404. 4 Laura Spitz, The Gift of Enron: An Opportunity To Talk About Capitalism, Equality, Globalization, And the Promise of a North American Charter of Fundamental Rights, 66 Ohio St. L. J. 315 (2005) at 338. 5 Laura Spitz, The Gift of Enron: An Opportunity To Talk About Capitalism, Equality, Globalization, And the Promise of a North American Charter of Fundamental Rights, 66 Ohio St. L. J. 315 (2005) at 338. 6 H. Patrick Glenn, Harmony of Laws in the Americas, 34 U. Miami Inter-Am. L. Rev. 223 (2003) at 232 7 H. Patrick Glenn, Harmony of Laws in the Americas, 34 U. Miami Inter-Am. L. Rev. 223 (2003) at 246.

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Loukas Mistrelis, like Glenn, distinguishes between the types of harmonization but instead refers to it as hard and soft law.8 For Mistrelis, hard law is the international treaties or conventions, or any form of national legislation that harmonizes laws.9 Softlaw, also known as private harmonization, are those laws that do not fall within the hard law category, and include model laws, restatements, legal guides and model rules.10 Finally, talking in terms of unification (which he uses synonymously for harmonization), Andrew Walker talks of the different challenges associated with unifying individual legal standards, versus unifying entire legal systems. Walker argues that “legal standards are much more simply unified than legal systems. The unification of legal standards amounts to little more than the normalization of specifications, such as the infusion of the metric system into U.S. commerce. Legal systems reflect cultural diversity and the value that diversity adds to the economy of a democratic country. It is for this reason that differing legal systems are not so simply normalized.”11 3.

PRIOR HARMONIZATION EFFORTS

In undertaking a consideration of the harmonization of North American Law, a review of prior efforts to harmonize foreign legal systems is necessary. This section will begin with an account of the historical context within which this harmonization effort exists, primarily with a focus on the history of harmonization in the United States, and conclude with an analysis of prior efforts to harmonize legal regimes in the Western Hemisphere generally and North America specifically. Kurt Nadelmann of New York University Law School provides an excellent, overview of harmonization activities involving the United States. The first effort to harmonize American law with a foreign state occurred in 1874 when the government of the Netherlands informed the United States that it had proposed to Austria, Belgium, France, Germany, Great Brittan, and Italy, to send delegates to a conference on Enforcement of Foreign Judgments.12 The US was invited to send a delegate in the interest of creating a uniform codification on the enforcement of judgements from abroad.13 Unfortunately for the Netherlands, the United States, among others, turned down the request, and the conference never took place.14 Within the next few years, 8

Loukas A. Mistelis, Regulatory Aspects: Globalization, Harmonization, Legal Transplants, and Law Reform – Some Fundamental Observations, 34 Int’l Law. 1055 (2000), at 1061. 9 Loukas A. Mistelis, Regulatory Aspects: Globalization, Harmonization, Legal Transplants, and Law Reform – Some Fundamental Observations, 34 Int’l Law. 1055 (2000), at 1061 10 Loukas A. Mistelis, Regulatory Aspects: Globalization, Harmonization, Legal Transplants, and Law Reform – Some Fundamental Observations, 34 Int’l Law. 1055 (2000), at 1061 11 Andrew J. Walker, Conflict of Laws Analysis for the Era of Free Trade, 20 Am. U. Int’l L. Rev. 1147 (2005) at n.16. 12 Kurt H. Nadelmann, Ignored State Interests: The Federal Government and International Efforts to Unify Rules of Private Law, 102 U. Pa. L. Rev. 323 (1954) at 323. 13 Kurt H. Nadelmann, Ignored State Interests: The Federal Government and International Efforts to Unify Rules of Private Law, 102 U. Pa. L. Rev. 323 (1954) at 323-24. 14 Kurt H. Nadelmann, Ignored State Interests: The Federal Government and International Efforts to Unify Rules of Private Law, 102 U. Pa. L. Rev. 323 (1954) at 324.

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the US was asked twice to attend discussions on the unification of law, once by Peru (to which the US Secretary of State Hamilton Fish rested his objection on concerns of federalism and the incongruence of the common law and civil law traditions) and once by the Italians.15 On both occasions the US rejected the invitations. In 1888, the US congress passed an act authorizing the President “to call an International American Conference for the purpose of discussing and recommending for adoption to the respective governments some plan for the settlement of disagreements and for considering questions relating to the improvement of business intercourse and means of direct communication between the participating countries.”16 There would later be a great exchange between the unofficial US and Argentine representatives of the standing committee on international trade at the conference, during which the US representative argued Congress did not have the authority to mandate to the states the adoption of a codified set of rules (again the federalist question was used defensively) to which the Argentine representative retorted that “if the states can not make treaties, and if the Federal power can not, then the United States would be inferior in constitutional capacity with respect to treaties, to all the countries of the world.”17 Despite the discord, the governments unanimously agreed to study the resulting Montevideo Treaties. Following this initial conference, two more conferences were held, the first resulting in a failure to ratify, and the second adopting a convention for the establishment of an International Commission of Jurists to draft a Code of Private International Law, and a convention on Public International Law.18 Sadly this work was interrupted by the outbreak of the World War I. Following World War I, the American Institute of International Law (“AIIL”) commenced the American International Law Project. The AIIL, an adjunct of the Carnegie Endowment for International Peace, spearheaded an effort to codify an “American International Law” in the 1920s.19 The Institute appointed a committee for the purpose of creating draft rules of international private law, and the committee met in Rio de Janeiro in 1927, the first time the United States was officially represented at a conference on Private International Law.20 Following this initial meeting, and the later adoption of the Bustamante Code,21 the Seventh International Conference of American 15

Kurt H. Nadelmann, Ignored State Interests: The Federal Government and International Efforts to Unify Rules of Private Law, 102 U. Pa. L. Rev. 323 (1954) at 325. 16 Kurt H. Nadelmann, Ignored State Interests: The Federal Government and International Efforts to Unify Rules of Private Law, 102 U. Pa. L. Rev. 323 (1954) at 329. 17 Kurt H. Nadelmann, Ignored State Interests: The Federal Government and International Efforts to Unify Rules of Private Law, 102 U. Pa. L. Rev. 323 (1954) at 330. 18 Kurt H. Nadelmann, Ignored State Interests: The Federal Government and International Efforts to Unify Rules of Private Law, 102 U. Pa. L. Rev. 323 (1954) at 331-32. 19 Jose A. Cabranes, The Inter-American System: Its Development and Strengthening, Oceana Publications, BOOK REVIEW, 16 Int’l & Comp. L. Qt. 563 (1967). 20 Kurt H. Nadelmann, Ignored State Interests: The Federal Government and International Efforts to Unify Rules of Private Law, 102 U. Pa. L. Rev. 323 (1954) at 335. See Also James Brown Scott, The Gradual and Progressive Codification of International Law, 21 Am. J. of Int’l L. 417 (1927) (detailing the evolution of private international law in the Americas). 21 See Enrique Lagos, The Coexistence of Legal Systems in the Americas from and OAS Perspective, Paper presented at the University of Ottawa, October 20, 2000, during a panel on “Evolution des Systemes Juridiques et

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States declared in 1933 that the Pan American Union should “draft projects for the simplification and uniformity of powers of attorney, and the juridical personality of foreign companies, if such uniformity was possible.”22 Once again, efforts at legal harmonization were interrupted by world war, and following founder of the AIIL’s death (Dr. James Brown Scott) in 1943, the AIIL collapsed and the Endowment showed little interest in continuing the AIIL’s work on developing a regional American Law. In the early 1960s an effort to revitalize the AIIL gathered steam, and a group of experts gathered in Costa Rica to determine the future of the Institute. At the conclusion of the meeting the decision was made not to restore the AIIL, but to create a new institution that would work to further the integration of the legal systems of the western hemisphere primarily through the promotion of international law in education. The InterAmerican Institute for International Legal Studies (IAIILS) was subsequently formed in 1963 and promised to play an important role in promoting the cause of regionalism among students of world public order. At the formation of the Institute, “emphasis was put on the problem of teaching, upon the study and research of scholars free from government direction and influence, whose work would in time influence governments and make possible more effective work on the part of official codification agencies.”23 Very little can be found on the efforts of the IAIILS after the mid-1960’s, the role they played in the encouragement of the study of international law and any residual effect this had on the harmonization of laws in the western hemisphere. The North American Law Project would benefit from addition investigation into the IAIILS. Stephen Zamora adds to the discussion of the historical efforts to harmonize law in the western hemisphere by looking directly at the three members of the North American community. He attributes the relative lack of harmonization of laws amongst the North American neighbours to the influence of economic, political and cultural factors.24 According to Zamora, for Mexico, harmonization was avoided, as “Mexico’s penchant for adopting authoritarian/centrist legal models dominated Mexican professional and government elites until the mid-1980’s” and protection was sought from the harmful effects of US influence.25 For the US, the “lack of harmonizing influences from abroad stemmed from a deeply held belief that the US way of doing things is generally best, Mondialisation.” (“Antonio S. de Bustamante was a well-respected Cuban jurist who prepared a code of private international law for the Americas. He did so through the mechanisms of the Congress of Jurists and the Sixth International Conference of American States in Havana in 1928. The Congress was composed of two delegates from each state in the Hemisphere, and can be considered a forerunner or predecessor of the present Inter-American Juridical Committee. In 1928, the international conference adopted the Bustamante Code. It was considered one of the most ambitious instruments in the area of private international law but despite years being devoted to developing this Code, many countries, including the United States, never signed the applicable treaty. Bustamante’s Code therefore is considered a failure for its inability to harmonize the laws of the different countries and, in particular, of the two principal legal systems in the Western Hemisphere”). 22 Kurt H. Nadelmann, Ignored State Interests: The Federal Government and International Efforts to Unify Rules of Private Law, 102 U. Pa. L. Rev. 323 (1954) at 335. 23 C.G. Fenwick, The Inter-American Institute For International Legal Studies, 58 Am. J. Int’l L. 122 (1964) at 125. 24 Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 406. 25 Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 406.

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and that [they] owe [their] economic and military superiority to the fact that [they] invent models, rather than import other societies’ models.”26 Finally Canada’s traditional reliance on Great Britain and France for legal models has limited the impact any harmonization attempts may have had on the Canadian legal system.27

4.

IMPEDIMENTS TO CREATING A NORTH AMERICAN LAW Laws are best reconciled by the realization that it is people who conflict, and not simple, inert texts. H. Patrick Glenn28

With an understanding of the historical underpinnings of harmonization efforts in the western hemisphere, this review now turns to the present efforts of the Center for North American Studies, and those factors that potentially act as impediments to the development of North American Law. The two primary factors that impede legal harmonization stem from the distinct legal traditions of the three countries and include the challenges the common and civil law legal system dichotomy presents, and the influence issues of federalism have on the legal and political environments in each of the three countries. 4.1

CIVIL AND COMMON LAW TRADITIONS

Reconciling formally different laws may first involve a deliberate process of ‘overlooking’ inconsistencies between national, state or provincial laws.29 H. Patrick Glenn Canada and the United States share similar common law traditions, while Mexico’s legal system is primarily based on a civil law tradition.30 There is a surfeit of literature on the respective legal traditions of each of the three nations, and any future effort to discuss the harmonization of North American Law will benefit from the inclusion of a short history of the evolution of each of the traditions. Turning directly to the impediment that the diversity of legal traditions in North American represent to North American Legal harmonization, however, several authors highlight the issues that the dichotomy presents. Stephen Zamora (1993) argues that the adversarial litigation system of the United States and Canada does not fit well with the “characteristics of cooperation and 26

Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 406. 27 Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 407. 28 H. Patrick Glenn, Harmony of Laws in the Americas, 34 U. Miami Inter-Am. L. Rev. 223 (2003) at 237. 29 H. Patrick Glenn, Harmony of Laws in the Americas, 34 U. Miami Inter-Am. L. Rev. 223 (2003) at 237 (citing B. Kozolchyk, Commercial Legal Relations Between Arizona and Northern Mexico, 5 Ariz. J. Int’l. & Comp. L. 28, 29 (1988). S See A. Kocourek, Sources of Law in the United States of North America and Their Relation To Each Other, 18 A.B.A. J. 676 (1932) (providing a historical overview of the history of US law from colonialism to the 1930s).

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authoritarianism that mark Mexican society.”31 According to Zamora, compared to the United States, Mexico is not a litigious society. “Litigation between parties is particularly infrequent. Public enforcement of regulatory laws tends to be carried out through administrative procedures, rather than by recourse to litigation. Administrative procedures allow more room for compromise than litigation.”32 Zamora also highlights the social differences between the United States and Mexico, and how they must be accounted for when attempting any legal integration or harmonization of Mexico.33 Thus, any effort to create a North American Law, or harmonize the existing laws of the member nations, must account for the litigation-adverse Mexican system. Stephen Zamora (1997) also highlights the use of these doctrinal differences that still exist between Latin American countries and the United States, to resist the importation of US legal norms. “The Latin American republics have used doctrinal theories to oppose the incursion of US legal models; because most of the other countries of the region follow the civil law tradition, it was easy for each country to oppose the replication of US legal models by asserting that they were not bound to a common law foundation and such legal models would not operate effectively in the world of neo-romanist or civil law.”34 Zamora then tackles the question of “whether the international trade regime should be used to further the harmonization of domestic laws covering nontrade subjects.” For him, “the issue is the extent to which importing countries should be allowed to use market access to promote domestic law reform in other countries.”35 Zamora also discusses the effect assured access to US markets from NAFTA, played in providing the incentive for Mexico to reform its legal system. Despite the challenges facing the harmonization of common and civil law traditions illustrated by Zamora, however, the Organization of American States (OAS), acknowledges the benefits of harmonization, and actively pursues such harmonization in the interest of encouraging cooperation among is member states. According to Enrique Lagos, “several entities at the OAS promote and facilitate the coexistence of the common law and civil law systems in the Americas. For example, there is the work of the Inter-American Juridical Committee and the activities of the OAS Secretariat for Legal Affairs. The IAJC, a legal body specifically provided for in the Charter, is an advisory body on juridical affairs. One of the purposes of the IAJC, as noted in Article 99 of the OAS Charter is: to promote the progressive development and the codification of international law[;] and to study juridical problems related to the integration of the

31

Stephen Zamora, The Americanization of Mexican Law: Non-Trade Issues In the North American Free Trade Agreement, 24 Law & Pol’y Int’l Bus. 391 (1993) at 446. 32 Stephen Zamora, The Americanization of Mexican Law: Non-Trade Issues In the North American Free Trade Agreement, 24 Law & Pol’y Int’l Bus. 391 (1993) at 446. 33 Stephen Zamora, The Americanization of Mexican Law: Non-Trade Issues In the North American Free Trade Agreement, 24 Law & Pol’y Int’l Bus. 391 (1993) at 456 34 Stephen Zamora, Allocating Legislative Competence in The Americas: The Early Experience Under NAFTA And The Challenge Of Hemispheric Integration, 19 Hous. J. Intl’l L 617 (1997) at 620-21. 35 Stephen Zamora, The Americanization of Mexican Law: Non-Trade Issues In the North American Free Trade Agreement, 24 Law & Pol’y Int’l Bus. 391 (1993) at 404.

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developing countries of the Hemisphere and, insofar as may appear desirable, the possibility of attaining uniformity in their legislation.”36 In addition, the OAS Secretariat often undertakes comparative law studies of the Member States, aiming its activities at unifying and harmonizing each Member State’s legislation in the areas of public and private international law, including the legal aspects of regional economic integration. Further, the Secretary General of the OAS, Cesar Gaviria, recently reorganized the Secretariat for Legal Affairs to concentrate the lawyers’ efforts on the development of public and private international law and on strengthening juridical cooperation with Member States. Beyond conscious efforts to harmonize civil and common law traditions, Jorge A. Vargas argues that harmonization has already begun to occur between Mexico and the United States, as evidenced by the “Americanization of Mexican Law” that resulted from NAFTA. Vargas also posits the reverse is true, that there is an increased influence of Mexican law on American law is noticeable, resulting from the massive migration of Mexicans in the US and the increased cross border trade and investment that has occurred.37 According to Vargas, “the more economically affluent Mexican-Americans become due to their better education and training, the more investment and business transactions are likely to take place between the United States and Mexico, thus involving Mexican law.” 38 Vargas also provides an excellent overview of the history of Mexican law. Further, he argues that “the cascade of legislative changes that the Salinas administration imposed on Mexico at such a rapid pace may have been motivated by the strong desire of transforming Mexico’s legal system to put it more in symmetry with NAFTA. In other words, Mexico’s legal system was Americanized so that NAFTA and its implementation would be gently eased into place in Mexico through the adoption of those legal changes.”39 Finally, Casey Burgess minimizes the impediment that the common and civil law dichotomy might pose to North American legal harmonization by highlighting the successful relationship between common law and civil law jurisdictions in Canada and the United States. 40 Specifically, Burgess identifies the ability of Louisiana and Quebec to maintain their civil law traditions while existing in a common law nation. It is this ability for common and civil law traditions to coexist that suggests that while the civil law/common law dichotomy will invariably add a layer of challenge to the progression

36

Enrique Lagos, The Coexistence of Legal Systems in the Americas from and OAS Perspective, Paper presented at the University of Ottawa, October 20, 2000, during a panel on “Evolution des Systemes Juridiques et Mondialisation.” 37 Jorge A. Vargas, An introductory Lesson To Mexican Law: From Constitutions And Codes to Legal Culture and NAFTA, 41 San Diego L. Rev. 1337 (2004)at 1366 38 Jorge A. Vargas, An introductory Lesson To Mexican Law: From Constitutions And Codes to Legal Culture and NAFTA, 41 San Diego L. Rev. 1337 (2004) at 1370-71 39 Jorge A. Vargas, An introductory Lesson To Mexican Law: From Constitutions And Codes to Legal Culture and NAFTA, 41 San Diego L. Rev. 1337 (2004) at 1367 40 Casey Burgess, Comment, An Anglo-NAFTA Union: Does it Make Sense?, 8-FALL L. & Bus. Rev. Am. 685 (2002) at 698.

