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2008

A Proposal for a Borderland Dispute Settlement
Continuum Mechanism
Noemi Gal-Or
Kwantlen Polytechnic University

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Original Publication Citation
Gal-Or, N. (2008). A Proposal for a Borderland Dispute Settlement Continuum Mechanism Canadian Political Science Review, 2(2).

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The Canadian Political Science Review Vol 2(2) June 2008

A Proposal for a Borderland Dispute Settlement
Continuum Mechanism
Noemi Gal‐Or (Kwantlen Polytechnic University)1

Abstract
The malaise felt by both Canadians and Americans regarding several areas of
trade does not exist in a vacuum. It is not difficult to surmise that besides the
genuine tension owing to actual implementation of liberal trade principles in the
trade practise between the two states, and to their diverging interpretations of
these principles, lies also some political opportunism. Not only has the US
pursued a unilateralist course in its trade relations with Canada; it did so also in
matters security, which have created, at least a perception, of an unfavourable
impact on Canadian economic interests. The US current beleaguered
international reputation in matters foreign policy regarding both security and
economic issues may therefore tilt the pendulum in Canada’s favour. From a
power contest point of view, perhaps now is the time and opportunity for
Canada to reap also international “moral” (juridical), in addition to economic,
gains.

Introduction
This paper arises against the backdrop of growing litigiousness in international economic
relations, and particularly between two old friends, Canada and the United States (US).1 Only a
few months after the resolution of the Softwood Lumber Dispute, two new issues are
potentially following on its heals: Canada’s request for World Trade organisation (WTO)
agricultural consultations with the US, and the specific place within it for Canada’s corn
producers. The malaise felt by both Canadians and Americans regarding several areas of trade
does not exist in a vacuum. It is not difficult to surmise that besides the genuine tension owing
to actual implementation of liberal trade principles in the trade practise between the two states,
and to their diverging interpretations of these principles, lies also some political opportunism.
Not only has the US pursued a unilateralist course in its trade relations with Canada; it did so
also in matters security, which have created, at least a perception, of an unfavourable impact on
Canadian economic interests. The US current beleaguered international reputation in matters
foreign policy regarding both security and economic issues may therefore tilt the pendulum in

1

Noemi Gal‐or Director, Institute for Transborder Studies & Prof., Department of Political Science
nd
Kwantlen PolytechnicUniversity, 12666‐72 Ave., Surrey, B.C., Canada V3W 2M8 noemi.gal‐
or@kwantlen.ca

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The Canadian Political Science Review Vol 2(2) June 2008
Canada’s favour. From a power contest point of view, perhaps now is the time and opportunity
for Canada to reap also international “moral” (juridical), in addition to economic, gains. This
paper, which is limited to the effect of political and legal institutionalisation of borderland
economic regimes, may consequently be just in time.
Canada and the US are parties to the Canada‐US Free Trade Agreement and to the successor
North American Free Trade Agreement (NAFTA). As the titles of the agreements suggest, the
regime established in them is free trade, which represents the lowest common denominator on
the economic integration spectrum. In free trade, trade ‐ and in the NAFTA investment also ‐ are
taking exclusive primacy over any other concerns (e.g. the environment and labour, which were
addressed in side agreements precisely in order to relegate them to the margins). Canada and
the US are also members of the WTO. Their recourse to the justice mechanisms of both the
WTO and the NAFTA, concerning the same disputes, resulted in conflicting decisions by the
respective tribunals and reflected a flaw in the overall legal and justice design where forum
shopping is encouraged and facilitated.
In the larger scheme of things, it is common knowledge that the WTO is currently in a deadlock.
In fact, the Doha Round has been stalled precisely due to the developed‐developing countries’
disagreement in matters market access and trade in agriculture. What appear to have remained
operative are the Dispute Settlement Understanding (DSU) and its Dispute Settlement Body
(DSB), carrying on as if in a separate sphere from the rest of the WTO body. Moreover, as we
know, Canada has been pushing for improvements of the still developing WTO adjudicative
mechanism. While generally appreciative of the WTO DSU, experience has brought to the fore
“certain deficiencies in the rules and procedures that may impede”2 the objective of this part of
the WTO agreement. This has prompted Canada to submit proposals for improvements to the
DSU, which address its concerns regarding the treatment of business confidential information;
the panel selection process; and transparency. The two latter clearly represent public policy and
public good concerns. These efforts however, similar to the rest of the Doha Round
negotiations, have also been suspended as part of the Doha Round stasis.
So why would Canada initiate new dispute settlement3 procedures at this time? To be sure, one
would expect that since the Canada‐US Free Trade Agreement (CUSFTA, 1989) and the North
American Free Trade Agreement (NAFTA, 1994), both states would be more, not less, inclined to
resolve contentious issues by means of bilateral negotiations, or at least through the more
tailor‐cut regional dispute settlement mechanisms. In the wake of the conclusion of the almost
perennial softwood lumber dispute, the slate would have seemed to be cleared for renewed
bona fide bilateralism. Yet, as never before, there seems to be a “momentum” of litigiousness
reigning in the Canada‐US economic relations. And most interesting about this is that Canada
had chosen to initiate precisely a WTO (multilateral) rather than a NAFTA (bilateral‐regional)
dispute proceeding in its efforts to enforce free trade. Is the WTO DSU mechanism more
attractive than the NAFTA one?4 NAFTA Article 705: Export Subsidies5 lays down a specific
organisational structural plan, namely a Working Group on Agricultural Subsidies designed to
work toward the elimination of all export subsidies affecting the Parties’ agricultural trade
relations. So why is Canada availing itself of the WTO route?
One of the answers may lie in the mindset of those involved in trade (politicians, governments,
stakeholders including the legal profession, accountants, business, and not the least, academia).
Since the idea of regional integration is relatively novel in North America, and moreover ‐ still
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The Canadian Political Science Review Vol 2(2) June 2008
very controversial – balancing the pro and con of “going NAFTA” versus “going WTO” is not
surprising. It is precisely at this backdrop that I am suggesting to consider a shift in gear and
think out of the proverbial box. Therefore, in the time remaining, I will address the political
governance and institutional framework conditions necessary for adjudicative innovation. I will
follow with a proposal for a continuum based alternative model of adjudicative dispute
settlement in North America incorporating the prevailing mechanisms and coupled with a tailor
cut borderland component and an adjusted WTO regional DSB branch. This model is therefore
not exclusive of the other models; rather, it forms part of an integrated procedural dispute
resolution continuum embedded in a hierarchical institutional order, and available to voluntary
members.

