NAFTA: Free Trade And the Rule of Law

AS ``trade follows the flag,'' so lawyers follow trade. With the ever expanding trade in goods and services around the world, business lawyers are shuttling across international borders like bills of lading.

Today a growing number of American lawyers aren't just advocates: They're also avocats, abogados, and whatever the Chinese, Japanese, and Timbuktese equivalents are.

It's hardly surprising, therefore, that many lawyers in the United States, and the American Bar Association, support the North American Free Trade Agreement, the proposed treaty that would lower trade barriers between the US and Mexico (complementing the recent Free Trade Agreement between the US and Canada). Commercial lawyers in the US anticipate that the ratification of NAFTA would significantly expand trade across the Rio Grande, and that this in turn would raise the demand for lawyers with trade expertise.

``An increase in trade and investment with Mexico inevitably means an increase in legal services,'' says Gary Horlick, a trade lawyer in the Washington office of O'Melveny & Myers. ``Lawyers help facilitate international trade and investment by explaining the rules. There will be so many rule changes in Mexico under NAFTA that US companies will want American counsel there as well as Mexican counsel.''

A few US law firms - especially Texas firms - already have outposts in Mexico City to service American business clients there, and the number of such outposts, or of other kinds of affiliations between US and Mexican lawyers, would likely rise quickly in the wake of NAFTA, just as American lawyers have had a steadily growing presence in Europe as trans-Atlantic commerce has expanded. More recently, though still in small numbers, US lawyers have been setting up shop in Hong Kong, Tokyo, Beijing, and elsewhere around the Pacific Rim to keep abreast of trade growth.

NAFTA would throw work to trade litigators as well as to business counsel. Among the pact's most innovative features are elaborate and unprecedented mechanisms to speed the resolution of trade disputes. Lawyers would serve on the arbitration panels established under the treaty and also would represent aggrieved clients bringing disputes to the panels.

US trade lawyers acknowledge frankly that they back the agreement because it will be good for their clients and thus their own - business. ``NAFTA is extremely important for companies I represent,'' says Dallas lawyer Jay Vogelson, who worked with Mexican and Canadian lawyers on proposals for the dispute-resolution procedures.

But Jack Watson, an Atlanta lawyer who was President Carter's chief of staff, offers another reason why the American Bar Association supports the trade pact. According to Mr. Watson, who chairs an ABA task force lobbying for NAFTA, the agreement is important ``because of what it does for the rule of law.''

In Watson's view, greater commercial and legal interaction among nations raises legal standards, especially in developing countries. For instance, he says, under the spotlight of international attention, Mexico has improved its labor and environmental practices, and the Mexican judiciary is raising its standards in the areas of nondiscrimination and civil rights.

As for NAFTA itself, Watson says it is ``a model international trade agreement,'' both in the scope of its coverage (it extends to services and intellectual property as well as goods) and in its dispute-resolution mechanisms.

The latter, he says, with their emphasis on arbitration and other alternative dispute resolution (ADR) procedures, reflect a growing realization within the international business community that ADR works better in trade disputes than does traditional litigation. Watson hopes that NAFTA will become a standard for other trade agreements.

Of course, not all US lawyers favor NAFTA: Many labor and environmental lawyers, for instance, oppose it for the same reasons that union leaders and eco-activists do.

With or without NAFTA, however, the ``export'' of lawyers will continue to grow in an interdependent world. Lawyer-bashers may not regard this as a healthy development; but it just may be true that, as Watson and others say, the globalization of legal services will broaden and strengthen the rule of law.

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