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towards a North American Law, the dichotomy in itself should not present an unassailable barrier. 4.2

FEDERALISM

Blacks Law dictionary defines federalism as “the legal relationship and distribution of power between the national and regional governments within a federal system of government.”41 According to H. Patrick Glenn, North America has 99 private law jurisdictions. “There are 32 in Mexico, counting the Federal District; 51 in the U.S.A., counting both Hawaii and Puerto Rico; and 13 in Canada, counting the three northern Territories.” 3. To these 96, he then adds the 3 Federal Jurisdictions, “each of which has a private law dimension of varying importance.” 3-4. The relative power of the 90+ sub-federal jurisdictions varies with the country, with Canada arguably having the greatest degree of federalism, followed by the United States, with Mexico being the most centralized of the three countries. In the United States, the Supreme Court found the signing of international treaties to be federal jurisdiction in the case of Missouri v Holland. In Holland, the Court found a treaty between Britain and the United States regulating the killing and sale of migratory birds, was a proper exercise of the treaty power delegated to the US government by U.S.C.A. Const. art. 2, §2. For a discussion of the jurisdiction of the United States federal government to negotiate and implement international agreements see John Kennel’s piece in Corpus Juris Secundum.42 Likewise, in Canada and Mexico, the signing of international treaties is the jurisdiction of the federal government, despite active involvement by provincial ministers in Canada. The issues of federalism as they relate to the creation of a North American law are varied and the opposing sides well entrenched. No two states or provinces share identical interests, nor do they follow identical legal histories as the states and provinces, primarily in Canada and the United States, developed their own individual legal traditions within their respective federation or republic. Thus any attempt to develop a common legal system amongst them will battle inconsistencies and varying interpretations, not to mention a power struggle between state and federal government that is front page news in both Canada and the United States. One concern with creating a North American Law is the role the state and local judges would play in the adjudication process and any discrimination that might occur as a result. H. Patrick Glenn, however, dismisses this concern through his analysis of active and open role of the federal judiciary in each of the three countries.43 The U,S, federal judiciary is more often than not happy to give a foreign defendant diversity jurisdiction under FRCP 1332. Likewise, in Mexico “access to federal judges is secured through the Mexican procedure of amparo, in its casacion form, which ensures review on the

41

Black's Law Dictionary (8th ed. 2004), federalism John R. Kennel, International Law as Part of United States Law, 48 C.J.S. International Law §2-3 (2005). 43 H. Patrick Glenn, North America as a Medieval Legal Construction, 2 Global Jurist Adv., (2002) 12 42

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merits of all Mexican state court judgments.”44 Finally, in Canada, “Superior Court judges are all federally appointed so there is no need to ‘make a federal case of it’ to avoid a local judiciary.”45 Glenn thus argues that the existing federal structures in North America “provide important guarantees of judicial impartiality in cross-border litigation.”46 Glenn also points to the existence of a federal Bill or Charter of Rights in each of the three countries. He argues that, in light of these protections, “discrimination on the basis of national origin or nationality is thus constitutionally suspect in all three countries and has been in used in all three countries, for example, to refuse effect to legislation requiring local citizenship as a requirement of the legal profession.”47 For Glenn, the fact that guarantees of impartiality already exist, and federal charters prevent discrimination on the basis of national origin, suggest that federalism may not be a significant impediment to the development of North American Law. Further Michael Traynor (2001) former president of the AALS, raised the concern that the 50 states in the United States might interpret a foreign judgment differently under the Uniform Foreign Money-Judgments Recognition Act. “Although the Uniform Act has worked reasonably well, there is now a serious question whether it makes sense in a global economy for foreign country judgments to be subject to potential varying interpretations in 50 different states or for the United States not to have a unified position in its negotiations in the Haugue based on a substantial federal interest.”48 There is also a concern that tribunals formed to solve challenges brought under the NAFTA dispute resolution mechanism or any subsequent mechanism that may be created following the harmonisation of North American Law, would act like appellate courts, reviewing the decisions of domestic courts for proper application of domestic law. Pieter H.F. Bekker, however, argues that prior NAFTA panel decisions, such as those in the Mondev and Lowen cases, were properly decided solely on the grounds of NAFTA law, and were not encroachments on the jurisdiction of the domestic courts.49 “The claims underlying these decisions were claims under international law for violations of NAFTA. As long as NAFTA tribunals continue to adhere to a strict interpretation of the local remedies/judicial finality and diversity of nationality requirements along the lines of international law, there should be no jurisdictional conflicts.”50

44

H. Patrick Glenn, North America as a Medieval Legal Construction, 2 Global Jurist Adv., (2002) 12 H. Patrick Glenn, North America as a Medieval Legal Construction, 2 Global Jurist Adv., (2002) 12 46 H. Patrick Glenn, North America as a Medieval Legal Construction, 2 Global Jurist Adv., (2002) 12 47 H. Patrick Glenn, North America as a Medieval Legal Construction, 2 Global Jurist Adv., (2002) 12-13 48 Michael Traynor, Conflict of Laws, Comparative Law, and the American Law Institute, 49 Amer J. of Comp. Law 391 (2001) at 400. 49 Pierter H.F. Bekker, The Use of Non-Domestic Courts For Obtaining Domestic Relief: Jurisdictional Conflicts Between NAFTA Tribunals And U.S. Courts? 11 ILSA J. Int’l & Comp. L 331 (2005) at 341 50 Pierter H.F. Bekker, The Use of Non-Domestic Courts For Obtaining Domestic Relief: Jurisdictional Conflicts Between NAFTA Tribunals And U.S. Courts? 11 ILSA J. Int’l & Comp. L 331 (2005) at 341. 45

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Daniel Keleman approaches the topic of federalism from a different perspective the concern that centralized decision making, such as that which may result from increased legal harmonization, will cause downward pressure on the states to lower their standards. Keleman considers the impact of this harmonization on social regurgitation in federal politics and concludes that though international legal integration does in fact encourage the centralization of regulatory power within federal politics, the impact is modest, and does not uniformly act to raise or lower local jurisdiction standards. “While supranational dispute resolution bodies have attached sub-national social regulations in some cases, this downward pressure has been counterbalanced by international and regional commitments to increase regulatory standards.”51 Keleman’s makes the point, illustrated by the Lowen Chapter 11 case under NAFTA, that “as federal governments are accountable for violations of international trade or environmental agreements committed by sub-national jurisdictions, they have an incentive to restrict the autonomy of these jurisdictions.”52 Such restriction of autonomy will most definitely raise concerns in Canada, and likely in the U.S. as well, and will certainly present an impediment to the harmonization of laws in North America.

5.

ENCOURAGEMENTS OF A NORTH AMERICAN LAW

Countering the impediments to the creation of a North American Law mentioned above, there are several factors that encourage progression towards a North American Law. These encouragements fall into three general categories: 1) examples of other successful regional harmonization efforts; 2) contextual developments that encourage North American integration; and finally 3) the North American Free Trade Agreement. 5.1

AFRICAN LEGAL HARMONIZATION

There are several instances of African legal harmonization that demonstrate the potential for success for those considering a similar task in North America. It is suggested that the value of such a comparison between Africa and North America, is diminished due to their vastly different economic positions and therefore only two of the more successful, and recent efforts, will be discussed. Muna Ndulo (1993) presents a general over view of the harmonization of trade laws in the African Economic Community (AEC) in the early 1990s. Ndulo points our that in North America there are only civil and common law traditions. The members of the African Economic Community represent at least four legal systems: common law, Roman-Dutch law, Islamic law, and civil law.53 Under the African Economic Community, 51

R. Daneil Kelemen, Globalization, Federalism and Regulation, UCIAS Edited Volume 1, Dynamics of Regulatory Change: How Globalization Affects National Regulatory Policies, Article 8 (2002) http://repositories.cdlib.org/uciaspubs/editedvolumes/1/8. 52 R. Daneil Kelemen, Globalization, Federalism and Regulation, UCIAS Edited Volume 1, Dynamics of Regulatory Change: How Globalization Affects National Regulatory Policies, Article 8 (2002) http://repositories.cdlib.org/uciaspubs/editedvolumes/1/8 at 17. 53 Muna Ndulo, Harmonization of Trade Laws In The African Economic Community, 42 Int’l & Comp. L.Q. 101 (1993) at 102.

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“member states undertake to create favourable conditions for the development of the Community and the attainment of its objectives, particularly in harmonizing their strategies and policies. They are to refrain from any unilateral actions that may hinder the attainment of the objectives of the community.”54 The AEC efforts at legal harmonization thus provide a good example of successful harmonization of legal systems with very diverse populations and equally diverse legal traditions. More Recently, sixteen sub-Saharan African states joined the Organization for Harmonization in Africa of Business Laws (OHADA), to promote regional integration and economic growth, and to ensure a secure legal environment through the harmonization of business law.55 The treaty includes several acts focusing on debt recovery and enforcement law, bankruptcy law, arbitration law, accounting law, and law regulating contracts for the carriage of goods by road. To facilitate the harmonization of these laws, the OHADA created four institutions, the Council of Ministers of Justice and Finance, the Common Court of Justice and Arbitration, the Permanent Secretariat, and the Regional Training School of the Judiciary. Legislative innovations of the OHADA include: 1) memorandum and articles of association as well as their subsequent modifications must take the form of a certified deed; 2) equity must be fully paid up after a three year period; 3) auditors are assigned a duty of both advice and control; 4) methods for administrating corporations are identified; and 5) a publicly limited company or a limited liability company can have a single shareholder.56 5.2

EUROPEAN UNION

The North American Community has much to learn from the European Union – about both what it should adapt and what is should avoid.57 Robert Pastor The European Union experience allows us to better understand the problems and possibilities of legal harmonization in North America. “The European model of legal integration, though inappropriate in North America, is relevant... as Western Europe’s transfer from balkanization to interdependent prosperity, and Eastern Europe’s transfer into a freer and more prosperous region, share many of the same challenges and dividends with the NAFTA trading partners in their development as a trade block.”58 According to Andrew Walker, the reason the EU model of integration is not appropriate in North America is because it would “require the forfeiture of centuries of dispute resolution, scholarship, and domestic integration of competing legal institutions within 54

Muna Ndulo, Harmonization of Trade Laws In The African Economic Community, 42 Int’l & Comp. L.Q. 101 (1993) at 112. 55 African Association for a Unified System of Business Laws, OHAD: The Harmonization of Business Laws in Africa, 2005, www.ohada.com, visited 6/26/2006. 56 African Association for a Unified System of Business Laws, OHAD: The Harmonization of Business Laws in Africa, 2005, www.ohada.com, visited 6/26/2006. 57 Robert A. Pastor, Toward a North American Community, Institute for International Economics, (Washington: 2001) at 190. 58 Andrew J. Walker, Conflict of Laws Analysis for the Era of Free Trade, 20 Am. U. Int’l L. Rev. 1147 (2005) at 1152-53.

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each country. It would also present a break with cultural expectations at the bases of each system, and a major disruption in the governance of complicated trade networks within each country that are much larger than the trade that exists within individual European countries.”59 According to John Fitzpatrick, the objective of a comparison between the European Union and the NAFTA area is “to determine which substantive and institutional elements of a regional regime are necessary for achieving limited economic integration in North America.”60 Fitzpatrick’s analysis provides excellent comparison between the North American and European regions, including the political, legal, and cultural variables that distinguish them. H. Patrick Glenn suggests that in Europe, “an underlying concept of global disunity of laws [sic] gave rise to a generalized presumption of conflict, necessitating a complex, expensive, and time consuming processes of allocation of cases amongst states,”61 while in North America “the phenomena of American legal diversity and legal dialogue yield a general conclusion that the laws of the Americas are subject to a presumption of harmony rather than a presumption of conflict.”62 It is this presumption of harmony of laws in the Americas that Glenn relies on to argue that there is little need for a formal measure of harmonization such as the institutions operating in Europe because the conflict between the laws is greatly reduced.63 According to Glenn there is greater jurisdictional diversity in the Americas in private law, significant linguistic commonality, and a greater integration of civil law and common law traditions that make North American legal harmonization more attainable than even in Europe.64 While there are a multitude of additional comparisons that could be made between the EU and North America, that analysis is beyond the scope of this review. Trade and investment are two of the areas in which legal harmonization may most likely occur in the near future, and therefore are the focus of this review.65 Other scholarship is encouraged to consider the many other areas in the future. The European Commission acting as the EU’s policy and executive engine, is composed of 25 Commissioners, one from each Member State and is supported by a 59

Andrew J. Walker, Conflict of Laws Analysis for the Era of Free Trade, 20 Am. U. Int’l L. Rev. 1147 (2005) at n13. Walker is referencing Noemi Gal-Or, Private Party Direct Access: A Comparison of the NAFTA and the EU Disciplines, 21 B.C. Int’l & Comp. L. Rev. 2, 5-8 (1998) (characterizing NAFTA as being “many steps behind the EU example” because it does not allow private parties direct access to supranational authorities). 60 John P. Fitzpatrick, The Future of the North American Free Trade Agreement: A Comparative Analysis of the Role of Regional Economic Institutions And the Harmonization Of Law In North America and Western Europe, 19 Hous. J. Int’l L. 1 (1996) at 8. 61 H. Patrick Glenn, Harmony of Laws in the Americas, 34 U. Miami Inter-Am. L. Rev. 223 (2003) at 225-26. 62 H. Patrick Glenn, Harmony of Laws in the Americas, 34 U. Miami Inter-Am. L. Rev. 223 (2003) at 232. 63 H. Patrick Glenn, Harmony of Laws in the Americas, 34 U. Miami Inter-Am. L. Rev. 223 (2003) at 232. A deeper discussion of the institutions required to accomplish North American legal harmonization can be found in part 7 of this review. 64 H. Patrick Glenn, Harmony of Laws in the Americas, 34 U. Miami Inter-Am. L. Rev. 223 (2003) at 229. 65 See Robert A. Pastor, Toward a North American Community, Institute for International Economics, (Washington: 2001) at 23 (detailing the evolution of the European Community and subsequent European Union).