Multi‐level governance and multi‐level dispute settlement
The process of economic globalisation has been effecting political and legal developments,
altering the way and nature of private‐public, public‐public, and private‐private relations. The
arenas within which these relations are taking place have been growing in number with a
laddering of international, regional, and nationals levels of public policy making and legal
arrangements, each enjoying some level of autonomy. As well, the processes occurring within
these arenas have been transforming concurrently. While enabling more private‐private
relations, the public‐public rapport has also been diversifying with an increasing variety of
processes comprising of multilateral versus more limited regional, and bilateral negotiations.
The different combinations of arena and process, and private and public relations, have
produced new economic and legal regimes referred to as convergent, de‐bordering, multi‐level
governance, etc. At the same time, a counter‐reaction to the real or perceived loss of traditional
control by the national jurisdiction has been registered, leading to counter‐globalisation
tendencies and referred to as the de‐globalisation process. Regardless of the debate whether
globalisation is continuing or reversing, one arena which has constantly remained relatively
marginalised throughout this pendular movement is the borderland.
In reality, the borderland represents a region replete with private‐private, private‐public, and
public‐public interactions, garnering the attention of business, yet failing to sincerely attract the
attention of policy makers or academia; it has continued to figure as an object subordinate to
the national, regional, and international levels of policy. This oversight concerning the
importance of the borderland may have to do with a top down mindset so typical of politics, but
contradictory of the business approach. In fact, the inter‐national borderland, which represents
the physically most tangible interface between national jurisdictions, is also the smallest and
lowest micro‐level policy making in inter‐“Nation‐State” relations. Yet, unlike the regional and
inter‐national levels of governance, politics at the borderland have not yet become sufficiently
institutionalised to earn this epithet. Based on the many insights gained from both the
experience and theory of regionalism, there is however no reason to oversee the value of the
borderland.

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The public good approach
The public good approach offers a good as any, and perhaps more succinct, way to incorporating
the borderland in public policy considerations. Publicness defined as comprising of nonrivalry of
benefits,6 nonexcludability of nonpayers,7 and aggregation of technologies,8 are identified as
important for the prognosis of provision of regional public goods (RPG). (Sandler 5) The
approach, which is specifically designed to address the role of international organisations in
encouraging supply of public goods in developing countries, is equally useful for the discussion
of the borderland also in developed countries for two reasons. First, it is embedded in the broad
level‐of‐governance perspective for it distinguishes in addition to the RPG, also the transnational
public good (TPG), the global public good (GPG), and the national public good (NPG) as related
to market globalisation and technology. This in itself is a good reason to test the usefulness of
the notion of borderland public good (BPG) as a new and complementary public policy analytical
tool.
Second, this public good approach, which applies to a variety of generally independent types of
public goods, e.g. health, environment, transportation, communication, and security oversees
another kind of public good, which is of common importance to all those addressed, namely
justice (law, rules, regulations, dispute settlement, etc.). Arguably, the same proposition in
favour of RPGs over GPGs as well as those inhibiting RPGs compared to GPGs are valid also
regarding BPGs. (Sandler 15) Similar to the regional level, even more accentuated at the
borderland level, are the supportive arguments. These include the limited number of
participants, spatial and cultural proximity which mitigate uncertainty, availability of regional
trading blocs as accommodating necessary infrastructure, favourable characteristics of
publicness, and a history of, and future for, interaction at the borderland level.
A corollary to the level‐of‐governance approach is the concept of subsidiarity, which plays an
important role also in the public good approach. Subsidiarity, which represents the principle
that the decision‐making jurisdiction coincides with a region’s public good, and which has been
“invented” in the process of European integration, applies equally to the smaller components
within the region, including the borderland. “Localized regional benefits increase the evolution
of regional institutions from shared culture, norms, concerns, experiences, and values.”9
Subsidiarity is valuable under certain conditions, among other things, when it bolsters
interregional innovation and avoids “‘mission creep’ of multilateral institutions” (Sandler 17).
Applied to Cascadia,10 this advantage supports the development of Cascadia specific institutions,
for instance, the dispute settlement facilitation project proposal developed but yet to be
implemented, by the Pacific Northwest Economic Region (PNWER) Private Council, and the
proposal for a small claims court. (Gal‐Or 2002) On the other hand, subsidiarity is constraining
where economies of scale and scope are involved. (Sandler 17). This would justify setting up a
regional WTO office11 including a DSB branch at the regional level, which would be available to
serve also borderland interests where they are affected by larger economies of scale and scope.
Indeed, in the case of Cascadia, all the “provision of public good factors” apply and they may be
couched within the broader NAFTA and WTO framework, where necessary. The inhibiting
factors, which include absence of donor spillovers due to the borderland specifity of benefits;
absence of a leader nation; rivalries and local conflicts; uncertainty due to lack of information;
lack of global culture of support for the borderland initiatives and resultant lack of capacity; past
disappointments; and absence of entities to offer security on investments – all are either of
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negligible significance, if any at all, in the striving economy of Cascadia, or can be bridged and
materialised provided there is sufficient good will. Some seeds reducing or countering these
possible disadvantages have already been sawn and are persisting as, for example, in the
institution of the PNWER. This and similar local endeavours provide a solid beginner foundation
for the development and adoption of a BPG approach. (Gal‐Or 2002) Paraphrasing on Sandler,
(15) in an ideal world, borderland institutions will coordinate its member nations to supply BPG.

