Chapter 19 gives the United States, Canada and Mexico the right to challenge each others' anti-dumping and countervailing duty decisions in front of an expert panel with members from both countries involved in a dispute. Anti-dumping cases are used to block imports on the basis that the exporting country is not trading fairly, for example by subsidizing a domestic industry so it can set low prices.
When NAFTA and the earlier Canadian-U.S. Free Trade Agreement were negotiated, Canada pushed the United States to give up the right to bring anti-dumping cases against its neighbors completely, but the United States refused. Chapter 19 was a compromise. During a speech in Ottawa last year, Canadian Foreign Minister Chrystia Freeland reminded her audience that Canada had walked out of trade talks with the United States in 1987 over the issue.
The system has not been used heavily in the last 10 years. The best known cases, and all of the currently active cases that involve Canada, are about softwood lumber. Active cases between Mexico and the United States cover U.S. fertilizer, and steel pipe and washing machines made in Mexico.
In the mid-2000s, in the midst of the last round of softwood lumber disputes, Chapter 19 panels repeatedly ruled against the United States to fight back, before both sides negotiated a truce.