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substantial staff located primarily in Brussels, Belgium.66 In matters relating to economic integration such as trade and investment, only the Commission has the right to propose legislation for approval by the EU Council and European Parliament. As "Guardian of the Treaties," the Commission ensures that EU laws are applied and upheld throughout the EU, prosecuting Member States and other institutions for failing to follow treaty precepts or otherwise apply Community law.67 The Commission has full authority to enforce Community competition policy, and its policing of implementation of Community legislation preserves the integrity of the EU single market. The Commission likewise manages and develops the Common Agriculture Policy (CAP), implements the budget, and represents the European Community in its areas of competence, notably including international trade negotiations.68 In addition to the European Commission, the European Court of Justice (ECJ) ensures uniform interpretation and application of both the Treaties establishing the European Communities and the secondary legislation and other law adopted under their authority.69 To enable it to carry out that task, the Court has wide jurisdiction to hear various types of cases. For example, the Court has the authority to hear and issue binding judgments in lawsuits that seek to annul a law adopted by the EU, to compel an EU institution to act, or to require that a Member State comply with EU law.70 The ECJ may issue clarifications of EU law (in response to a request for a preliminary ruling from any Member State court) and hears appeals on legal questions arising out of cases at the Court of First Instance.71 The ECJ currently has 25 justices and eight advocatesgeneral, who are appointed by common accord of the governments of the Member States and who hold office for six-year renewable terms. For a discussion of the role of the European Court of Justice in the harmonization of European laws, see Yvonne Gierczyk’s article.72 The European Union, like North America, has to deal with federal or subsidiarity concerns, and Burley and Mattli highlight the success of the ECJ in acting as a supranational body while not “stepping on the toes” of the domestic courts. “The ECJ only “interprets” the relevant provision of community laws, and leaves it for the national court to apply it to the facts of the case. In practise, of course, the ECJ frequently offers a virtual template for the subsequent lower court decision. But, the all-important fiction

66

United States Department of State, European Union Profile, Fact Sheet: Bureau of European and Eurasian Affairs, Washington, DC, May 25, 2006 http://www.state.gov/p/eur/rls/fs/54126.htm visited 7/1/2006. 67 United States Department of State, European Union Profile, Fact Sheet: Bureau of European and Eurasian Affairs, Washington, DC, May 25, 2006 http://www.state.gov/p/eur/rls/fs/54126.htm visited 7/1/2006. 68 United States Department of State, European Union Profile, Fact Sheet: Bureau of European and Eurasian Affairs, Washington, DC, May 25, 2006 http://www.state.gov/p/eur/rls/fs/54126.htm visited 7/1/2006. 69 United States Department of State, European Union Profile, Fact Sheet: Bureau of European and Eurasian Affairs, Washington, DC, May 25, 2006 http://www.state.gov/p/eur/rls/fs/54126.htm visited 7/1/2006. 70 United States Department of State, European Union Profile, Fact Sheet: Bureau of European and Eurasian Affairs, Washington, DC, May 25, 2006 http://www.state.gov/p/eur/rls/fs/54126.htm visited 7/1/2006. 71 United States Department of State, European Union Profile, Fact Sheet: Bureau of European and Eurasian Affairs, Washington, DC, May 25, 2006 http://www.state.gov/p/eur/rls/fs/54126.htm visited 7/1/2006. 72 Yvonne N. Gierczyk, The Evolution of the European Legal System: The European Court of Justice’s Role In the Harmonization of Laws, 12 ILSA J. Int’l & Comp. L. 153 (2005).

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is preserved.”73 Burley and Mattli’s article also provides an excellent assessment of the ECJ, as of 1993, and the economic and political challenges it faced when it was created.74 Geoffrey Garrett counters Burley and Mattli’s article by arguing “the trajectory of legal integration in Europe can be explained in rational choice terms, without recourse to Burley and Mattli’s critical assumptions about the ignorance of governments and the innate power of the law.”75 Garrett et al, however, suggest that the ECJ is not immune from political controversy or influence, when they discuss the role of the ECJ. They specify the conditions under which the ECJ makes decisions that declare illegal national laws, regulations or practices, and express how member governments act to those decisions.76 They also look at the ECJ case law as representative of their thesis that the political decisions surrounding a case, the size of the country, the economic involved, the political power of the country, all play a role in how aggressive the ECJ ruling turns out to be.77 The above consideration of the EU and its institutions that deal with trade and investment is just the beginning of deeper investigation that is needed for a thorough comparison. North Americans are privileged as the evolution of the EU is well documented, and the lessons to be learned are easily attained. Further study of North American legal harmonization, especially in the field of trade and investment, deserves an extensive review of the EU, its history, its institutions, and prior case law, so as to learn as much as possible from the successful example. 5.4

TRANSNATIONAL LEGAL MOBILITY

Several authors, including H. Patrick Glenn discuss the impact of fluid transnational mobility of legal professionals on the harmonization of laws of North America.78 Specifically Glenn discusses the number of large firms actively recruiting lawyers trained in the law of all three countries, and the rapid expansion of firms across the continent.79 He also adds the role that the legal professions will play in the integration of North American Law. “Thinking in terms of the conciliation of law is necessary, first of all, on the part of legal practitioners. It is the ‘practicing lawyers who are making the running,’ in terms of overcoming jurisprudential and doctrinal obstacles to their client’s 73

Anne-Marie Burley and Walter Mattli, Europe Before the Court: A Political Theory of Regional Integration, 47 Int’l Org. 41 (1993) at 65. 74 Anne-Marie Burley and Walter Mattli, Europe Before the Court: A Political Theory of Regional Integration, 47 Int’l Org. 41 (1993). 75 Geoffrey Garrett, The Politics of Legal Integration In the European Union, 49 Int’l Org. 171, (1995) at 181. 76 Geoffrey Garrett et al., The European Court of Justice, National Governments, and Legal Integration in the European Union, 52 Int’l Org. 149 (1998) at 150. 77 Geoffrey Garrett et al., The European Court of Justice, National Governments, and Legal Integration in the European Union, 52 Int’l Org. 149 (1998). 78 CF. David M. Trubek et al., Global Restructuring and the Law: Studies of the Internationalization of Legal Fields and the Creation of Transnational Arenas, 44 Case W. Res. L. Rev. 407 (1994) at 410 (arguing the legal profession is a valuable indicator of the impact of economic integration and global forces: “Forces and logics that can be observed in the economy, the state, and the international order are at work within the legal field as well, so that the logic of the legal field constitutes a ‘homologous microcosm’ of larger social phenomena”). 79 See Glenn 2001 for a discussion of the large firms and how they hire lawyers from the other two countries in NA.

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transnational case, in seeking means of reconciliation of different laws.”80 Finally, Glenn argues that the rise and acceptability of the large, multinational law firm, though not leading to the continent-wide mobility of lawyers in North America, as is the case in Europe, has led to “intense cross-border practice,” which has played an “important role in the process of informal harmonization.”81 Wolfe and Strahan also call for increased harmonization of the legal profession citing the benefits of the efficient practice, and flow, of transnational litigation.82 Ronner and O’Connor highlight the need for the increased harmonization that Wolfe and Stahan call for, in their article describing the challenges a Canadian Lawyer faces to practice law in the United States, despite the most favoured nation status that is to be awarded under NAFTA. 83 R. Buxbaum and K. Hopt wrote “a common profession, with a common professional language, may well itself be a surrogate for a common substantive set of rules.”84 Finally, for a detailed discussion of the role “law experts” and legal institutions play in the harmonization of laws in North America see Arthurs and Kreklewich.85 They examine the changes in the production of law, legal institutions, and the legal profession in Canada following the signing of NAFTA, and conclude that the resulting transformation of legal production has reshaped the role of law experts, and aggravated existing tendencies of stratification, concentration, diversification, and marginalization within the legal profession itself. 86 5.5

TECHNOLOGY

With constant developments in communications technology, Canadians, Americans and Mexicans are growing closer to one another as they more easily and more frequently experience each other’s culture. This transnational exchange of culture, facilitated by rapid developments in technology, aligns the interests of the citizens of the three countries and makes a harmonization of legal standards more feasible, and more likely. Laura Spitz argues that “recent technological changes have rapidly provided for enhanced communication possibilities without regard for national borders.”87 “It is no

80

H. Patrick Glenn, Harmony of Laws in the Americas, 34 U. Miami Inter-Am. L. Rev. 223 (2003) at 237-238 (citing R. Goode, International Restatements and National Law, in The Search for Principle [:] Essays in Honour of Lord Goff of Chievely, (W. Swadling & G. Jones ed., Oxford 1999) at 57). 81 H. Patrick Glenn, North America as a Medieval Legal Construction, 2 Global Jurist Adv., (2002) at 8. 82 Chris Wolfe and April A. Strahan, An Overview of the History of Foreign Legal Consultants Between The United States and Mexico, 47 S. Tex. L. Rev. 557 (2006). 83 Amy D. Ronner and Dennis J. O’Connor, Good Fences Make Bad Neighbors: Is the North American Free Trade Agreement A Lie For Lawyers?, 32 U. Miami Inter-Am. L. Rev. 437 (2001). 84 R. Buxbaum & K. Hopt, Legal Harmonization And The Business Enterprise (Walter de Gruyter ed., 1988) at 271. 85 Harry W. Arthurs and Robert Kreklewich, Law, Legal Institutions, and the Legal Profession in the New Economy, 34 Osgoode Hall L. J. 1 (1996). 86 Harry W. Arthurs and Robert Kreklewich, Law, Legal Institutions, and the Legal Profession in the New Economy, 34 Osgoode Hall L. J. 1 (1996). 87 Laura Spitz, At the Intersection of North American Free Trade and Same Sex Marriage, 9 UCLA J. Int’l L. & Foreign Aff. 163 (2004) at 186.

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longer possible to change a law in British Columbia, for example, without the change and the reasons for it becoming immediately available to citizens world wide.”88 5.6

THE NORTH AMERICAN FREE TRADE AGREEMENT

The North American Free Trade Agreement (NAFTA) is the single greatest catalyst for progress towards a North American Law. The economic and social integration caused by the NAFTA encourages the member states and their citizens to find new ways to reduce barriers to effective competition within North America. For a detailed analysis of the substantive elements of NAFTA see John Fitzpatrick.89 NAFTA itself, however, requires very little on the part of the member states in terms of changing their domestic legal systems. According to Stephen Zamora, there are relatively few provisions in NAFTA that mandate domestic law standards of a non-trade nature.90 “Several NAFTA provisions, do, however, establish general rules that require each of the NAFTA parties to conform their domestic legal regimes to the NAFTA standard. That said, these provisions are so broadly drafted that they do not require major efforts to redraft domestic laws to conform to the NAFTA standard.”91 The most extensive set of substantive domestic law is Chapter 17, which sets out intellectual property standards, and backs them with a dispute mechanism.92 The agreement does, however, “include important new rules concerning the formation and application of domestic laws and regulations. In large part, these provisions insure transparency in the rule making apparatuses of each country, so that, in addition to the citizens of the rule making country, foreign governments and their citizens can understand and attempt to provide input in the rule making process.”93 These transparency measures “represent an attempt towards convergence in the rule-making system itself,”94 and “permit foreign interests to comment on the formulation of domestic laws and regulations.”95 Further, according to Patricia Hansen, in the United States, “Congress has [sic] limited the ability of domestic courts to consider the United State’s obligations under NAFTA 88

Laura Spitz, At the Intersection of North American Free Trade and Same Sex Marriage, 9 UCLA J. Int’l L. & Foreign Aff. 163 (2004) at 188 89 John P. Fitzpatrick, The Future of the North American Free Trade Agreement: A Comparative Analysis of the Role of Regional Economic Institutions And the Harmonization Of Law In North America and Western Europe, 19 Hous. J. Int’l L. 1 (1996) at 40. 90 Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 409. 91 Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 409. 92 Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 409. 93 Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 410. 94 Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 410. 95 Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 411.

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when construing domestic statutes. No NAFTA provision that is inconsistent with any federal law is to have any effect, and the federal statute implementing NAFTA may not be construed to amend or modify any federal law ‘unless specifically provided for’ in the Agreement.”96 Scott Jablonski discusses NAFTA Chapter 11 and highlights its contributions to the field of international investment law as the first investor to state dispute resolution mechanism incorporated into a trade agreement. Jablonski considers the effect of Chapter 11 on the Mexican legal tradition, and argues that it is a “necessary and positive force for Mexico in the governance of economic integration in North America as it is an expression of well-established principles of international law to business activities between private individuals and governments.”97 Aguilar Alvarez points out several changes to the Mexican environmental law that have occurred since 1994 and are reflective of Mexico’s desire to bring its laws into compliance with the requirements of the North American Agreement on Environmental Cooperation. “NAFTA became effective in 1994, and in 1996 significant amendments to the General Law on Ecological Equilibrium and Environmental Protection (LGEEPA) were published and became effective...The key modifications to the law included first, a change from its conservationist bias to the concept of sustainable utilization of natural resources. Second...[the giving of] relevant space to economic instruments to achieve improved environmental performance by relying less on direct controls. Third, the Environmental Impact Assessment (EIA) instrument was redefined to make it more targeted to polluting activities, while making the process more efficient. Fourth, prosecution of transgressors was made more feasible through a greater number of administrative sanctions and a parallel modification of the penal law...Fifth, the means for greater public participation to denounce environmental transgression was created.”98 According to Noemi Gal-Or, “NAFTA ultimately leaves the ‘playing field’ to the discretion of the national legal institutions and processes of each of the Member States. The obligation to follow the rules and the spirit of NAFTA is thus largely placed up the individual governments, rather than being shared in a partnership among the Member States.”99 5.6.1 Indirect Harmonization Though NAFTA was designed as a free trade agreement, facilitating the flow of goods and services across the borders of its member states, and the substantive legal changes it called for were relatively minor, the agreement’s impact on North American 96

Patricia Isela Hansen, Judicialization and Globalization in the North American Free Trade Agreement, 38 Tex. Int’l L.J. 489 (2003) at 493. 97 Scott R. Jablonski, NAFTA Chapter 11 Dispute Resolution and Mexico: A Healthy Mix of International Law, Economics and Politics, 32 Denv. J. Int’l L. & Pol’y 475 (2004) at 479. 98 Humberto Celis Aguilar Alvarez, The North American Free Trade Agreement’s Impact on the Development of Mexican Environmental Law, 81 U. Det. Mercy L. Rev. 411 (2004) at 412. 99 Noemi Gal-Or, Private Party Direct Access: A Comparison of the NAFTA and the EU Disciplines, 21 B.C. Int’l & Comp. L. Rev. 1 (1998) at 7.

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legal harmonization is much greater than its few explicitly harmonizing provisions. Since the inception of the agreement, scholars identified the secondary impact of NAFTA on the legal systems of the three countries. Several argue that, though NAFTA didn’t create common legal institutions or take many overt steps to integrate the legal environments of the three countries, the agreement has in fact led to legal integration. H. Patrick Glenn argues that “there is an inevitable process of adaptation of local law to the new or emerging circumstances of the common market and this process accelerates the informal harmonization or accommodation which has already been taking place.”100 First, Glenn highlights the Mexican adoption of legislation providing for non-possessory security interests in moveable property. Pressured by Canada and the United States’ flexible forms of non-possessory security over many types of movables, the Mexican government identified the great disadvantage Mexican enterprises were faced with. As such, it reformed its legislation, and “all of North America is now covered by roughly comparable legislation.”101 Glenn also argues that Mexico has moved away from its traditional adherence to the Calvo Doctrine and the principle of “strict territoriality in matters of choice of law,” and as such Mexican Private international law has been brought in line with its northern neighbours.102 Canada has also changed its approach to private international law since the inception of NAFTA and its predecessor, the Canada-US Free Trade Agreement (CUFTA). According to Glenn, when the CUFTA came into force, the Canadian Supreme Court changed the relative restrictive policy against foreign judgments and decided that “foreign judgments should be recognized in Canada whenever a “real and substantial connection” existed between the case and the adjudicating court.103 Luis Rubio argues that NAFTA will “require, out of convenience rather than obligation, important changes in the [Mexican] legal structure and, in particular, in the importance attributed to legal procedures.... [T]he dispute resolution mechanism adopted by the contracting parties requires not only the professionalization of government decision making, but also the adoption of regulations and laws that are operational without the traditional level of government discretion.”104 Glenn concurs, and argues that “National laws have to change, not because NAFTA requires change, but because NAFTA has changed the context in which national laws function. To continue to function as they should, in the new environment, they must be adapted.”105 Likewise, Stephen Zamora argues that the changes in the legal systems of the member states brought on by NAFTA are more the result of governments responding to the 100

H. Patrick Glenn, North America as a Medieval Legal Construction, 2 Global Jurist Adv., (2002) at 8. H. Patrick Glenn, North America as a Medieval Legal Construction, 2 Global Jurist Adv., (2002) at 9. 102 H. Patrick Glenn, North America as a Medieval Legal Construction, 2 Global Jurist Adv., (2002) at 9. 103 H. Patrick Glenn, North America as a Medieval Legal Construction, 2 Global Jurist Adv., (2002) (citing Morguard Investments Ltd. V. De Savoye (1990), 3 S.C.R. 1077, 76 D.L.R. (4th) 256. 104 Luis Rubio, Mas Alla del Tratado, La Jornada (Mexico City), Sept. 26, 1992, at 10 (translation by Stephen Zamora in The Americanization of Mexican Law: Non-Trade Issues In the North American Free Trade Agreement, 24 Law & Pol’y Int’l Bus. 391 (1993) at 457. 105 H. Patrick Glenn, Conflicting Laws in a Common Market? The NAFTA Experiment, 76 Chi.-Kent L. Rev. 1789 (2001) at 1793. 101

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economic ramifications of NAFTA, rather than any need to harmonize their laws to be consistent with NAFTA. According to Zamora, relatively few NAFTA provisions that set forth domestic law standards are so broadly drafted that little or no major effort in redrafting domestic laws is necessary.106 According to Andrew Walker, “a judicial decision-making process is a series of value judgments. The increase in transactions with foreign parties and foreign components in the wake of NAFTA is having a direct effect on the legal systems of its member countries because it internationalizes the scope of the value judgments made by domestic judges. As trade liberalization and advances in communication and transportation allow market forces to bring Mexico, the United States, and Canada closer together, legal authorities in each country must perform more analyses that reconcile their legal systems with the legal systems of their trading partners.”107 Ultimately, H Patrick Glenn argues that “above all, NAFTA facilitates and multiplies legal exchange, and legal understanding, between the NAFTA countries...The flow of legal transactions in a free trade area will accentuate the legal convergence already underlying the law of the free trade area.”108 5.6.2 NAFTA Dispute Resolution The North American Free Trade Agreement was ground breaking with its dispute resolution mechanisms.109 According to Gary Hufbauer, between 1989 and 1994, there were a total of 57 disputes under Chapter 18 (5 cases) and Chapter 19 (52 cases) of the CUSFTA.110 The Chapter 19111 (AD-CVD) disputes affected around US$ 7 billion in trade (the lumber dispute accounted for almost US$ 6 billion).112 On average during this period, the United States and Canada traded US$ 185 billion annually. Therefore,

106

Stephen Zamora, NAFTA and The Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 409. 107 Andrew J. Walker, Conflict of Laws Analysis for the Era of Free Trade, 20 Am. U. Int’l L. Rev. 1147 (2005) at 1148. 108 H. Patrick Glenn, Conflicting Laws in a Common Market? The NAFTA Experiment, 76 Chi.-Kent L. Rev. 1789 (2001) at 1795. 109 Cf. Adreas F. Lowenfeld, Binational Dispute Settlement Under Chapter 19 of the Canada-United States Free Trade Agreement: An Interim Appraisal, 24 N.Y.U. J. Int’l & Pol. 269 (1991) (providing an overview of the predecessor to NAFTA, the Canada US Free Trade Agreement, and its dispute resolution mechanisms on which much of the NAFTA was premised). 110 Gary Clyde Hufbauer, Institute for International Economics, Remarks at the annual policy conference of the Canadian Association for Business Economics, Washington, DC, March 30, 2001. 111 See Eric J. Pan, Assessing the NAFTA Chapter 19 Binational Panel System: An Experiment In International Adjudication, 40 Harv. Int’l L. J. 379 (1999) (providing an assessment and overview of Chapter 19); Cf. Homer E Moyer, Chapter 19 of the NAFTA: Binational Panels As the Trade Courts of Last Resort, 27 Int’l Law. 707 (1993) (The constitutionality of the NAFTA dispute resolution mechanisms, Chapter 19 in particular, have been challenged several times. This article by Homer Moyer provides a good reflection of the argument that the Chapter presents no constitutional concerns). 112 Gary Clyde Hufbauer, Institute for International Economics, Remarks at the annual policy conference of the Canadian Association for Business Economics, Washington, DC, March 30, 2001.