The borderland public good approach implemented
“Knowledge is the quintessential […] public good”, (Sandler 20) and any knowledge, including
region‐specific knowledge, “also represents an intergenerational public good that provides
nonrival benefits to the current and future generations.” (Sandler 21) Knowledge is indeed the
asset that borderland regions have been capitalising on to build institutions designed to further
develop for the BPG. In this section, several European borderland initiatives capitalising on
borderland specific knowledge and their incorporation within the European Union (EU) will be
juxtaposed with their North American counterparts embedded within the NAFTA. Borderland
specific knowledge encourages communication, which is conducive to the resolution of
disagreements even before they develop into disputes, and in diffusing disputes that
transcended the confines of mere disagreements. It saves recourse to quasi‐litigious and
litigious proceedings. European experience in this area is therefore valuable also for the NAFTA
region.

Europe
Six European borderland regions provide a persuasive example for the potential benefit
borderland communities expect to accrue from enhanced cooperation. In the region comprising
the jurisdictions of the province Luxemburg in the Walloon region of Belgium, Lorraine in
France, and the Grand Duchy of Luxemburg – the agglomeration known as Pôle Européen
Dévelopment (P.E.D.) was established, by the respective governments, in a top‐down approach
“to seek common regional political solutions”.12 Bottom‐up inducement was however required
to turn this initiative into the 1997 formation of La Grande Région, consisting of six regions and
adding the counties of Saarland and Rheinlandpfaltz in Germany, and the German speaking part
of Belgium to the original three constituent national members. This borderland region of over
11 million inhabitants is an institutionalised entity: Each 18 months a summit of governmental
heads convenes, assisted in‐between summits by various bodies, including a committee for
economic and social matters. (Facts & Experience 9)
The region comprising all of Northern Ireland and certain areas in the provinces of Connacht,
Leinster, and Ulster in the Republic of Ireland encompasses a population of 2 million. It was
formed in the Good Friday Agreement of 1998 to address various issues ranging from farming,
to tourism and transportation. The region was institutionalised at the government level as The
North/South Ministerial Council. (Facts & Experience 13).
Flesnburg, Northern Friesland County and Schleswig‐Flensburg County in the region of Schleswig
in Germany and South Jutland County in Denmark, with 700,000 inhabitants, makes the smallest
populated region among those reviewed here. It is run by a joint Regional Council of 42
members (21 on each sides) and three observers, representing a mix of politicians and
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stakeholders including two national minority groups. It convenes 6‐8 times a year and comprises
of six political committees representing different areas in the broad spectrum of issues for
borderland cooperation. (Facts & Experience 27, 29).
The Euregio Maas Rijn is a tri‐national borderland region comprising the regions/provinces of
the German speaking Limburg and Liège in Beligum, Southern Limburg in The Netherlands, and
Aachen in Germany. Cooperation within this region of 3.7 million inhabitants addresses a wide
scope of issues ranging from culture to finance to physical planning and more. The region
displays its institutionalisation through the Euregio Council established in 1995, which is
organised in a two‐chamber structure bringing together politicians and stakeholders, wherein an
important role has been played by the business sector. A higher level of institutionalisation
would be achieved if and when the Council transformed into what it hoped to be ‐ a transborder
agency. (Facts & Experience 18, 20) Here, the business sector also cooperates with the local
academic institutions in matters research and development.
In the Øresund Region, politicians have started to actively pursue crossborder cooperation since
1993 in what was a top‐down approach later widening to include also bottom‐up initiatives. Yet,
it is still being lead from the top. It totals a constantly growing population currently numbering a
population of 3.6 million. The region comprises of the counties and cities on both sides of the
Capital region of Denmark and regions of Skåne in Sweden. Being institutionalised, the region is
run by the Øresund Committee meeting 4 times a year, and assisted by a secretariat.13
Transportation, health, and academic cooperation are some of the many issues of cooperation
in the Øresund Region which identifies its main strategic objectives to be the promotion of
sustainable economic growth, daily integration (including interaction between rules and
systems), and connecting the region.
Finally, the Upper‐Rhine region of Alsace in France, the Cantons of Basel Stadt, Basel Land, and
Aargau in Switzerland, and the Land of Baden‐Wuertemberg and the region of Sued‐Pfalz in
Germany form perhaps the most developed borderland region not only in Europe but in the
entire world. The tri‐national area is home to 5.7 million people and has enjoyed a long history
of cooperation. Two major organisations devoted to the tri‐national region at large are the
Upper‐Rhine Conference and the Regio TriRhena, which are complemented by several other
bodies. Here too, cooperation encompasses the business sector, educational stakeholders, and
other players. (Facts & Experience 23‐24)
Any comparison with other non‐European borderland regions immediately underlines the
advantage enjoyed by the European borderland regions. Surely, the latter have been benefiting
from unprecedented supportive conditions and circumstances as enabled by the European
integrative process. Seen from a BPG analytical perspective, most of the downsides arising in the
comparison between RPG and GPG have been mitigated – at the analytical comparable level of
RPG versus BPG ‐ in the European case. For one, subsidiarity has been a European integrative
initiative; has been demanded by the local regions within the member states; and proven to
function well within the European supra‐ and inter‐governmental edifice. Moreover, the EU
provides for wider regional institutional frameworks and processes within which the smaller
borderland initiatives may find anchor and support; the EU has developed programs specifically
oriented to encourage such cooperation in the context of its cohesion and regional policies; and
set up respective institutional bodies and processes.14 And above all, the EU has provided a well‐
founded legal and justice framework facilitated by now two well established courts ‐ the Court
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of First Instance and the European Court of Justice. The European Court of Human Rights (of the
Council of Europe) is complementing this system as well as other sector specific adjudicative
administrative bodies.
It is therefore not surprising that “[o]n a European level, there are growing expectations for
border regions being dynamos for growth and for implementing the single market, and for
cooperation across borders being a model for integration in the entire European Union”.
(Øresund Region) Strengthening the profile of the borderland region in the European capital is
where the prognosis regarding the provisions BPG, RPG, TPG, GPG, and NPG coincide. Important
to note is the fact that in the most developed region ‐ the Upper‐Rhine ‐ partnership with
Switzerland, which is not a member of the EU was not blocked by the difference in legal and
justice systems. Switzerland and the EU have maintained a tradition of bilateral cooperation well
prior to their cooperation agreement of 2002, which further cemented this relationship. All
these are absent in the NAFTA. But then, the history of the Canada‐US relations (and US‐Mexico,
for that matter) represents a unique case in itself, different from the European experience.
Consequently, the NAFTA parties will do better to learn from the European institution building
process, rather than emulate either process or institutions.
Despite the process of European integration, the borderland regions are still facing various
legislative barriers in many areas. However, solid structures are available not only at the local,
but at the European regional level – and national levels too ‐ to assist in ironing out differences
and “bridging”, (Øresund Region) not harmonising, rules and systems.

