Players in the fruit and vegetable trade in Canada, the United States and Mexico are creating their own dispute-settling rules to resolve conflicts over commercial deals.
A new organization, with a head office in Ottawa, will be formed by February 2000 and will offer membership to the hundreds of companies, growers, brokers, traders and buyers involved in the North American horticultural trade.
“This organization could cover trade worth up to $7 billion,” said Stephen Whitney, executive vice-president of the Canadian Produce Marketing Association.
He has been one of the leading figures negotiating details of the scheme during the past three years.
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An announcement last week that the planning and negotiations are almost complete included a statement of member obligations. It said: “The organization will require that its members abide by fair trading practices and submit to mediation or arbitration of disputes in accord with standard rules.”
Whitney said creation of the group will make for a more transparent trading regime in North America for fruits and vegetables.
“We lacked a common playing field and this organization will provide one, so buyers and sellers can know those who are responsible traders.”
There still is no agreed-upon name for the organization, which is being called the Trinational Corporation until an official name is chosen.
The new commercial dispute settlement system will not be a substitute for the dispute-settlement role of the North American Free Trade Agreement. Whitney said the two are complementary.
NAFTA panels still can be used to settle grievances about national policy, dumping or unfair trade policy or programs. It is a political dispute settlement avenue.
The industry-organized system will deal with contract disputes between buyers, sellers or intermediaries.
“This will be a substitute for costly and slow court resolution of disputes,” said Whitney. “We will offer faster, more efficient and less costly resolution of commercial disagreements over how the terms of contracts have been met.”
Negotiations between governments and members of the trade in the three countries started after a NAFTA committee recommended such a system for commercial arbitration.
Whitney said it could cost $725,000 to run annually, including the cost of contracting out much of the mediation, arbitration and inspection work. That amount must be raised before the corporation can be launched in February.
Membership fees of $750 will cover some costs. Governments might be asked for some help, although Agriculture Canada already has helped fund some of the organization work during the past several years.