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disputes affected less than 4 percent of two-way trade.113 Similarly, under the NAFTA, between January 1994 and 2001, there were a total of 96 disputes (including Mexico) under Chapter 11 (12 cases), Chapter 19 (80 cases), and Chapter 20 (4 cases) of the NAFTA.114 The Chapter 19 dispute cases involving Canada and the United States between 1994 and 1999 affected US $11 billion in trade out of an average annual trade of over US$ 303 billion-again under 4 percent of total trade.115 Hufbauer also postulates that when the softwood lumber case is finally resolved, the caseload of disputes will probably drop below 1 percent of total trade. It is important to note that the NAFTA dispute resolution process is limited to only those types of disputes explicitly proscribed for in NAFTA. While there are certainly a multitude of disputes that arise each day between businesses transacting across the borders of the NAFTA member states, only those disputes where the cause of action is directly accounted for in NAFTA can be dealt with by the NAFTA dispute resolution process. All other disputes, not proscribed for in NAFTA, must progress via domestic routes. “The domestic judicial institutions of the NAFTA countries have largely been prevented from playing any constructive role in the resolution of interstate disputes arising under NAFTA.”116 Unfortunately no data is available indicating what percentage of disputes between corporations in the NAFTA member states are in fact proscribed for in NAFTA and therefore eligible to seek recourse under the NAFTA dispute resolution mechanism, and what percentage of disputes are non-NAFTA proscribed, and therefore must seek other means of redress including mediation, arbitration, and litigation in domestic courts. An assessment of that data would prove useful to a study of the harmonization of North American law. 5.6.3 The Side Agreements Jack Garvey argues that NAFTA’s greatest contribution to legal harmonization was the two side agreements on labour and the environment.117 According to Garvey, the dispute resolution process in the side agreements “is the premier attempt to date to provide a modality in international trade law for reconciling trade values with social and environmental values.”118 The standard for determining whether the side agreements have been breached under Article 28 of the Environment agreement and Article 27 of the Labour agreement is whether there is a “’persistent patter of failure by the party 113

Gary Clyde Hufbauer, Institute for International Economics, Remarks at the annual policy conference of the Canadian Association for Business Economics, Washington, DC, March 30, 2001. 114 Gary Clyde Hufbauer, Institute for International Economics, Remarks at the annual policy conference of the Canadian Association for Business Economics, Washington, DC, March 30, 2001. 115 Gary Clyde Hufbauer, Institute for International Economics, Remarks at the annual policy conference of the Canadian Association for Business Economics, Washington, DC, March 30, 2001. 116 Patricia Isela Hansen, Judicialization and Globalization in the North American Free Trade Agreement, 38 Tex. Int’l L.J. 489 (2003) at 493. 117 See also Leonard Bierman and Rafael Gely¸ NAFTA at Age One: A Blueprint For Hemispheric Integration?: I. The Labor Side Agreement: The North American Agreement on Labor Cooperation: A New Frontier In North American Labor Relations, 10 Conn. J. Int’l L. 533 (1995) (presenting an overview of key labor law issues raised by the NAALC). 118 Jack I. Garvey, Current Development: Trade And The Quality of Life – Dispute Resolution Under the NAFTA Side Accords On Labor and The Environment, 89 A.J.I.L. 439 (1995) at 439.

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complained against to effectively enforce’ its environmental, health or labor laws.”119 Garvey points out, however, that the NAFTA side agreements only hold the member states to their own national standards, and fails to create any international environmental, health, or labour requirements.120 Garvey also notes that the side agreements assure political viability because the arbitration that results from their dispute resolution mechanisms is ad hoc, and not by permanent tribunal.121 According to Garvey, this ad hoc nature of the proceedings, as opposed to permanent tribunal, is inherently inconsistent with the constriction of stare Decisis and therefore should the arbiters find a pattern of non-enforcement, “the result is not rule formation, but a requirement for further negotiation and finally a plan of action.”122 This observation is important to an analysis of the encouragement that NAFTA provides for the creation of a North American Law as it suggests that the ad hoc nature of the arbitration in the NAFTA side agreements leads to greater bureaucracy and negotiation and less to rule formation and predictability of law based on consistent application of the rules. Thus a more permanent tribunal may be more effective for adjudicating North American law. Zamora adds to the discussion of the side agreements: “the importance of the Supplemental Agreements lies in the precedent that they establish for making issues of domestic law enforcement relevant to international concern. In doing so, they expose Canadian, Mexican and US agencies to scrutiny that is intended to insure minimum levels of law enforcement. Optimists might see this as the beginning of a modest ‘social charter’ such as that which has been proposed for the European Union.”123 Leonard Bierman provides an in-depth look into the North American Agreement on Labour Cooperation. Though he labels the agreement a “document of tremendous significance,” he argues the design of the agreement was to be “extremely sensitive to the sovereign rights of each of the signatory nations in regulating traditional industrial relations,” and therefore has had “little impact on addressing on of the major concerns leading to the agreements enactment, the loose enforcement of labor laws in Mexico.”124

119

Jack I. Garvey, Current Development: Trade And The Quality of Life – Dispute Resolution Under the NAFTA Side Accords On Labor and The Environment, 89 A.J.I.L. 439 (1995) at 442. 120 Jack I. Garvey, Current Development: Trade And The Quality of Life – Dispute Resolution Under the NAFTA Side Accords On Labor and The Environment, 89 A.J.I.L. 439 (1995) at 450. 121 Jack I. Garvey, Current Development: Trade And The Quality of Life – Dispute Resolution Under the NAFTA Side Accords On Labor and The Environment, 89 A.J.I.L. 439 (1995) at 447. 122 Jack I. Garvey, Current Development: Trade And The Quality of Life – Dispute Resolution Under the NAFTA Side Accords On Labor and The Environment, 89 A.J.I.L. 439 (1995) at 447 123 Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 413. 124 Leonard Bierman and Rafael Gely¸ The North American Agreement on Labor Cooperation: A New Frontier In North American Labor Relations, 10 Conn. J. Int’l L. 533 (1995) at 569.

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According to Lori Wallach, NAFTA members are responsible for enacting laws that are the “least trade restrictive as possible,”125 something Laura Spitz sees as a harmonizing factor, attempting “to make law and its application consistent among the member states.”126 5.6.4 NAFTA’s Failure to Encourage Greater Legal Harmonization Despite what many see as positive steps taken by the NAFTA towards the goal of legal harmonization, many scholars are critical of the agreement for not going far enough towards legal harmonization, and failing to adequately balance the interests of the three parties in its legislation. First, Angel R. Oquendo (1997) highlights the influence of the common law legal tradition of the United States on NAFTA, specifically Chapter 19’s procedural requirements.127 He argues that the influence of the common law system can clearly be seen in the “selection of the panellists, the pleadings, the announcement of the written decision at the end, the scope of review, and the distribution of costs.”128 Further, he argues, that the Chapter 19 procedure proves a “quintessential common law procedure,” in as much as it is based on a set of discrete and self standing rules, organizes all procedural activity around a single hearing, and assigns the task of guiding the process to the participants.129 240. The impact of this influence of the common law system on NAFTA is that, according to Oquendo, an American or Canadian (not necessarily including Quebec or Louisiana) would feel right at home at any of the proceedings, but a Mexican jurist would find the procedure completely foreign. He argues that the Mexican civil law procedure is immensely different from the US and Canadian common law systems, in so far as it does not allow for peremptory challenges, the short pleading stages doe not aim at distilling a limited set of issues for a trial, judgements include short opinions and no dissents or concurrences, the appeal involves no factual deference to the trial court, and the losing party pays the attorney’s fees. More importantly, according to Oquendo, the Mexican system “calls for a systematically integrated procedural code, a series of loosely connected oral and written proceedings which gradually define the issues, and a decision maker in charge of moving the process forward.”130

125

Lori M. Wallach, Accountable Governance in the Era of Globalization: The WTO, NAFTA, and International Harmonization of Standards, 50 U. Kan. L. Rev. 823 (2002), at 828-29. 126 Laura Spitz, At the Intersection of North American Free Trade and Same Sex Marriage, 9 UCLA J. Int’l L. & Foreign Aff. 163 (2004) at 185. 127 Angel R. Oquendo, The Comparative and the Critical Perspective in International Agreements, 15 UCLA Pac. Basin L.J. 205 (1997). 128 Angel R. Oquendo, The Comparative and the Critical Perspective in International Agreements, 15 UCLA Pac. Basin L.J. 205 (1997) at 239. 129 Angel R. Oquendo, The Comparative and the Critical Perspective in International Agreements, 15 UCLA Pac. Basin L.J. 205 (1997) at 240. 130 Angel R. Oquendo, The Comparative and the Critical Perspective in International Agreements, 15 UCLA Pac. Basin L.J. 205 (1997) at 254.

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Angel Oquendo also criticizes NAFTA for failing to sufficiently take into account the special legal identity of Mexico. “The process leading to the Agreement did not take the form of a conversation on bridging the legal distance between the parties, but rather that of an imposition of legal conformity on the weakest party. Mexico not only had to Americanize its legal system, but also had to accept a pre-fabricated legal superstructure based almost entirely on U.S. Law.”131 Julie Mertus and Elizabeth Breier-Sharlow are also critical of NAFTA for failing to take into account the Mexican Civil law procedures.132 They argue that including such civil law mechanisms as an active decision maker or flexible process would allow participants in the NAFTA dispute process scope with the vagaries of national law in an “international forum.” 133 It should be noted that Mertus and Breier-Sharlow grounds their arguments in Bradley Condon’s belief that the “effective implementation of the NFATA assumes a common North American legal system and a common North American legal culture, neither of which exist.”134 They further argue that common law concepts and procedures which are familiar to Canadian and American lawyers and judges, “are a barrier to Mexico’s full participation in the agreement.”135

6.

AREAS OF POTENTIAL HARMONIZATION

Having taken a broad survey of the material that exists on the encouragements of, and impediments to, progress towards a North American Law, the review will now turn to the specific areas of law that are discussed in the literature as having potential for harmonization in North America. Some areas, insolvency most notably, show great promise for harmonization and in fact are already taking great strides towards that goal. Others are much farther away from any integration, and are not discussed below. Corporate and commercial laws feature most prominently with the greatest likelihood of success for regional integration. This appears to be the result of the dramatic increase of trade between the NAFTA members and the subsequent rise in the transnational flow of goods and services across borders. “Countries with similar economic structures (i.e. where the relative weight of their economic sectors is similar) that trade with each other...will also have private sectors demanding compatible legal frameworks.”136

131

Angel R. Oquendo, NAFTA’s Procedural Narrow Mindedness: The Panel Review of Antidumping and Countervailing Duty Determinations Under Chapter Nineteen, 11 Conn. J. Int’l L. 61 (1995) at 62. 132 Julie Mertus and Elizabeth Breier-Sharlow, Power, Legal Transplants and Harmonization, 81 U. Det. Mercy L. Rev. 477 (2004). 133 Julie Mertus and Elizabeth Breier-Sharlow, Power, Legal Transplants and Harmonization, 81 U. Det. Mercy L. Rev. 477 (2004) at 485. 134 Julie Mertus and Elizabeth Breier-Sharlow, Power, Legal Transplants and Harmonization, 81 U. Det. Mercy L. Rev. 477 (2004) at 484. 135 Julie Mertus and Elizabeth Breier-Sharlow, Power, Legal Transplants and Harmonization, 81 U. Det. Mercy L. Rev. 477 (2004) at 485. 136 Edgardo Buscaglia, Intellectual Property Rights and Business Investment In Less Developed Countries, paper presented at “Conference on Vietnam in 2001: Prospects for Economic and Social Progress,” Washington DC, November 16-17 2001.

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6.1

ANTI-TRUST

James F. Rill discusses several efforts to harmonize global antitrust laws. He prefaces his discussion, however, with a statement indicating they are limited in number and of those efforts that do exist, there are few signs of progress.137 These efforts include those of organizations such as the WTO, the OECD, and UNCTAD. E Thomas Sullivan also discuss the harmonization of anti-trust laws, focusing on the creation of a unified approach to remedies for monopoly and merger violations, and suggesting that the “US could benefit from borrowing several approaches explicitly adopted by the EU.”138 6.2

CLASS ACTIONS

In Currie v McDonald’s Restaurants of Canada Ltd., the Ontario Court of Appeal ruled that there were “strong policy reasons favouring the fair and efficient resolution of interprovincial and international class action litigation,” and that conflict of law rules “should recognize, in appropriate cases, the importance of having claims resolved in one jurisdiction.” In order for a foreign judgment to be recognized, two requirements must be met: first, the foreign court must have had a proper basis for the assertion of jurisdiction, and second, the interests of the Canadian residents must have been adequately represented.139 In light of Currie, the harmonization of North American Class Action law should include specific jurisdictional requirements so that all parties, in all three countries, know when and where they might be parties to class actions. 6.3

CRIMINAL LAW

William Burke-White presents the argument for regional enforcement of criminal laws highlighting the importance of possibilities for softer forms of regionalization within already existing enforcement mechanisms. According to Burke-White, his work is a “call for greater consideration of regional criminal justice and an argument that a softer form of regionalism, primarily through existing mechanisms, is relatively easy to achieve and could offer powerful normative benefits.”140 He goes on to discuss the role of permanent institutions for the enforcement of international criminal law, and the benefits of regionalizing criminal law such as less political malleability and reduced financial costs. In another article, Burke-White argues that the future of this regional integration will occur at a domestic level. He anticipates its emergence from a community of courts – domestic, semi-institutionalized, and supranational – and that the ability of these

137

James F. Rill and Mark C Schecter, International Antitrust and Intellectual Property Harmonization of the Interface, 34 L. & Policy in Int’l Bus. 783 (2003) at 3. 138 E. Thomas Sullivan, Antitrust remedies In the US and EU: Advancing A Standard Of Propostionality, 48 Antitrust Bulletin 377 (2003) at 377. 139 The abstract from Currie v McDonald is taken from: Christopher D. Woodbury and Barbara L. Grossman, Recognition and Enforcement of U.S. Class Action Decisions in Canada, 35 Int’l News 15, American Bar Association Section of International Law, Winter 2006. 140 William W. Burke-White, Regionalization of International Criminal Law Enforcement: A Preliminary Exploration, 38 Tex. Int’l L.J. 729 (2003) at 731.