North America
North America is, of course, a different story altogether. NAFTA represents a relatively young
experiment in integration, engaging a limited number of states with a different (from the
European) historical experience and memory, special balance of power among its members, and
a recent transformative challenge (security, 9/11), to mention a few distinguishing features.
Providing BPG, and even RPG, therefore encounters more of the disadvantages described by
Sandler, when compared with the advantages of pursuing provision of public goods at the
global, transnational, or national levels. Yet, the conditions at least in some regions, notably the
Canadian‐American borderlands, and specifically the Pacific Northwest, are not that different
from the European borderlands (in some cases even more homogeneous) and are holding the
promise for success in BPG provision.
There are four main borderland regions straddling the Canada‐US border. While borderland
interactions have been intensifying across the board, they are still mainly centered on economic
activities described as forming clusters and economic hubs.15 The West ‐ often referred to as the
Pacific Northwest or Cascadia, includes the Canadian provinces of British Columbia, Alberta, and
the Yukon Territory; and the US States of Alaska, Washington, Idaho, Oregon, and Montana,
home to a population of 18 million. Its common economic concentrations are in transportation
and logistics, heavy construction services, oil and gas production and services, agricultural
products, fishing, and fishing products.
Another Western cross‐border cluster, relatively sparsely populated, consists of the western
part of the Prairies‐Great Plains cross‐border region, which includes on the Canadian side the
Albertan cities of Edmonton and Calgary (overlapping also as part of Cascadia) and Winnipeg,
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and several other cities in Manitoba; and Minneapolis in the State of Minnesota in the US. The
economic focus there is on heavy machinery.
The Great Lakes‐Heartland region centres around Toronto in Canada’s Ontario and Detroit in US’
Michigan and their respective satellite communities, with a focus on the automotive industry
including the building of fixtures equipment and services, and a metal industry, totalling a
population of 43.4 employable people.
In the East, two border regions are identified. Quebec with Montreal as the region’s chief
Canadian player with a population of 7.3 million16, and New England and the Massachusetts
Bay’s area with its sphere of influence along the New England Coast up and including Atlantic
Canada, amounting to about 16.2 million inhabitants.17 The two regions share an economic
focus on forest products and footwear, but are distinguished through Quebec’s additional
leather, footwear, publishing and printing, and furniture industries, and the Atlantic Provinces’
centralisation on agricultural products, distribution services, fishing and fishing products, and
power generation transmission. (The Emergence of Cross‐Border Regions 8‐9)18
A comparison between the EU and the North American Canada‐US borderlands is difficult to
draw in exact terms. The angle taken by the reports on the EU regions is understandably
determined by the regions’ embeddedness in a significantly advanced integrative process
ranging up to almost the creation of a constitutional confederation, and traced back to a process
that began on the heals of WWII. In comparison, the focus of reports on the North American
borderlands, and here ‐ on Canada‐US border regions, reflects the fact that North America has
only recently embarked on integration. Furthermore, this integration process has been limited
to the creation of a free trade area and a regional security parameter (most recently). Also, a
review of the relevant North American literature (The Emergence of Cross‐Border Regions 41‐
45) reveals that the researchers’ attention is attuned to regions within provinces and states
which are not in every case close to the international border; and to interaction between
provinces rather than regions within provinces that are located directly along the border. With
this caveat in mind, only one region along the Canada‐US border matches most closely the EU
type borderland.19

