The Intersection of International Trade and International Arbitration: The Use of Trade Benefits to Secure Compliance with Arbitral Awards

Abstract

This Article examines a recent example of the intersection of the two related fields of international trade and international arbitration: the suspension of international trade benefits to secure compliance with international arbitral awards. On May 28, 2012, the United States suspended Argentina’s preferential trade status under the Generalized System of Preferences (GSP) due to Argentina’s purported failure to comply with the International Centre for Settlement of Investment Disputes (ICSID) arbitral awards in Azurix and CMS Gas. This was the first time in the history of the GSP that the United States has suspended a state’s preferential trade status for failing to pay an arbitral award. This Article endorses the United States’ novel approach as it would seem to further compliance with international arbitral awards, thereby strengthening the legitimacy of international arbitration, particularly ICSID arbitration, as a meaningful form of alternative dispute resolution.