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courts to share information among each other, bringing order and regularity to the system, will be critical to the success of the regional efforts.141 6.4

ENVIRONMENT

For a detailed report on the current status of North American environmental law, including any progress towards harmonization of rules and standards, see the Commission for Environmental Cooperation of North America’ (CEC) second edition of the North American Environmental Law and Policy Series.142 The North American Agreement on Environmental Cooperation is presented above in the discussion on NAFTA as an encouragement of North American harmonization, and is the sinlge most prominent indicator of legal harmonization in this sector. The Kyoto Protocol on Climate change had the potential to harmonize Environmental laws and standards in North America even further, but failed to do so when the US backed out of the agreement and Mexico wasn’t included. 6.5

FORUM SELECTION/CHOICE OF LAW

According to Michael Wallace Gordon, “the question of which law applies becomes less important as the laws are harmonized, such as by the member nations of NAFTA having each signed the Convention on the International Sale of Goods. Thus, a contract issue between parties in Mexico and the United States initially thought to raise a choice of law issue may raise a ‘false conflict’ – the rule will be the same under either Mexican or United States law.”143 H. Patrick Glenn adds that where “mandatory local rules exist...they may frequently be found not to be mandatory for cross-border transactions, further extending the zones of conflict-free party choice of law.”144 He further argues that a sign of North American legal integration and harmonization is that “judges do not apply choice of law rules on their own initiative, but only where foreign law is pleaded by a party. Harmony of laws is thus presumed and time and money is not spent on the second-order questions of choice of law unless it makes a difference to the parties.”145 He also adds that informal instruments such as the UNIDROIT Principles for International Commercial Contracts can be seen as “a guide to objective, international standards and play a mutually supportive role with the law of the Americas.”146 Robert Kossick emphasizes the importance of strong forum selection clauses. “Where disputes between US and Mexican parties lead to the filing of an action in Mexico – 141

William W. Burke-White, A Community of Courts: Towards a System of International Criminal Law Enforcement, 24 Mich. J. Int’l L. (2002). 142 Commission for Environmental Cooperation of North America, North American Environmental Law and Policy Series, Second Edit.¸ (Montreal, 2003). 143 Michael Wallace Gordon, Economic Integration In North America: An Agreement of Limited Dimensions but Unlimited Expectations, 56 Mod. L. Rev. 157 (1993) at 169. 144 H. Patrick Glenn, North America as a Medieval Legal Construction, 2 Global Jurist Adv., (2002) at 7. 145 H. Patrick Glenn, North America as a Medieval Legal Construction, 2 Global Jurist Adv., (2002) at 7. 146 H. Patrick Glenn, Harmony of Laws in the Americas, 34 U. Miami Inter-Am. L. Rev. 223 (2003) at 243.

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either by operation of a valid forum selection clause or other wise – it is usually the best interest of the US party to either arbitrate or mediate a settlement. Because the common law doctrine of forum non coneniens does not exist in Mexico, failure to resolve the dispute by extra-judicial means will leave the U.S. party with no option but to litigate in Mexican courts.”147 6.6

HUMAN RIGHTS

Paul Dubinsky provides a very detailed overview of the history of harmonization efforts in the field of human rights law and calls for a common set of principles meant to harmonize the procedural means by which national courts adjudicate grave human rights violations.148 Though his analysis is almost entirely focused on developing countries, many of the harmonization efforts he calls for are led by developed nations such as the United States and Canada, and therefore his work offer value to the North American Law project because it highlights commitments the NAFTA member states may have to the global community, not just their North American neighbours, commitments that would need to be considered when drafting and implementing a North American law. Harold Burnam also mentions developments of the mid 1990s in the field of family law harmonization, specifically, the Convention on the Protection of Children, the International Child Support Enforcement legislation, and the Intercountry Adoption Convention.149 Laura Spitz emphasizes the role transnational gay and lesbian alliances have played in coordinating their resources and efforts to have the greatest effect on the legislatures and decision makers in their host countries.150 She argues that the degree of social, cultural and economic integration that has been brought on since the inception of NAFTA is so dramatic that the US will not be able to avoid tackling the issues of gay marriage. Audrey Macklin discusses a recent instrument implemented by the Canadian and United States governments on December 29th, 2004, to constrain the movement of asylum seekers, the Canada-U.S. Safe Third Country Agreement. The Agreement is modeled on the Dublin Convention of the European Union, and required asylum seekers to lodge their refugee claims in the first country of arrival. “In other words, asylum seekers on the US side of the border who are attempting entry into Canada will be deflected back to the United States, and vice versa.”151 Macklin challenges the 147

Robert M. Kossick, Jr., Litigation In The United States And Mexico: A Comparative Overview, 31 U. Miami Inter-Am. L. Rev. 23 (2000) at 24. 148 Paul R. Dubinsky, Human Rights Law meets Private Law Harmonization: The Coming Conflict, 30 Yale J. Int’l L. 211 (2005) at 316. 149 Harold Burnam, Private International Law, 31 Int’l Law 685 (1997) at 688. 150 Laura Spitz, At the Intersection of North American Free Trade and Same Sex Marriage, 9 UCLA J. Int’l L. & Foreign Aff. 163 (2004) at 189. 151 Audrey Macklin, Disappearing Refugees: Reflections on the Canada-U.S. Safe Third Country Agreement, 36 Colum. Hum. Rts. L. Rev. 365, (2005)at 370.

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effectiveness of the agreement and ultimately concludes that while there may be a small degree of success as a reduction of asylum seekers, the end result will be the same inflow of individuals, but instead of seeking asylum, they will simply enter the country illegally.152 According to Laura Spitz, “looking to law as a way to articulate and enforce changing norms and to accommodate changing structures in a changing system makes sense when corporations are using law (and the absence of law) for capital gain at the expense of human well-being. Where those corporations operate in an arena outside national regulation, we need to look to international, transnational, or supranational regulations for solutions.”153 6.7

IMMIGRATION LAWS

Frederic Moll calls for the harmonization of American and Canadian Immigration laws in the interest of creating a secure North American Security Perimeter.154 Moll describes three cases where Canadian citizens were unjustly detained and held in the United States for illegally entering the country (one individual was arrested for entering Maine while he was pumping gas, the pumps were in Maine but the entrance to the station is in Quebec) and argues that a common security perimeter, a component of which is a harmonized immigration system, would allow citizens of North America to move freely across borders while strengthening resistance of a threat from abroad.155 Laura Spitz argues that, in North America, “the problems created by the unrestricted flow of capital across national borders are hugely exacerbated by the corresponding immobility of people.”156 “Elimination or reform of North American immigration barriers not only advances substantive equality, but may make good economic sense as well...the experience of the European Community shows that restricting human mobility disrupts market operation.”157

152

Audrey Macklin, Disappearing Refugees: Reflections on the Canada-U.S. Safe Third Country Agreement, 36 Colum. Hum. Rts. L. Rev. 365, (2005) at 426. 153 Laura Spitz, The Gift of Enron: An Opportunity To Talk About Capitalism, Equality, Globalization, And the Promise of a North American Charter of Fundamental Rights, 66 Ohio St. L. J. 315 (2005 at 395-96 154 Frederic J. Moll, The Legal & Technological Advantages of a North American Perimeter In The War Against Terrorism: How The Implementation Of A Schengen-Type System Will Best Serve The Security Interests Of The United States And Canada, 204 Syracuse Sci. & Tech. L. Rep. 2 (2004) 155 Frederic J. Moll, The Legal & Technological Advantages of a North American Perimeter In The War Against Terrorism: How The Implementation Of A Schengen-Type System Will Best Serve The Security Interests Of The United States And Canada, 204 Syracuse Sci. & Tech. L. Rep. 2 (2004). 156 Laura Spitz, The Gift of Enron: An Opportunity To Talk About Capitalism, Equality, Globalization, And the Promise of a North American Charter of Fundamental Rights, 66 Ohio St. L. J. 315 (2005) at 370. 157 Laura Spitz, The Gift of Enron: An Opportunity To Talk About Capitalism, Equality, Globalization, And the Promise of a North American Charter of Fundamental Rights, 66 Ohio St. L. J. 315 (2005) at 372.

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6.8

INSOLVENCY

If globalization does proceed apace, then the pressures for a universal system for managing the financial crises of multinational companies will prove irresistible: global bankruptcy for a global market. Jay Westbrook.158 The area of insolvency law is arguably the most developed with respect to creating a single North American Law. There have been several efforts to harmonize insolvency laws, some dealing specifically with the North American partners, and other with a more global scope. Emilie Beavers argues that the NAFTA members should “consider harmonizing their bankruptcy laws, both procedurally and substantively.”159 The goal of such harmonization according to Beavers is to “maximize the value of the estate for all creditors. Other benefits of harmonization include simplification of procedural and substantive law, which leads to more accessible and user-friendly bankruptcy codes and more predictable systems with lower transaction costs.”160 Jay Westbrook sees promise for the harmonization of North American Bankruptcy Law. According to Westbrook, “The key similarity among the three countries in debtor-creditor law is that bankruptcy is national law in all three, while the law of secured credit and other key debtor—creditor laws are, for the most part, regional.”161 Westbrook then proceeds to survey several of the international insolvency projects mentioned below and concludes that “international issues are beginning to flow into the office of bankruptcy lawyers all over the United States. They cannot be held back.”162 Douglas Doetsch and Aaron Hammer provide a thorough overview of the US response to transnational insolvency issues, in particular the role comity plays in US court decisions.163 For Doetsch, the prospect of seamless international insolvency tribunals is promising, but first must overcome several challenges, most notably a lack of familiarity with other systems, and the recent conventions attempting to harmonize the laws. Several organizations have made great efforts to harmonize insolvency laws. The United Nations Commission on International Trade Law (“UNCITRAL”) has created a Model Insolvency law which is beginning to receive increased attention and

158

Jay Lawrence Westbrook, A Global Solution to Multinational Default, 98 Mich. L. Rev. 2276 (2000) at 2238. Emilie Beavers, Note, Bankruptcy Law Harmonization in the NAFTA Countries: The Case of the United States and Mexico, 2003 Colum. Bus. L. Rev. 9565 (2003) at 966 160 Emilie Beavers, Note, Bankruptcy Law Harmonization in the NAFTA Countries: The Case of the United States and Mexico, 2003 Colum. Bus. L. Rev. 9565 (2003) at 966 161 Jay Lawrence Westbrook, Creating International Insolvency Law, 70 Am. Bankr. L.J. 563 (1996) at 565. 162 Jay Lawrence Westbrook, Creating International Insolvency Law, 70 Am. Bankr. L.J. 563 (1996) at 574. 163 Douglas A. Doetsch and Aaron L. Hammer, Observations on Cross-Border Insolvencies and their Resolution in the NAFTA Region: Where are We Now?, 10 U.S.-Mex. L.J. 61 (2002). 159

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acceptability globally. For a very detailed and thorough analysis of the UNCITRAL Model Insolvency Law see John Pottow (2006).164 The International Bar Association is also actively trying to harmonize global insolvency laws with its Cross Border Insolvency Concordat.165 The Concordat provides a framework for harmonizing cross-border insolvency proceedings by suggesting generalized principles which the participants can tailor to particular circumstances and then adopt as a practical approach to dealing with the process.166 Leslie A Burton provides an overview of the Concordat and the UNCITRAL Model Law on Cross-Border Insolvency in the European context, and calls for a convention, without opt-out provisions, as the only equally binding approach to insolvency law harmonization.167 For an excellent discussion of existing international bankruptcy conventions as of 1995 see David Cook who discusses the Scandinavian Bankruptcy Convention, the European Draft Bankruptcy Convention, the Council of Europe’s Bankruptcy Convention, the Latin American Bankruptcy Agreements (The Mentevideo Treaty and the Bustamante Code), the IBA’s Model International Insolvency Cooperation Act, and finally the US Canada Bankruptcy Treaty. In his assessment of these agreements, Cook argues that only three of the above agreements have been ratified and that the NAFTA nations must “take a new approach towards bankruptcy agreements if the wish to enact a truly successful [North American Bankruptcy Agreement].”168 For more information on Cook’s proposed NABA see Part 7 below. There are also several efforts dealing specifically with North America. According to Dargan, there was an initial attempt at a US-Canada Bankruptcy Treaty which was proposed but never ratified.169 The American Law Institute (“ALI”) is also trying to harmonize insolvency laws in North America, with its Transnational Insolvency Project. The first international project developed by the ALI, the Transnational Insolvency Project deals specifically with the North American members in the interest of harmonizing their insolvency laws. According to Michael Traynor, “the project has been of great value in identifying areas for cooperation in international insolvencies and in building 164

John Pottow, Procedural Incrementalism: A Model For International Bankruptcy, 45 VAJIL 935 (2006); See also Sandile Khumalo, International Response to the UNCITRAL Model on Cross-Border Insolvency, International Insolvency Institute, 2004, www.iiiglobal.org. 165 The Concordat was used by a US Bankruptcy Court in In re Everfresh Beverages et al v. Charterhouse Group International, Inc. et al, 238 B.R. 558 (1999). For more information on the Concordat see Anne Nielsen et al., The Cross Border Insolvency Concordat: Principles to Facilitate the Resolution of International Insolvencies, 70 Am. Bankr. L. J. 533 (1996). 166 International Bar Association, Cross-Border Insolvency Concordat, downloaded from the International Insolvency Institute www.iiiglobarl.org June 5, 2006. 167 Leslie A. Burton, Toward an International Bankruptcy Policy In Europe: Four Decades In Search Of A Treaty, 5 Ann. Surv. Int’l & Comp. L. 205 (1999) at 236. 168 David C. Cook, Prospects for A North American Bankruptcy Agreement, 2 Sw. J.L. & Trade Am. 81 (1995) at 95. 169 Dean Dargan, COMMENT, The Emergence of Mechanisms For Cross Border Insolvencies In Canadian Law, 17 Conn. J. Int’l L. 107 (2001) at 5.

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relationships and opportunities for courts in the three countries to work out rationally the problems of a multi-jurisdictional insolvent party. The project also provides a foundation for potential expansion of the work to include other jurisdictions.”170 A more detailed analysis can be found in International Insolvency by the Federal Judicial Center.171 6.9

INTELLECTUAL PROPERTY AND PATENT

The National Law Center for Inter-American Free Trade completed a study on the cross-border transshipment of pirated intellectual property goods (including software, clothing and footwear apparel, sporting equipment, toys, music recordings, videos, DVDs, etc.), as well as other threats to the enforcement of intellectual property rights (IPR) and customs laws in the NAFTA region.172 The study provides an assessment of prevailing conditions in the NAFTA members countries as well as suggestions and recommendations on ways to combat transshipment, including improved enforcement of IPR and customs laws. The publication also identifies existing customs and IP laws, regulations and case law that apply and examines how those are implemented (or not) in practice, including their strengths and weaknesses, as well as the extent of private sector involvement. Carolita Oliveros and Andre Jaglom identify the need for Intellectual Property and Patent law harmonization in North America when they expose the bureaucratic inefficiencies that business persons must navigate when applying for a patent or trademark in Canada and the United States.173 The authors do, however, point out that a business can file an “international patent application under the ‘Patent Cooperation Treaty’ and thereby simultaneously seek protection for an invention in each of a large number of countries, including the members of the North American region.”174 Stephen Zamora (1993) points out that harmonization of Mexican and American Intellectual Property laws began occurring in 1991 with the Mexican Industrial Property Law. This law “eliminates the vast majority of problems cited by US industries relating to patents, copyrights and trademarks.”175 According to Zamora, these reforms of Mexican law will mean that the obligations set forth in NAFTA Chapter 17 on intellectual

170

Michael Traynor, Conflict of Laws, Comparative Law, and the American Law Institute, 49 Amer J. of Comp. Law 391 (2001) at 402. 171 Federal Judicial Center, International Insolvency, 2001. 172 National Law Center for Inter-American Free Trade, Transshipment and other threats to the enforcement of Intellectual Property Rights in Canada and Mexico (2004). The entire review of this study is taken from the NLCIFT’s website at http://natlaw.com/pubs/purchase/intellpro.htm visited on 6/24/2006 173 Carolita L. Oliveros and Andre R. Jaglom, International Distribution Issues: Contract Materials: Options for Developing a Foreign Market, SK068 ALI-ABA 851, (2005) at 992. 174 Carolita L. Oliveros and Andre R. Jaglom, International Distribution Issues: Contract Materials: Options for Developing a Foreign Market, SK068 ALI-ABA 851, (2005) at 993. 175 Stephen Zamora, The Americanization of Mexican Law: Non-Trade Issues In the North American Free Trade Agreement, 24 Law & Pol’y Int’l Bus. 391 (1993) at 416 (quoting Gary C. Hufbauer & Jeffery J. Schott, North American Free Trade: Issues and Recommendations 185 (1992).