Cascadia
Cascadia constitutes part of the larger Pacific Northwest region, which justifies the
denomination of borderland even in a European comparison.20 It is however important to note
that from an institutional perspective, Cascadia is the most developed borderland along the
Canada‐US border. This is what makes it a good candidate for further integrative developments ‐
including in the area of law, regulations, and dispute resolution. The authors of the report on
the Emergence of Cross‐Border Regions identify four types of cross‐border organisations, all of
which exist in Cascadia. They reflect the two approaches to borderland integration observed in
the European cases, namely top‐down and bottom‐up. They include, respectively, general‐
purpose intergovernmental, single‐purpose intergovernmental, city oriented, and civil oriented
organisations.21
An initiative which is unique for it represents an equal public‐private partnership and is
incorporated as law in its member provinces/states statutes is the Pacific Northwest Economic
Region (PNWER). It occupies a leadership role as the most integrated and active institutions,
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with seventeen working groups including agriculture, environment, high‐tech, transportation,
etc., and is perhaps to credit for the highest ranking in “thickness and intensity” among the rest
of the Canada‐US crossborder regions. (The Emergence of Cross‐Border Regions 19) However,
while relatively prolific, the list of crossborder linkages, which has come to address even the
nationally sensitive immigration and security sectors, does not provide for anything
approaching, for instance, the “bridging” of rules and systems pursued by the Øresund Region.
At the backdrop of globalisation propelled competitive pressures, and in the absence of a NAFTA
regional and universally accessible dispute resolution mechanism, much of the irritations
generated by unsatisfactorily resolved disputes, or disputes which have not been pursued due
to lack of justice avenues, (Gal‐Or 2002) spills over and affects the goodwill and the amount and
quality of mutual knowledge in the borderland region.

Dispute resolution as a borderland public good
The most recent publication regarding the state of NAFTA is the tri‐national task force report
addressing the integration prospects in North America.22 Among the many challenges identified,
it mentions that
…regulatory differences among our three countries raise costs instead of
reducing them. […] [D]isputes in these [trade] areas have been a source of
disagreement among our countries. Furthermore, the NAFTA partners have
been unable to resolve a number of important trade and investment disputes,
which has created continuing tension in our commercial relationships”. (Building
a North American Community 4)

According to the report, the strategy fit for North America ‐ a unique partnership in itself ‐
should be integrated “recognising the extent to which progress on each individual component
enhances achievement of the others”. (6) It acknowledges that while most trade disputes had
been successfully resolved through the application of NAFTA dispute settlement mechanisms,
there remain several areas where disputes have been lingering and the NAFTA approach have
proven insufficient. To rectify this failing, one solution identified was the establishment of a
permanent tribunal for North American dispute resolution:
The current NAFTA dispute resolution process is founded on ad hoc panels that
are not capable of building institutional memory or establishing precedent, may
be subject to conflicts of interests, and are appointed by authorities who may
have an incentive to delay in a given proceeding. As demonstrated by the
efficiency of the World Trade Organization (WTO) appeal process a permanent
tribunal would likely encourage a faster, more consistent, and more predictable
resolution of disputes. (22)
These recommendations – particularly when considered in the broader context of the report ‐
mesh with all the approaches to provision of NPG, GPG, TPG, RPG, and BPG. However, in the
part entitled “What we should do now” (24) and the remainder of the text, the task force fails to
address the significant concept of subsidiarity; the closest it comes to itemising an agenda for
early action is in identifying priority sectors. However, there is no attention paid to the
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usefulness of delegating responsibility vertically, from the regional inter‐governmental North
American level to the local borderland arenas.
In its interim report on the Emergence of Cross‐Border Regions, the authors identify several
policy implications arising from Canada‐US regional opportunities and challenges. (25) They
maintain that globalisation has encouraged cross‐border regional integration, interdependence,
and specialisation in responding to the region’s demands, and consequently, made cross border
regions into key features of North American integration. At the same time, cross‐border
organisational capacities are still at a minimum although new policy frameworks to
accommodate different levels of government and more diversified stakeholders (similar to
PNWER) are warranted to generate economies of scope, increase efficiency, and regional
competitiveness. “It is noteworthy that most countries in western Europe have already
decentralized their regional development policies. Perhaps it is time to consider this in a North
American cross‐border context.” (The Emergence of Cross‐Border Regions 25) Subsidiarity as
regional issue management “may also prove more practical and easier to address local and
regional issues and resolve disputes in the context of cross‐border regions”. (The Emergence of
Cross‐Border Regions 25, emphasis added) If so, a BPG approach – currently often of negligible
importance on the broader, more universal dimension of public good, may prove sensible.
Validating the importance of BPG could help mobilise the increased participation of diverse local
stakeholders and give them a voice also at higher levels of policy making. Similar to the insight
gained from the European survey, (Facts & Experience) the authors of Emergence of Cross‐
Border Regions suggest that solidifying a cross‐border focus and activities would enhance the
sharing, and improve the quality, of information. This is necessary for both public policy at the
borderland level, and clearer mutual understanding among policy makers and stakeholders at
the elementary borderland, sub‐national, and up to the national governmental, levels. The
benefits can be said to spill over from the borderland for the BPG assists in solidifying, and
integrates with, the public good at the national and inter‐national levels. Arguably, recognising
BPG as an ingredient of NPG and RPG, and consequently possibly also of TPG and GPG, would
bolster a genuine pluralist democracy across all these levels of governance and contribute to
aligning of foreign policies.