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property, copyright, trademark and patent protection, will not require additional significant legal reforms in Mexico.176 Edgardo Buscaglia espouses the success of NAFTA’s IP protection under Chapter 17 and argues that for future multilateral and regional agreements, “NAFTA’s standards (rather than those of TRIPs), will likely be the model on which a hemisphere-wide freetrade area is based.” 177 Further, Buscaglia touches on the motivation for developing countries, like Mexico, to harmonize their laws with their more developed trading partners: “When developing countries make the policy decision to adopt an export driven approach to economic growth, the urgent need to attract foreign high-tech capital coupled with the required flows of information-intensive capital imported goods will provide the incentive to improve intellectual property protection by making legal standards more compatible with the WTO and NAFTA’s standards.”178 Globally, according to Harold Burnam, UNCITRAL completed “its ground-breaking basic rules on electronic at its 1996 Plenary session, in the form of a model national law endorsed by the General Assembly. The rules cover functional equivalents of “signature,” “original,” “writing,” etc., and provide default rules on who is bound, where and when messages are deemed to have been made or received...allocations of risk, and other matters.”179 Ysolde Gendreau takes a comparative look at the IP law harmonization efforts in both Europe and North America, and identifies distinguishing factors that she then attributes to the differing objectives of the two institutions and predicts a greater degree of success for the EU model of harmonization due to its particularity.180 6.10

LABOUR

Craig Jackson compares the labour laws in the European Union and North America in the interest of determining whether the EU’s approach should act as a model for North American labour law harmonization.181 According to Jackson, harmonization is the only rational way to deal with the problem of capital and job flight by equalizing costs across borders. Harmonization removes the incentive to “take the money and run” on the part

176

Stephen Zamora, The Americanization of Mexican Law: Non-Trade Issues In the North American Free Trade Agreement, 24 Law & Pol’y Int’l Bus. 391 (1993) at 416. 177 Edgardo Buscaglia, Intellectual Property Rights and Business Investment In Less Developed Countries, paper presented at “Conference on Vietnam in 2001: Prospects for Economic and Social Progress,” Washington DC, November 16-17 2001. 178 Edgardo Buscaglia, Intellectual Property Rights and Business Investment In Less Developed Countries, paper presented at “Conference on Vietnam in 2001: Prospects for Economic and Social Progress,” Washington DC, November 16-17 2001. 179 Harold Burnam, Private International Law, 31 Int’l Law 685 (1997) at 686. 180 Ysolde Gendreau, Copyright Harmonization in the European Union and In North America, 20 Colum.-VLA J. L. & Arts 37 (1995-1996). 181 Craig L. Jackson, Social Policy Harmonization and Worker Rights In the European Union: A Model for North America?, 21 N.C.J. Int’l L. & Com. Reg. 1 (1995-1996).

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of companies of one party.”182 Jackson argues that there are three possible means of labour law harmonization: first, EU style harmonization with binding standards utilizing the doctrine of direct effect or requiring implanting legislation making such standards self-executing; second, the incorporation of international labour standards as a common foundation of oversight; and finally, a modification of the system in place under the North American Agreement on Labour Cooperation.183 6.11

POWERS OF ATTORNEY

In the winter of 1995, the National Law Center for Inter-American Free Trade (NLCIFT) completed a study regarding six uniform North American powers of attorney forms expected to ease commercial transactions between the three NAFTA countries. The forms are designed to be user-friendly and are available in Spanish, French and English.184 6.12

SECURED FINANCING AND INVESTMENT

The National Law Center for Inter-American Free Trade published a volume in 1995 on the harmonization of the secured financing laws in the NAFTA countries.185 According to the report, although NAFTA opens Mexico's financial services sector, it has not remedied the country's antiquated secured financing legislation and registry systems. Mexico has not adopted far-reaching legislative changes similar to those found in Article 9 of the Uniform Commercial Code and the Canadian Personal Property Security Act. As a result, the Center launched the Secured Financing Project to help harmonize secured transactions law among the NAFTA countries. 186 Through the use of eight hypothetical financing transactions involving inventory, equipment and accounts receivable financing as well as project financing, consumer credit, agricultural lending and financial leasing, the study takes a comparative look at secured transactions law and practice among the NAFTA countries.187 With respect to each transaction, the key features of U.S. and Canadian law are set forth along with an explanation of how the legal and registry systems in these countries facilitate such transactions. This is followed by a detailed examination of Mexican law and practice with particular emphasis on those aspects of the law which currently hinder secured lending. In connection with the study, various Mexican lawyers, notaries and bankers were interviewed in order to 182

Craig L. Jackson, Social Policy Harmonization and Worker Rights In the European Union: A Model for North America?, 21 N.C.J. Int’l L. & Com. Reg. 1 (1995-1996) at 62. 183 Craig L. Jackson, Social Policy Harmonization and Worker Rights In the European Union: A Model for North America?, 21 N.C.J. Int’l L. & Com. Reg. 1 (1995-1996) at 62. 184 National Law Center for Inter-American Free Trade, pg. 7(1995)www.natlaw.com visited 6/13/06. 185 National Law Center for Inter-American Free Trade, Harmonization of the Secured Financing Laws of the NAFTA Partners: Focus on Mexico, 1995. Entire description of project taken from NLCIFT website at http://natlaw.com/pubs/purchase/harm.htm visited on 6/24/2006. 186 National Law Center for Inter-American Free Trade, Harmonization of the Secured Financing Laws of the NAFTA Partners: Focus on Mexico, 1995. Entire description of project taken from NLCIFT website at http://natlaw.com/pubs/purchase/harm.htm visited on 6/24/2006. 187 National Law Center for Inter-American Free Trade, Harmonization of the Secured Financing Laws of the NAFTA Partners: Focus on Mexico, 1995. Entire description of project taken from NLCIFT website at http://natlaw.com/pubs/purchase/harm.htm visited on 6/24/2006.

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understand, not only the black-letter law, but also the manner in which personal property secured transactions are handled in practice.188 Although the study is aimed at promoting reform efforts in Mexico, the information and analyses is useful for lawyers and bankers in the United States and Canada, particularly for those considering the extension of credit secured by personal property located in Mexico.189 Patrick Del Duca provides a detailed review of Mexico’s approach to the investment chapters of NAFTA and the overhaul of the Mexican Supreme Court that resulted from NAFTA.190 His analysis provides a useful illustration of the workings of the Mexican legal system, both contemporaneously and historically, and leads to a greater understanding of the Mexican approach to investment which constitutes greatly to the understanding of what it would take to harmonize the investment laws in North America. Tamar Frankel provides an in depth look at the field of securities law and the propensity of the field to adjust successfully to a transnational arena and efforts of harmonization.191 According to Frankel it is unlikely that the law of cross-border securitization will be enacted and enforced by a central international lawmaker any time soon, even though calls for such an institution have been heard. Instead, uniformity in international norms will probably emerge through mechanisms such as the International Monetary Fund, the World Bank, cooperating governments and regulators, regional markets seeking a more homogeneous institutional and legal infrastructure, bodies developing principles and models of law, and private agreements feeding customary laws that, like precedents, gain coercive momentum as that are replicated over time.”192 In a similar fashion, Kellye Testy encourages the Securities and Exchange commission in the United States to be “guided by policies that further integrate world markets and prevent the United States markets from being placed at a competitive disadvantage due to the stringency and over-zealous application of U.S. laws.”193 For a general overview of the history of global investment harmonization and bi-lateral investment treaties that act to harmonize global investment laws, see Kenneth Vandevelde.194

188

National Law Center for Inter-American Free Trade, Harmonization of the Secured Financing Laws of the NAFTA Partners: Focus on Mexico, 1995. Entire description of project taken from NLCIFT website at http://natlaw.com/pubs/purchase/harm.htm visited on 6/24/2006. 189 National Law Center for Inter-American Free Trade, Harmonization of the Secured Financing Laws of the NAFTA Partners: Focus on Mexico, 1995. Entire description of project taken from NLCIFT website at http://natlaw.com/pubs/purchase/harm.htm visited on 6/24/2006. 190 Patrick Del Duca, The Rule of Law: Mexico’s Approach to Expropriation Disputes in the Face of Investment Globalization, 51 UCLA L. Rev. 35 (2003). 191 Tamar Frankel, Cross-Border Securitization: Without Law, But Not Lawless, 8 Duke J. of Comp. & Int’l L. 255 (1998). 192 Tamar Frankel, Cross-Border Securitization: Without Law, But Not Lawless, 8 Duke J. of Comp. & Int’l L. 255 (1998) at 281-282. 193 Kellye Y. Testy, Comity and Cooperation: Securities Regulation in a Global Marketplace, 45 Ala. L. Rev. 927 (1994) at 958-59. 194 Kenneth J. Vandevelde, A Brief History of International Investment Agreements, 12 U.C. Davis J. Int’l L & Pol’y 157 (2005).

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6.13

TAX

Yariv Brauner aggressively calls for a world wide tax system that would “eliminate all international inefficiencies and assist all the nationals of the world in maximizing their relative advantages,” though acknowledging the prevailing thought that such a system is Utopian.195 Brauner cites several advantages of a harmonized global tax system including the reduced “arbitrage potential that may distort business decisions” and the reduction of “wasteful compliance and enforcement costs.”196

7.

TOWARDS A NORTH AMERICAN LAW There is nothing to preclude the governments of Canada, Mexico, and the United States from undertaking to negotiate harmonizing treaties to supplement the terms of the NAFTA.197 Frederick Abbott Different rights and obligations and different legal systems act as obstacles to the creation of a single market. The creation of a single market, therefore, requires the harmonization of legal systems. Thus, if a group of countries wishes to create a single market, the group must choose a single set of laws to govern their commercial relations.198 Bradly Condon 7.1

HARMONIZATION OF LAWS IN NORTH AMERICA

In his call for the harmonization of the legal systems of the NAFTA members in order to create the optimal environment for successful economic integration, Bradly Condon discusses in detail the variance among cultures of the people of North America and the effect he perceives these differences will have on legal harmonization.199 Patrick Glenn argues that because of the success of NAFTA as a free or common market, “with no measures having been taken to eliminate diversity of laws...it therefore appears impossible...to accept that a common market [like NAFTA] requires any formal measures of legal unification or harmonization whatsoever. There may be other reasons, political or cultural, for measures of legal unification or harmonization, but common market objectives do not require or justify them.”200 This position reiterates

195

Yariv Brauner, An International Tax Regime In Crystallization, 56 Tax L. Rev. 259 (2002-2003) at 259. Yariv Brauner, An International Tax Regime In Crystallization, 56 Tax L. Rev. 259 (2002-2003) at 263-64. 197 Frederick M. Abbott, Integration without Institutions: The NAFTA Mutation of the EC Model and The Future Of The GATT Regime, 40 Am. J. of Comp. L. 917 (1992) at 944. 198 Bradly Condon, NAFTA at Three-And-One-Half Yars: Where do we Stand And Where Should We Be Headed? A Cross Cultural Analysis of North American Legal Integration, 23 Can. U.S. L. J. 347 (1997) at 351-52. 199 Bradly Condon, NAFTA at Three-And-One-Half Yars: Where do we Stand And Where Should We Be Headed? A Cross Cultural Analysis of North American Legal Integration, 23 Can. U.S. L. J. 347 (1997) at 351-52 200 H. Patrick Glenn, North America as a Medieval Legal Construction, 2 Global Jurist Adv., (2002) at 5. 196

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Glenn’s belief articulated in a 2001 article that there is no need for a central policy of harmonization of laws in North America.201 A short mention of Mark Baker’s article No Country Left Behind: The Exportation of US Legal Norms Under the Guise of Economic Integration, should be made to highlight a dissenting position that behind any effort of economic integration or legal harmonization is an imperialistic agenda of the United States government to export their legal system as a way of imposing their values and beliefs on other cultures.202 7.2

FACILITATORS OF HARMONIZATION

Stephen Zamora presents several areas where he envisions progress in legal harmonization may be facilitated. First, he discusses the provisions that exist in almost every chapter of NAFTA for the establishment of committees, working groups, and technical assistance programs. According to Zamora, “some of these committees and working groups provide opportunities for experts, from both the government and private sector, to cooperate on matters related to domestic legal issues.”203 Next Zamora discusses other institutional channels for harmonization. “The NAFTA exercise generates the desire for increasing the formal and informal connections that exist between analogous agencies in each country.”204 NAFTA has also sparked renewed interest in hemispheric harmonization, and the efforts of the Inter-American Conference on Private International Law (CIDIP), an organ of the OAS. Private business will also have a potential impact on the harmonization of North American laws. “Even without institutional arrangements to promote harmonization, the spread of private business, through foreign investment and otherwise, is calculated to have a profound harmonizing effect on the development of the domestic legal systems in North America. As Canadian, Mexican and US companies expand in the NAFTA region, they attempt to implement the private law models that are important to their business. In doing so they influence the development of domestic laws and legal institutions.”205 Mistelis provides a good overview of the primary actors in global harmonization. He discusses international organizations such as the United Nations Commission on International Trade Law (UNCITRAL),206 the International Institute for the Unification of 201

H. Patrick Glenn, Conflicting Laws in a Common Market? The NAFTA Experiment, 76 Chi.-Kent L. Rev. 1789 (2001) at 1792. 202 Mark B. Baker, No Country Left Behind: The Exporting of US Legal Norms Under The Guise of Economic Integration, 19 Emory Int’l L. Rev. 1321 (2005). 203 Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 414. 204 Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 417-418. 205 Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) at 421. 206 See Jose Angelo Estrella Faria, The Relationship Between Formulating Agencies In International Legal Harmonization: Competition, Cooperation, or Peaceful Coexistence? 51 Loy. L. Rev. 253 (2005) (summarizing the activities of UNCITRAL and providing an excellent overview of the issues the organization faces in its efforts to harmonize international law).

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Private Law (UNDROIT), the Hague Conference on Private International Law, and the World Trade Organization (WTO) which use both hard and soft law means of harmonization as discussed above.207 Regional international economic integration organizations also contribute to the harmonization of law, most notably NAFTA for this review as discussed above, but also ASEAN, EC, MERCOSUR, OAS and the Organization for African Unity (OAU).208 A number of non-governmental international mercantile organizations or professional associations also attempt to unify and harmonize commercial law including, the ICC, the International Law Association (ILA), the International Bar Association (IBA), and the Comite Maritime International (CMI).209 These organizations often “promulgate model laws, model rules, standard contracts, or draft conventions.”210 “Finally, several other international organizations, such as the World Bank, the European Bank for Reconstruction and Development (EBRD), and the International Monetary Fund (IMF), demonstrated in a number of endeavours their interest in being involved in the lawmaking process or at least in the standard-setting. 7.3

INSTITUTIONS

Unlike the EU, the Architects of NAFTA intentionally opted for a free trade agreement, rather than a customs union, and this choice had a substantial impact on the degree of legal institutions that were created and the legal harmonization that resulted. There are two arguments with respect to the role institutions will play in the harmonization of North American law. On one side, Patrick Glen argues that “harmonization of private international law rules in the NAFTA countries has occurred through voluntary change – not imposed by a supranational organization – but spontaneously by independent national institutions, in order to respond to the NAFTA environment. In order to be in harmony, changes are made, but they are spontaneous and voluntary rather than imposed.”211 Thus, “the development of an international private law of contract may thus be a highly informal practice, based on a slow process of recognition of best practices.”212 He argues that a needs driven, pragmatic process, where particular subjects and particular needs of harmonization are identified, is “preferable to the creation of any permanent InterAmerican law reform agency.”213 “The ‘institutional meagreness’ of NAFTA may...be seen as an indication of continuing faith in the adaptability of federal structures and in

207

Loukas A. Mistelis, Regulatory Aspects: Globalization, Harmonization, Legal Transplants, and Law Reform – Some Fundamental Observations, 34 Int’l Law. 1055 (2000), at 1062. 208 Loukas A. Mistelis, Regulatory Aspects: Globalization, Harmonization, Legal Transplants, and Law Reform – Some Fundamental Observations, 34 Int’l Law. 1055 (2000), at 1062. 209 Loukas A. Mistelis, Regulatory Aspects: Globalization, Harmonization, Legal Transplants, and Law Reform – Some Fundamental Observations, 34 Int’l Law. 1055 (2000), at 1062. 210 Loukas A. Mistelis, Regulatory Aspects: Globalization, Harmonization, Legal Transplants, and Law Reform – Some Fundamental Observations, 34 Int’l Law. 1055 (2000), at 1062. 211 H. Patrick Glenn, Conflicting Laws in a Common Market? The NAFTA Experiment, 76 Chi.-Kent L. Rev. 1789 (2001) at 1799. 212 H. Patrick Glenn, Harmony of Laws in the Americas, 34 U. Miami Inter-Am. L. Rev. 223 (2003) at 241 213 H. Patrick Glenn, Harmony of Laws in the Americas, 34 U. Miami Inter-Am. L. Rev. 223 (2003) at 245-46.