A proposal for a dispute settlement approach at the borderland level
In the previous sections, I made the case for dispute settlement at the borderland level. I now
turn to propose a concrete approach for the establishment of a procedural dispute settlement
continuum reflecting, and adjusted to, the hierarchy of levels of governance and the
corresponding provision of public goods. In the following discussion, I suggest in broad brush
lines a design for a procedural dispute settlement continuum encompassing and converging
procedures at the borderland, regional, national, and international levels. The continuum is
multifaceted. It encompasses an escalating variety of adjudicative models focusing on
alternative dispute resolution mechanisms, and starting with facilitation, moving through
neutral investigation, mediation, and culminating with adjudication. It permits national court
procedures under certain specified conditions. It is also a continuum of adjudicative instances
and provides for escalating entry levels designed to accommodate various characteristics of the
dispute in view of defusing its intensity and leading to a faster, less time and resource
consuming process, and a simple settlement (defusing tensions rather than planting the seeds
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for the next dispute). Therefore, it includes at every stage provisions of inducement for early
resolution coupled with penalties for unjustified “stretching” of the process into unnecessary
next stages and/or levels.
For instance, softwood lumber disputes affecting borderland interests and stakeholders will
have their procedural entry level at the borderland level and apply to cases where softwood
lumber is traded in the borderland region (not across the entire Canada‐US or North American
region). The local entry level will accommodate all sizes of interests (small, medium size, and
large firms and borderland producers or professional or other interest associations).23 The
borderland entry level will apply to all types of actors involved in a dispute (private‐private,
public‐public, or public‐private). Should such disputes be interconnected with other broader
disputes and involve interests, trade,24 dimension of interests, and actors beyond the
borderland area, and the dispute cannot be broken down into locally specific “sub‐disputes”,
the entry level will be at a North American sub‐regional level, e.g. East, Middle, West but may be
initiated with a NAFTA or WTO regional tribunal. These levels of adjudication will also serve as
the next level of “escalation” should the borderland provide only the threshold to begin a
procedure (e.g. facilitation or mediation) or an appeal from a borderland small court judgment.
The final adjudicative instance will be an appellate body constituted at a pertinent NAFTA level,
WTO, or a party’s national court. A judgment enforcement arrangement should preferably be
agreed on at the national inter‐governmental level to lend legitimacy and finality to the
procedure.25
At its early stages, the dispute settlement continuum will be voluntary, based on modest
membership fees and significant public and private sector financial and promotional support. It
should be considered an investment in a BPG service, which once solidly established, and
enjoying a secured favourable reputation, should become self‐supporting.
Elsewhere, I have already proposed the first leg for a borderland dispute settlement continuum.
(Gal‐Or 2002) It combines PNWER’s Private Sector Council’s ADR Service project proposal and
NAFTA’s Advisory Committee on Private Commercial Disputes, Sub‐Committee IV of the NAFTA
2022’s small claims court suggestion. A skeleton for a genuine borderland dispute settlement
agency, it could be complemented by a NAFTA regional adjudicative instance aimed at satisfying
disputants through a laddered process to be determined by the characteristics of the dispute as
identified above: Preponderance of borderland interest, borderland as location of transaction,
size of interest, and type of actors.26 The scaling design includes also Pauwelyn’s idea (which has
to this day remained mute) to establish regional WTO offices supplemented by WTO inspection
mechanisms mimicking the World Bank’s and regional development banks’ practice. (59) These
structures will have to be incorporated within the larger trade and investment regime already
established in the NAFTA and the WTO precisely in order to rectify the problems of duplications
and rivalry which resulted from the non‐planned and non‐coordinated proliferation of
international courts and tribunals. A consciously pre‐meditated and crafted re‐arrangement
along the lines of the continuum may emerge as a welcome “straightening of the adjudicative
noodles” in the proverbial and larger spaghetti bowl.