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informal process of harmonization, and not simply as hostility or indifference to NAFTA objectives.”214 Glenn does support, however, an increased roll for non-governmental organizations in lieu of formal permanent institutions. “In the Americas there appears to be a clear role for the OAS in the development of [sic] legal instruments, either through the encouragement of industry-specific, and industry-articulated codes of conduct, or through more direct sponsorship of model laws or Restatement-like documents. The latter may also constitute, in some measure, ‘Prestatements’ of what the law should be. The authority of these informal statements of law increases the more they incorporate both practical and academic expertise they are examples of ‘grassroots’ or ;creeping’ codification. Their legal status is the object of discussion. They have strong ‘persuasive force,’ and have the advantage of being politically neutral and anational.. They are sufficiently flexible to allow for future development, and their persuasive character allows states to proceed at different rates of adherence.”215 On the other had, there are those, however, that argue North American Legal Harmonization must occur with the support of formal institutions. In this vein, AnneMarie Burley and Walter Mattli provide a detailed account of the European Court of Justice and the ways by which the justices of the ECJ lobbied and marketed the court to increase its jurisdiction and accountability.216 Marise Cremona also shares insight into the European systems as a comparison for North American harmonization. Cremona observed in the European context that “the creation of a dynamic system of law requires an institutional structure with decision-making powers, able to react to changing needs.”217 Noemi Gal-Or calls for an increase in institutions under NAFTA to provide the private party with greater access to NAFTA mechanisms, access, she argues, private parties currently don’t have and are therefore subrogated below the state.218 More descriptively, according to John Fitzpatrick, when discussing legal harmonization in North America, “three basic institutions with corresponding essential powers can be identified. These include: a decision-making mechanism created principally to facilitate legal harmonization and unification; a monitoring institution which provides surveillance and enforcement; and a judicial organ which ensures dispute resolution, uniform interpretation, and enforcement of substantive law.”219 Fitzpatrick defends the need for 214

H Patrick Glenn, Conciliation of Laws in The NAFTA Countries, 60 La. L. Rev. 1103 (2000) at 1105. H. Patrick Glenn, Harmony of Laws in the Americas, 34 U. Miami Inter-Am. L. Rev. 223 (2003) at 241. 216 Anne-Marie Burley and Walter Mattli, Europe Before the Court: A Political Theory of Regional Integration, 47 Int’l Org. 41 (1993). 217 Marise Cremona, the ‘Dynamic and Homogeneous’ EEA: Byzantine Structures and Variable Geometry, 19 EUR. L Rev. 508 (1994) at 509. 218 Noemi Gal-Or, Private Parrty Direct Access: A Comparison of the NAFTA and the EU Disciplines, 21 B.C. Int’l & Comp. L. Rev. 1 (1998). 219 John P. Fitzpatrick, The Future of the North American Free Trade Agreement: A Comparative Analysis of the Role of Regional Economic Institutions And the Harmonization Of Law In North America and Western Europe, 19 Hous. J. Int’l L. 1 (1996) at 23. 215

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these institutions by identifying their primary functions. “First, supranational courts are necessary for the settlement of disputes between contracting states concerning the substantive law of the regional area. Second, regional courts serve as a mechanism for insuring the uniform interpretation of regional law. Third, through dispute resolution and interpretation, regional courts apply and enforce regional norms.”220 Several authors have also gone so far as to propose specific institutions designed to facilitate the harmonization of law in North America. A selection of these proposed institutions are listed below. 7.3.1 North American Trade Tribunal (Appellate Tribunal) In a 1992 Report and Recommendation to the House of Delegates, the American Bar Association, Section of International Law, called for the establishment of a permanent dispute resolution institution.221 “What is essential here is there be constituted a permanent institution that can be called upon to deal promptly with interpretive issues whenever they arise...with jurisdiction with respect to disputes involving the interpretation and application of the North American Free Trade Agreement.”222 Further, the working group found it to be desirable for the “North American Trade Tribunal to be given power, upon request, to provide an opinion to a domestic court on the interpretation of particular provisions of the Agreement.”223 Unfortunately, the negotiators found the institution undesirable or politically damaging.224 Fitzpatrick echoes the call of the ABA for a North American Appellate Tribunal. For Fitzpatrick, the NAAT, “with the authority to hear appeals from panel decisions pursuant to the various NAFTA and side agreement dispute resolution mechanisms, would facilitate uniformity and coherence in the interpretation of regional norms...a tribunal of this nature could deliver binding opinions in the international sense without offending the sovereignty of national courts.”225 “A NAFTA Appellate Tribunal could also ‘provide an opinion to a domestic court on the interpretation of particular provisions of the agreement’ upon request.”226 220

John P. Fitzpatrick, The Future of the North American Free Trade Agreement: A Comparative Analysis of the Role of Regional Economic Institutions And the Harmonization Of Law In North America and Western Europe, 19 Hous. J. Int’l L. 1 (1996) at 90. 221 American Bar Association: Section of International Law, Section Recommendation and Report: Dispute Settlement Under A North American Free Trade Agreement, 26 Int’l Law 855 (1992). 222 American Bar Association: Section of International Law, Section Recommendation and Report: Dispute Settlement Under A North American Free Trade Agreement, 26 Int’l Law 855 (1992). 223 American Bar Association: Section of International Law, Section Recommendation and Report: Dispute Settlement Under A North American Free Trade Agreement, 26 Int’l Law 855 (1992). 224 John P. Fitzpatrick, The Future of the North American Free Trade Agreement: A Comparative Analysis of the Role of Regional Economic Institutions And the Harmonization Of Law In North America and Western Europe, 19 Hous. J. Int’l L. 1 (1996) at 91. 225 John P. Fitzpatrick, The Future of the North American Free Trade Agreement: A Comparative Analysis of the Role of Regional Economic Institutions And the Harmonization Of Law In North America and Western Europe, 19 Hous. J. Int’l L. 1 (1996) at 92. 226 John P. Fitzpatrick, The Future of the North American Free Trade Agreement: A Comparative Analysis of the Role of Regional Economic Institutions And the Harmonization Of Law In North America and Western Europe, 19

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7.3.2 North American Court of Justice According to Frederick Abbott, “for the United States to accept the notion of a North American Court of Justice with authority to overrule a decision of the U.S. Supreme Court would require a radical shift in the U.S. perception of its role in the global community.”227 That said, however, “there would be much to gain from the establishment among the United States, Canada and Mexico of regional political and judicial institutions with effective decision making authority.”228 7.3.3 North American Charter of Fundamental Rights Laura Spitz presents the concept of a North American Charter of Fundamental Rights in which the governments of Canada, Mexico, and the United States commit to a document which says “this is what we provisionally envision for ourselves, and this is what matters for us as an interdependent community.”229 “A North American Social Charter has the potential to reassert governmental sovereignty over corporate sovereignty, protect already achieved rights, introduce and enhance new rights shape the debate, and give us a coherent vision – or capital-P Plan – for our evolving North American community.”230 For Spitz the North American Social Charter would broadly state and guarantee “those rights and freedoms integral to human flourishing.”231 “A hopeful result of our North American Charter would be that people no longer need to move to acquire additional or different social rights and freedoms.”232 Spitz however relies on a different justification for the harmonization of laws in North America. “I do not propose harmonization in order to reduce transaction costs or to permit corporations to benefit from economies of scale. Rather, I am persuaded that unless there are some supranational powers of redistribution (so that capital can be put back in the communities impoverished by the present system), people are permitted to move where capital now moves freely (across the borders between Mexico, the United States, and Canada), definitions of family are consistent and consistently inclusive (so that tax and immigration laws can work to advance the substantive equality of self-

Hous. J. Int’l L. 1 (1996) at 92 (citing Henry T King, Jr., et al., Dispute Settlement Under the North American Free Trade Agreement, reprinted in 26 Int’l L. 855 (1992) at 863). 227 Frederick M. Abbott, Integration without Institutions: The NAFTA Mutation of the EC Model and The Future Of The GATT Regime, 40 Am. J. of Comp. L. 917 (1992) at 946. 228 Frederick M. Abbott, Integration without Institutions: The NAFTA Mutation of the EC Model and The Future Of The GATT Regime, 40 Am. J. of Comp. L. 917 (1992) at 946. 229 Laura Spitz, The Gift of Enron: An Opportunity To Talk About Capitalism, Equality, Globalization, And the Promise of a North American Charter of Fundamental Rights, 66 Ohio St. L. J. 315 (2005) at 359. 230 Laura Spitz, The Gift of Enron: An Opportunity To Talk About Capitalism, Equality, Globalization, And the Promise of a North American Charter of Fundamental Rights, 66 Ohio St. L. J. 315 (2005) at 396. 231 Laura Spitz, The Gift of Enron: An Opportunity To Talk About Capitalism, Equality, Globalization, And the Promise of a North American Charter of Fundamental Rights, 66 Ohio St. L. J. 315 (2005) at 328. 232 Laura Spitz, The Gift of Enron: An Opportunity To Talk About Capitalism, Equality, Globalization, And the Promise of a North American Charter of Fundamental Rights, 66 Ohio St. L. J. 315 (2005) at 373.

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defined family groupings), and there is nowhere in North American corporations can go to avoid labor laws and human rights, there will always be room for Enrons.”233 7.3.4 North American Bankruptcy Agreement David Cook explores the possibility of creating a North American Bankruptcy Agreement (NABA) in response to the inadequacy of the current laws to effectively resolve international insolvency problems.234 Cook details his plan for a NABA which he presents not as a uniform bankruptcy code or comprehensive choice of law scheme, but rather he argues the goals of clarity in the law and international cooperation can be reached through a more gentle agreement.235 Three of the element’s of Cook’s NABA include an automatic stay requirement (all proceedings against the debtor are stayed once the debtor files for bankruptcy in an nation), the automatic stay is in effect as long as the parties are engaged in good faith, private negotiations towards reaching a settlement, and an interest party may request resolution of a dispute by an arbitral panel and all panel decisions are binding on all parties.236 Sean Dargan supports David Cook’s proposal for a NABA, but is concerned the “reality of the historical, political, legal, linguistic and social ties suggests that Canada and the United States are more likely to enter into treaty with each other, rather to expose their citizens and corporations to Mexico and its unpredictable Ley de Quiebras y Suspension do Pagos (L.Q.S.P.).237 Rather, Dargan believes the Concordat mentioned above is a more pragmatic approach to transnational insolvency in north America and stands a better chance of acceptance.238

8.

Conclusion

Any discussion of a North American Law exists in a complex political and cultural environment. One element not discussed above, is the public perception of North American integration, whether it be legal, cultural, or economic. Robert Pastor in Towards a North American Community, tackles the challenges of integration and concludes that the public is in fact on the side of integration, and that it is now up to the leaders of the three countries to lead the way.239 According to Pastor, in North America, 233

Laura Spitz, The Gift of Enron: An Opportunity To Talk About Capitalism, Equality, Globalization, And the Promise of a North American Charter of Fundamental Rights, 66 Ohio St. L. J. 315 (2005) at 364. 234 David C. Cook, Prospects for A North American Bankruptcy Agreement, 2 Sw. J.L. & Trade Am. 81 (1995) at 84. 235 David C. Cook, Prospects for A North American Bankruptcy Agreement, 2 Sw. J.L. & Trade Am. 81 (1995) at 119. 236 David C. Cook, Prospects for A North American Bankruptcy Agreement, 2 Sw. J.L. & Trade Am. 81 (1995) at 120. 237 Dean Dargan, COMMENT, The Emergence of Mechanisms For Cross Border Insolvencies In Canadian Law, 17 Conn. J. Int’l L. 107 (2001) at 125. 238 Dean Dargan, COMMENT, The Emergence of Mechanisms For Cross Border Insolvencies In Canadian Law, 17 Conn. J. Int’l L. 107 (2001) at 120. 239 Robert A. Pastor, Toward a North American Community, Institute for International Economics, (Washington: 2001) at 189.

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“the underlying basis of a community exists. Provided people are not threatened by a loss of culture or identity, and incentives for productivity and improvements for standard of living are evident, the three peoples are ready to listen to ideas on how to combine in order to accomplish those ends.”240 It is the premise of this project on North American Legal Harmonization that Pastor’s assessment of the North American community is a valid one, and that one element critical to the realization of a North American Community is the harmonization of law. Though there are certainly obstacles in the path of progress, namely the diverse legal traditions and varying federalist sentiment, it is the position of this review that with strong leadership and an honest conveyance of the benefits of harmonization to the people of North America, the obstacles to legal harmonization may be overcome, and the journey to a North American Law will be successful. The question this review has tried to answer is therefore not whether North American legal harmonization will occur, but where, and how, and when. To answer the question of where legal harmonization will occur, part six of this review highlighted the most likely sectors, and any work or commentary that exists on their progress towards that goal. To answer the question of how legal harmonization will occur, part seven of the review illustrates two competing perspectives: institutional induced harmonization versus organic, natural harmonization, and presents both as valid alternatives to each other and catalysts of progress. What is not included here, however, and what cannot be prognosticated with any degree of accuracy is the answer to the “when” North American legal harmonization will occur. Some harmonization will invariably occur on its own, in the next several years, as corporations and industries act on their frustrations with redundant and costineffective regulatory environments and facilitate their own harmonization. Other sectors will no doubt take much longer. Culturally, the three countries, though converging, remain polarized on several key topics, and as such certain “sensitive” areas of the law such as the death penalty, abortion, and gay marriage, might well take much longer to harmonize. The title of this project, Towards a North American Law, insinuates a journey. It is the intent of this review to take the first step on that journey, and identify the obvious obstacles, and encouragements, of progress towards legal harmonization. Many more steps are needed on this journey – much more literature exists that was not covered – but it is the hope of the author that this review will provide a general perspective on the road ahead, and the inertia to begin the journey.

240

Robert A. Pastor, Toward a North American Community, Institute for International Economics, (Washington: 2001) at 164.

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TABLE OF AUTHORITIES CASES Currie v McDonald......................................................................................................................................................27 In re Everfresh Beverages et al v. Charterhous Group International, Inc. et al, 238 B.R. 558 (1999).........................32 Morguard Investments Ltd. V. De Savoye (1990), 3 S.C.R. 1077, 76 D.L.R. (4th) 256.............................................21

OTHER AUTHORITIES A. Kocourek, Sources of Law in the United States of North America and Their Relation To Each Other, 18 A.B.A. J. 676 (1932) ------------------------------------------------------------------------------------------------------------------------8 Adreas F. Lowenfeld, Binational Dispute Settlement Under Chapter 19 of the Canada-United States Free Trade Agreement: An Interim Appraisal, 24 N.Y.U. J. Int’l & Pol. 269 (1991) ---------------------------------------------- 22 African Association for a Unified System of Business Laws, OHAD: The Harmonization of Business Laws in Africa, 2005, www.ohada.com----------------------------------------------------------------------------------------------- 14 American Bar Association: Section of International Law, Section Recommendation and Report: Dispute Settlement Under A North American Free Trade Agreement, 26 Int’l Law 855 (1992) ------------------------------------------- 41 Amy D. Ronner and Dennis J. O’Connor, Good Fences Make Bad Neighbors: Is the North American Free Trade Agreement A Lie For Lawyers?, 32 U. Miami Inter-Am. L. Rev. 437 (2001)----------------------------------------- 18 Andrew J. Walker, Conflict of Laws Analysis for the Era of Free Trade, 20 Am. U. Int’l L. Rev. 1147 (2005) 14, 15, 22 Angel R. Oquendo, NAFTA’s Procedural Narrow Mindedness: The Panel Review of Antidumping and Countervailing Duty Determinations Under Chapter Nineteen, 11 Conn. J. Int’l L. 61 (1995) --------------------- 26 Angel R. Oquendo, The Comparative and the Critical Perspective in International Agreements, 15 UCLA Pac. Basin L.J. 205 (1997) ----------------------------------------------------------------------------------------------------------------- 25 Anne Nielsen et al., The Cross Border Insolvency Concordat: Principles to Facilitate the Resolution of International Insolvencies, 70 Am. Bankr. L. J. 533 (1996)------------------------------------------------------------------------------ 32 Anne-Marie Burley and Walter Mattli, Europe Before the Court: A Political Theory of Regional Integration, 47 Int’l Org. 41 (1993)--------------------------------------------------------------------------------------------------------------17, 40 Audrey Macklin, Disappearing Refugees: Reflections on the Canada-U.S. Safe Third Country Agreement, 36 Colum. Hum. Rts. L. Rev. 365, (2005)----------------------------------------------------------------------------------29, 30 Black's Law Dictionary (8th ed. 2004),----------------------------------------------------------------------------------------- 11 Brauner, An International Tax Regime In Crystallization, 56 Tax L. Rev. 259 (2002-2003) --------------------------- 37 C.G. Fenwick, The Inter-American Institute For International Legal Studies, 58 Am. J. Int’l L. 122 (1964)-----------7 Carolita L. Oliveros and Andre R. Jaglom, International Distribution Issues: Contract Materials: Options for Developing a Foreign Market, SK068 ALI-ABA 851, (2005) ----------------------------------------------------------- 33 Casey Burgess, Comment, An Anglo-NAFTA Union: Does it Make Sense?, 8-FALL L. & Bus. Rev. Am. 685 (2002)---------------------------------------------------------------------------------------------------------------------------- 10 Chris Wolfe and April A. Strahan, An Overview of the History of Foreign Legal Consultants Between The United States and Mexico, 47 S. Tex. L. Rev. 557 (2006) ------------------------------------------------------------------------ 18 Christopher D. Woodbury and Barbara L. Grossman, Recognition and Enforcement of U.S. Class Action Decisions in Canada, 35 Int’l News 15, American Bar Association Section of International Law, Winter 2006-------------- 27 Commission for Environmental Cooperation of North America, North American Environmental Law and Policy Series, Second Edit.¸ (Montreal, 2003) ------------------------------------------------------------------------------------- 28 Condon, NAFTA at Three-And-One-Half Years: Where do we Stand And Where Should We Be Headed? A Cross Cultural Analysis of North American Legal Integration, 23 Can. U.S. L. J. 347 (1997) ----------------------------- 37 Craig L. Jackson, Social Policy Harmonization and Worker Rights In the European Union: A Model for North America?, 21 N.C.J. Int’l L. & Com. Reg. 1 (1995-1996)------------------------------------------------------------34, 35 David C. Cook, Prospects for A North American Bankruptcy Agreement, 2 Sw. J.L. & Trade Am. 81 (1995)--32, 43 David M. Trubek et al., Global Restructuring and the Law: Studies of the Internationalization of Legal Fields and the Creation of Transnational Arenas, 44 Case W. Res. L. Rev. 407 (1994)------------------------------------------- 17 Dean Dargan, COMMENT, The Emergence of Mechanisms For Cross Border Insolvencies In Canadian Law, 17 Conn. J. Int’l L. 107 (2001)-----------------------------------------------------------------------------------------------32, 43 Douglas A. Doetsch and Aaron L. Hammer, Observations on Cross-Border Insolvencies and their Resolution in the NAFTA Region: Where are We Now?, 10 U.S.-Mex. L.J. 61 (2002) -------------------------------------------------- 31