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Conclusion
This paper makes a proposal to rectify the state of affairs where the public interest, at various
level of governance, suffers from the unprecedented multitude of competing procedures in
different fora. Causing great expense, stretching over a very lengthy period of time, they often
fail to, rather than, deliver the resolution needed to assist in the provision of public goods.
In the first section of the paper, I described the litigious thread which has been running through
the Canada‐US trade relations. I suggested that a crucial reason for the development of this
culture within the trade relations may lie is the remoteness of the dispute settlement
proceedings from the immediate inter‐national local where the subject matter of the dispute
forms an integral part of daily life. I then proceeded to discuss multi‐level governance and multi‐
level dispute settlement and introduce the borderland as a relevant and necessary fundamental
ingredient. I identify the public good approach as a useful tool to conceptualise the convergence
of the various levels of governance with the various models and instances of dispute settlement.
I highlight the importance of the principle of subsidiarity, already recognized in the European
context as workable, effective, efficient, and fair. Consequently, I am proposing a new approach
in the conceptualization of the provision of the public good, namely the provision of the public
good at the borderland level (BPG). I describe how it is already being implemented in Europe,
and compare it with the embryonic phases taking place in North America, notably the Pacific
Northwest. I then identify dispute resolution as a specific form of public good and conclude by
proposing a design for a multifaceted and laddered borderland dispute settlement continuum.
Although the EU integrative model can serve only as general guidance for the North American
experiment (whether regional or borderland), the concept of subsidiarity developed and tested
in the EU and wider European context (Council of Europe) over a long period of governance, and
validated through plenty adjudicative experience, proves helpful.27 It is not for nothing that the
European borderlands are prospering in terms of world economic competitiveness. Indeed, a
fundamental requisite is a reliable justice system. This is precisely the vacuum to be filled in
North America. Adding a borderland dispute settlement capacity embedded within a laddered
continuum of dispute settlement mechanism offers a unique approach tailored to North
American characteristics. It takes into consideration the interconnectedness of the BPG, RPG,
NPG, and GPG; innovates by introducing new structures but also maintains features of existing
mechanisms thus benefiting from NAFTA’s experience, and specifically ‐ the WTO’s
jurisprudential history.

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Appendix I – Model of Dispute Settlement Process
Appeal

Appeal

Court:

Court

Appeal

Appeal

Appeal

WTO

ICSID

Supreme

Court

Court

Court

ICJ

All instances

Small Claims

Arbitration

Arbitration

Arbitration

Arbitration

Arbitration

Mediation

Mediation

Mediation

Mediation

Mediation

Neutral
Report

Neutral
Report

Neutral
Report

Neutral
Report

Neutral
Report

Facilitation

Facilitation

Facilitation

Facilitation

Facilitation

Entry 1

Entry 2

Entry 3

Entry 4

Entry 5

GLOBAL
BORDER
-LAND

INTERNATION
AL/

TRANSNATION
AL/

REGION
AL

REGION
AL
WTO (trans’l

NAFTA

& regional)

A Proposal for a Borderland Continuum Dispute Settlement Procedure (41‐56)

/
TRANSNATION
AL/

NATION
AL

REGION
AL
ICJ ICSID

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Endnotes

For an analysis of the impact on justice caused by the proliferation of international courts and tribunals
see Gal‐Or, Noemi. “The Concept of Appeal”, Dispute Resolution – International Treaties and Trade,
International Law National Section, CBA Canadian Legal Conference and Expo 2006, St. John’s,
Newfoundland and Labrador, Aug. 13‐15, 2006, CD ROM [hereafter: Gal‐Or 2006]. Although this
proliferation is one of the most important reasons for the proposals made in this paper, I will not
elaborate on it for lack of space.
2
Canada and the WTO. Dispute Settlement Contribution of Canada to the Improvement of the WTO
Dispute Settlement Understanding. http://www.international.gc.ca/tna‐nac/wto_dispute‐en.asp. Retrieved,
January 15, 2007.
3
I use the terms dispute resolution and dispute settlement interchangeably.
4
I will not explore and elaborate on the reasons for this here.
5
“Article 705: Export Subsidies
6. The Parties hereby establish a Working Group on Agricultural Subsidies, comprising representatives of
each Party, which shall meet at least semiannually or as the Parties may otherwise agree, to work
toward elimination of all export subsidies affecting agricultural trade between the Parties. The
functions of the Working Group shall include:
(a) monitoring the volume and price of imports into the territory of any Party of agricultural goods that
have benefitted from export subsidies;
(b) providing a forum for the Parties to develop mutually acceptable criteria and procedures for reaching
agreement on the limitation or elimination of export subsidies for imports of agricultural goods into
the territories of the Parties; and
(c) reporting annually to the Committee on Agricultural Trade, established under Article 706, on the
implementation of this Article.” NAFTA Chapter Seven on Agriculture and Phytosanitary Measures
(http://www.international.gc.ca/nafta‐alena/chap07a‐en.asp?#Article701) retrieved Jan. 15, 07
6
“Benefits are nonrival when a unit of the good can be consumed by one agent without detracting, in the
least, from the consumption possibilities still available for other agents from the same unit. Sandler,
Todd. “Regional Public Goods and International Organization”, Review of International Organization
(2006) 1: 6, note 1.
7
“Benefits are nonexcludable when they are available to all would‐be consumers once the good is
supplied.” Ibid.: 6, note 1.
8
“[H]ow individual contributions add to the overall level for consumption.” Ibid.: 6.
9
D.C. North quoted in Sandler at 15.
10
For definitions of Cascadia and the Pacific Northwest see, Gal‐Or, Noemi. “Commercial ADR in Cascadia",
Canadian Journal of Regional Science (2002) Vol. 24: 2 [hereafter: Gal‐Or 2002].
11
Pauwellyn, Joost. “The Transformation of World Trade”, Michigan Law Review (2005) 104:1, 59.
12
Facts and Experience. An Introduction to Cross‐Border Regional Labour Markets in Europe. ØAR,
Øresundsregionens Arbeidsmarkedspolitiske Råd, Øresundskomiteen, November 2004
www.oresundskomitee.org, 8 [hereafter: Facts & Experience].
13
It is nevertheless largely driven by a “broad, informal network and a process influenced by ‘the learning
region’”. The Ongoing Development of the Øresund Region. Action Plan for the Øresund Committee
2005‐2006, www.oresunskomitee.dk/english [hereafter: Øresund Region].
14
For instance, at a European level – the network of European Metropolitan Regions and Areas (METREX),
http://www.eurometrex.org/EN/.
15
For the latest detailed review see, The Emergence of Cross‐Border Regions. Interim Report. November
2005, Policy Research initiative, PRI Project North American Linkages, Government of Canada.
1

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Population and Dwelling Counts, for Canada, Provinces and Territories, 2001 and 1996 Censuses ‐ 100%
Data. Statistics Canada, http://www12.statcan.ca/english/census01/products/standard/popdwell/Table‐PR.cfm,
retrieved January 21, 2007.
17
Ibid., and Census 2000 Population Results for New England 1990 – 2000 U.S. Bureau of the Census,
http://www.dlt.ri.gov/lmi/census/pop/neweng.htm, retrieved 21 January, 2007.
18
Another crossborder classification includes the provinces of Alberta, Saskatchewan, and Manitoba
within the Prairies‐Great Plains area as well as the US States of Montana, Wyoming, North Dakota,
South Dakota, and Minnesota; for the Great Lakes‐Heartland region Ontario with Michigan, Indiana,
and Ohio; and for the East – Quebec with Vermont, Maine, New Hampshire, and New York, and
Atlantic Canada with Maine, New Hampshire, Massachusetts, Rhode island, and Connecticut. Brunet‐
Jailly, Emmanuel, Susan E. Clarke, Debora L. VanNijnatten, Derek Jansen, Christian Boucher and André
Downs. Leader Survey on Canada‐US Cross‐Border Regions. Policy Research Initiative, Government of
Canada, Working Paper Series 012, February 2006, 7.
19
Certainly, geographical proximity dimensions in Europe are favouring the borderland epithet, whereas
the magnitude of Canadian and American regions requires a broader geographical approach.
20
The definition of Cascadia, which has been widely debated (from geopolitical, environmental,
ideological, cultural, etc. angles), (Gal‐Or 2002) is immaterial to the present discussion.
21
A short and non‐exhaustive list includes the Alberta and British Columbia associate membership of the
American Council of State Governments‐West, a forum without a supporting structure nor resources,
and weaker than its Eastern counter‐parts; the British Columbia/Washington Environmental
Cooperation Council, and the British‐Columbia/Washington Mobility and Trade Corridor (IMTC),
which includes public and private members from both sides of the border; the Cascadia Mayors
Council for British Columbia, Washington, and Orgeon; the Pacific Corridor Enterprise Council (PACE)
representing business, the environmentally oriented Northwest Environment Watch, the think‐tank
Discovery Institute promoting a Cascadia transportation project, and the bioregion focused Cascadia
Institute. (The Emergence of Cross‐Border Regions 14‐18)
22
Building a North American Community. Council on Foreign Relations Press, May 2005
http://www.cfr.org/publication/8102/building_a_north_american_community.html, retrieved 17 January, 2007. It
must be noted that this report was so far not politically endorsed and that it contains individual
reservations noted by members of the task force regarding various elements of the report.
23
“There is a large literature suggesting that there should be an important leap forward in terms of NAFTA
or North American organizations to address pressing cross‐border issues, such as dragging trade
disputes…”. (The Emergence of Cross‐Border Regions 27) The authors explore also the specific
advantage to be gained by Canada from such approach, which is beyond the scope of this paper.
24
Or for that matter, any economic related interaction affecting economies of scale and scope.
25
Incorporating international law within domestic law has proven a persistent problem impeding on the
effectiveness of the international dispute resolution regime. One recent example is provided in the
Council of Canadians, Canadian Union of Postal Workers, Charter Committee on Poverty vs. AG of
Canada (the so‐called UPS case) Ontario Supreme Court of Justice, Court File No.: 01‐CV‐208141, July
8, 2005. An encompassing account of this subject in general is found in International Law Decisions in
National Courts, Thomas M. Franck and Gregory H. Fox (eds.), New York: Transnational Publishers,
Inc., 1996.
26
A more detailed development of the continuum conceptualisation for borderland dispute resolution will
most likely prompt additional characteristics.
27
The European Charter of Local Self‐Government, CETS No.: 122, adopted by the Council of Europe
Committee of Ministers in 1985, entered into force, 1 September, 1988, “sets out the principle that
effective local self‐government is essential to democracy. It serves as a model for legislative reform
for local democracy. The principle that the delivery of public services should be delegated to the level
closest to the citizen – the principle of subsidiarity, equally laid down in the Charter – was also
16

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recognised

by

the

European

Union

in

its

draft

Constitutional
Treaty.
retrieved 18 January,
2007. Most recently, the Council of Europe Report of the Group of Wise Persons to the Committee of
Ministers (CM(2006)203 November 2006) reiterated the cornerstone value of the “principle of
subsidiarity” in the context of the European Court of Human Rights, and made ten improvement
recommendations, which bear relevance to the role of courts in integrative systems also beyond the
European context.
http://conventions.coe.int/Treaty/Commun/QueVoulezVous.asp?NT=122&CM=1&DF=&CL=ENG,

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