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E. Thomas Sullivan, Antitrust remedies In the US and EU: Advancing A Standard Of Propostionality, 48 Antitrust Bulletin 377 (2003) ------------------------------------------------------------------------------------------------------------ 27 Edgardo Buscaglia, Intellectual Property Rights and Business Investment In Less Developed Countries, paper presented at “Conference on Vietnam in 2001: Prospects for Economic and Social Progress,” Washington DC, November 16-17 2001-----------------------------------------------------------------------------------------------------26, 34 Emilie Beavers, Note, Bankruptcy Law Harmonization in the NAFTA Countries: The Case of the United States and Mexico, 2003 Colum. Bus. L. Rev. 9565 (2003) -------------------------------------------------------------------------- 31 Enrique Lagos, The Coexistence of Legal Systems in the Americas from and OAS Perspective, Paper presented at the University of Ottawa, October 20, 2000, during a panel on “Evolution des Systemes Juridiques et Mondialisation.” ------------------------------------------------------------------------------------------------------------ 7, 10 Eric J. Pan, Assessing the NAFTA Chapter 19 Binational Panel System: An Experiment In International Adjudication, 40 Harv. Int’l L. J. 379 (1999) ------------------------------------------------------------------------------ 22 Federal Judicial Center, International Insolvency, 2001---------------------------------------------------------------------- 33 Frederic J. Moll, The Legal & Technological Advantages of a North American Perimeter In The War Against Terrorism: How The Implementation Of A Schengen-Type System Will Best Serve The Security Interests Of The United States And Canada, 204 Syracuse Sci. & Tech. L. Rep. 2 (2004) ---------------------------------------------- 30 Frederick M. Abbott, Integration without Institutions: The NAFTA Mutation of the EC Model and The Future Of The GATT Regime, 40 Am. J. of Comp. L. 917 (1992) -----------------------------------------------------------3, 37, 42 Gary C. Hufbauer & Jeffery J. Schott, North American Free Trade: Issues and Recommendations 185 (1992) ----- 33 Gary Clyde Hufbauer, Institute for International Economics, Remarks at the annual policy conference of the Canadian Association for Business Economics, Washington, DC, March 30, 2001 ------------------------------22, 23 Geoffrey Garrett et al., The European Court of Justice, National Governments, and Legal Integration in the European Union, 52 Int’l Org. 149 (1998)---------------------------------------------------------------------------------- 17 Geoffrey Garrett, The Politics of Legal Integration In the European Union, 49 Int’l Org. 171, (1995) ---------------- 17 H Patrick Glenn, Conciliation of Laws in The NAFTA Countries, 60 La. L. Rev. 1103 (2000)------------------------ 40 H. Patrick Glenn, Harmony of Laws in the Americas, 34 U. Miami Inter-Am. L. Rev. 223 (2003) -- 8, 15, 18, 28, 39, 40 H. Patrick Glenn, North America as a Medieval Legal Construction, 2 Global Jurist Adv., (2002)- 11, 12, 18, 21, 28, 37 Harold Burnam, Private International Law, 31 Int’l Law 685 (1997) ------------------------------------------------------ 34 Harry W. Arthurs and Robert Kreklewich, Law, Legal Institutions, and the Legal Profession in the New Economy, 34 Osgoode Hall L. J. 1 (1996) ---------------------------------------------------------------------------------------------- 18 Henry T King, Jr., et al., Dispute Settlement Under the North American Free Trade Agreement, reprinted in 26 Int’l L. 855 (1992) ------------------------------------------------------------------------------------------------------------------- 42 Humberto Celis Aguilar Alvarez, The North American Free Trade Agreement’s Impact on the Development of Mexican Environmental Law, 81 U. Det. Mercy L. Rev. 411 (2004)--------------------------------------------------- 20 International Bar Association, Cross-Border Insolvency Concordat, downloaded from the International Insolvency Institute www.iiiglobarl.org June 5, 2006 ---------------------------------------------------------------------------------- 32 Jack I. Garvey, Current Development: Trade And The Quality of Life – Dispute Resolution Under the NAFTA Side Accords On Labor and The Environment, 89 A.J.I.L. 439 (1995) --------------------------------------------------23, 24 James Brown Scott, The Gradual and Progressive Codification of International Law, 21 Am. J. of Int’l L. 417 (1927) --------------------------------------------------------------------------------------------------------------------------------------6 James F. Rill and Mark C Schecter, International Antitrust and Intellectual Property Harmonization of the Interface, 34 L. & Policy in Int’l Bus. 783 (2003) ------------------------------------------------------------------------------------- 27 Jay Lawrence Westbrook, A Global Solution to Multinational Default, 98 Mich. L. Rev. 2276 (2000)--------------- 31 Jay Lawrence Westbrook, Creating International Insolvency Law, 70 Am. Bankr. L.J. 563 (1996) ------------------- 31 John P. Fitzpatrick, The Future of the North American Free Trade Agreement: A Comparative Analysis of the Role of Regional Economic Institutions And the Harmonization Of Law In North America and Western Europe, 19 Hous. J. Int’l L. 1 (1996)------------------------------------------------------------------------------------ 15, 19, 40, 41, 42 Jorge A. Vargas, An introductory Lesson To Mexican Law: From Constitutions And Codes to Legal Culture and NAFTA, 41 San Diego L. Rev. 1337 (2004) ------------------------------------------------------------------------------- 10 Jose A. Cabranes, The Inter-American System: Its Development and Strengthening, Oceana Publications, BOOK REVIEW, 16 Int’l & Comp. L. Qt. 563 (1967). -----------------------------------------------------------------------------6 Jose Angelo Estrella Faria, The Relationship Between Formulating Agencies In International Legal Harmonization: Competition, Cooperation, or Peaceful Coexistence? 51 Loy. L. Rev. 253 (2005) ----------------------------------- 38

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Julie Mertus and Elizabeth Breier-Sharlow, Power, Legal Transplants and Harmonization, 81 U. Det. Mercy L. Rev. 477 (2004) ---------------------------------------------------------------------------------------------------------------------- 26 Kellye Y. Testy, Comity and Cooperation: Securities Regulation in a Global Marketplace, 45 Ala. L. Rev. 927 (1994) at 958-59---------------------------------------------------------------------------------------------------------------- 36 Kenneth J. Vandevelde, A Brief History of International Investment Agreements, 12 U.C. Davis J. Int’l L & Pol’y 157 (2005) ---------------------------------------------------------------------------------------------------------------------- 36 Kurt H. Nadelmann, Ignored State Interests: The Federal Government and International Efforts to Unify Rules of Private Law, 102 U. Pa. L. Rev. 323 (1954)----------------------------------------------------------------------------5, 6, 7 Laura Spitz, At the Intersection of North American Free Trade and Same Sex Marriage, 9 UCLA J. Int’l L. & Foreign Aff. 163 (2004)------------------------------------------------------------------------------------------18, 19, 25, 29 Laura Spitz, The Gift of Enron: An Opportunity To Talk About Capitalism, Equality, Globalization, And the Promise of a North American Charter of Fundamental Rights, 66 Ohio St. L. J. 315 (2005)--------------- 30, 42, 43 Leonard Bierman and Rafael Gely¸ NAFTA at Age One: A Blueprint For Hemispheric Integration?: I. The Labor Side Agreement: The North American Agreement on Labor Cooperation: A New Frontier In North American Labor Relations, 10 Conn. J. Int’l L. 533 (1995) -------------------------------------------------------------------------- 23 Leonard Bierman and Rafael Gely¸ The North American Agreement on Labor Cooperation: A New Frontier In North American Labor Relations, 10 Conn. J. Int’l L. 533 (1995) ------------------------------------------------------ 24 Leslie A. Burton, Toward an International Bankruptcy Policy In Europe: Four Decades In Search Of A Treaty, 5 Ann. Surv. Int’l & Comp. L. 205 (1999)------------------------------------------------------------------------------------ 32 Lori M. Wallach, Accountable Governance in the Era of Globalization: The WTO, NAFTA, and International Harmonization of Standards, 50 U. Kan. L. Rev. 823 (2002), ----------------------------------------------------------- 25 Loukas A. Mistelis, Regulatory Aspects: Globalization, Harmonization, Legal Transplants, and Law Reform – Some Fundamental Observations, 34 Int’l Law. 1055 (2000) ---------------------------------------------------------------- 5, 39 Luis Rubio, Mas Alla del Tratado, La Jornada (Mexico City), Sept. 26, 1992, at 10 (translation by Stephen Zamora in The Americanization of Mexican Law: Non-Trade Issues In the North American Free Trade Agreement, 24 Law & Pol’y Int’l Bus. 391 (1993) ------------------------------------------------------------------------------------------ 21 Marise Cremona, the ‘Dynamic and Homogeneous’ EEA: Byzantine Structures and Variable Geometry, 19 EUR. L Rev. 508 (1994) ---------------------------------------------------------------------------------------------------------------- 40 Mark B. Baker, No Country Left Behind: The Exporting of US Legal Norms Under The Guise of Economic Integration, 19 Emory Int’l L. Rev. 1321 (2005) -------------------------------------------------------------------------- 38 Michael Traynor, Conflict of Laws, Comparative Law, and the American Law Institute, 49 Amer J. of Comp. Law 391 (2001) ------------------------------------------------------------------------------------------------------------------12, 33 Michael Wallace Gordon, Economic Integration In North America: An Agreement of Limited Dimensions but Unlimited Expectations, 56 Mod. L. Rev. 157 (1993) -------------------------------------------------------------------- 28 Muna Mdulo, Harmonization of Trade Laws In The African Economic Community, 42 Int’l & Comp. L.Q. 101 (1993)------------------------------------------------------------------------------------------------------------------------------3 National Law Center for Inter-American Free Trade, Harmonization of the Secured Financing Laws of the NAFTA Partners: Focus on Mexico, 1995 ----------------------------------------------------------------------------------------35, 36 National Law Center for Inter-American Free Trade, Transshipment and other threats to the enforcement of Intellectual Property Rights in Canada and Mexico (2004) -------------------------------------------------------------- 33 Noemi Gal-Or, Private Party Direct Access: A Comparison of the NAFTA and the EU Disciplines, 21 B.C. Int’l & Comp. L. Rev. 1 (1998) ---------------------------------------------------------------------------------------------- 15, 20, 40 Patricia Isela Hansen, Judicialization and Globalization in the North American Free Trade Agreement, 38 Tex. Int’l L.J. 489 (2003) -------------------------------------------------------------------------------------------------------------20, 23 Patrick Del Duca, The Rule of Law: Mexico’s Approach to Expropriation Disputes in the Face of Investment Globalization, 51 UCLA L. Rev. 35 (2003) -------------------------------------------------------------------------------- 36 Paul R. Dubinsky, Human Rights Law meets Private Law Harmonization: The Coming Conflict, 30 Yale J. Int’l L. 211 (2005) ---------------------------------------------------------------------------------------------------------------------- 29 Pierter H.F. Bekker, The Use of Non-Domestic Courts For Obtaining Domestic Relief: Jurisdictional Conflicts Between NAFTA Tribunals And U.S. Courts? 11 ILSA J. Int’l & Comp. L 331 (2005)----------------------------- 12 Pottow, Procedural Incrementalism: A Model For International Bankruptcy, 45 VAJIL 935 (2006) ------------------ 32 R. Buxbaum & K. Hopt, Legal Harmonization And The Business Enterprise (Walter de Gruyter ed., 1988) -------- 18 R. Goode, International Restatements and National Law, in The Search for Principle [:] Essays in Honour of Lord Goff of Chievely, (W. Swadling & G. Jones ed., Oxford 1999) --------------------------------------------------------- 18 Robert A. Pastor, Toward a North American Community, Institute for International Economics, (Washington: 2001) -----------------------------------------------------------------------------------------------------------------------14, 15, 43, 44

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Robert M. Kossick, Jr., Litigation In The United States And Mexico: A Comparative Overview, 31 U. Miami InterAm. L. Rev. 23 (2000) -------------------------------------------------------------------------------------------------------- 29 Sandile Khumalo, International Response to the UNCITRAL Model on Cross-Border Insolvency, International Insolvency Institute, 2004, www.iiiglobal.org ----------------------------------------------------------------------------- 32 Scott R. Jablonski, NAFTA Chapter 11 Dispute Resolution and Mexico: A Healthy Mix of International Law, Economics and Politics, 32 Denv. J. Int’l L. & Pol’y 475 (2004) ------------------------------------------------------- 20 Stephen Zamora, Allocating Legislative Competence in The Americas: The Early Experience Under NAFTA And The Challenge Of Hemispheric Integration, 19 Hous. J. Intl’l L 617 (1997) --------------------------------------------9 Stephen Zamora, NAFTA and the Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) ------------------------------------------------------------------------- 7, 8, 19, 24, 38 Stephen Zamora, NAFTA and The Harmonization of Domestic Legal Systems: The Side Effects of Free Trade, 12 Ariz. J. Int’l & Comp. L. 401 (1995) ---------------------------------------------------------------------------------------- 22 Stephen Zamora, The Americanization of Mexican Law: Non-Trade Issues In the North American Free Trade Agreement, 24 Law & Pol’y Int’l Bus. 391 (1993)-----------------------------------------------------------------9, 33, 34 Tamar Frankel, Cross-Border Securitization: Without Law, But Not Lawless, 8 Duke J. of Comp. & Int’l L. 255 (1998)---------------------------------------------------------------------------------------------------------------------------- 36 United States Department of State, European Union Profile, Fact Sheet: Bureau of European and Eurasian Affairs, Washington, DC, May 25, 2006 http://www.state.gov/p/eur/rls/fs/54126.htm ---------------------------------------- 16 William W. Burke-White, A Community of Courts: Towards a System of International Criminal Law Enforcement, 24 Mich. J. Int’l L. (2002) ---------------------------------------------------------------------------------------------------- 28 William W. Burke-White, Regionalization of International Criminal Law Enforcement: A Preliminary Exploration, 38 Tex. Int’l L.J. 729 (2003) ------------------------------------------------------------------------------------------------- 27 Ysolde Gendreau, Copyright Harmonization in the European Union and In North America, 20 Colum.-VLA J. L. & Arts 37 (1995-1996) ----------------------------------------------------------------------------------------------------------- 34 Yvonne N. Gierczyk, The Evolution of the European Legal System: The European Court of Justice’s Role In the Harmonization of Laws, 12 ILSA J. Int’l & Comp. L. 153 (2005). ----------------------------------------------------- 16

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Towards a North American Law a Literature Review