One Step Forward, Two Steps Back?: The EU-MERCOSUR Dispute Settlement Mechanism in the Light of the EU’s Experience with Free Trade Agreements (FTAs)

The main goal of this paper is to investigate the key features of the dispute settlement mechanism envisaged in the recent EU-MERCOSUR Trade Agreement and assess whether it might constitute an attractive alternative forum for solving trade disputes al- so in light of the ongoing crisis of the WTO dispute settlement system. In this context, being crucial for the achievement of this goal, the paper will analyse not only the gen- eral dispute settlement provisions, but also the exact meaning and any repercussions of the inclusion of a separate, parallel dispute settlement mechanism in the Trade and Sus- tainable Development (TSD) chapter for trade disputes relating to TSD issues. The pa- per will consider potential procedural and substantive issues that would help the ac- complishment of its research task. It will claim that the EU-MERCOSUR dispute settle- ment mechanism could indeed become a partial attractive alternative to solve trade dis- putes between the specific parties. Nevertheless, it will also defend the argument that there are certain aspects and issues concerning in particular foreign direct investment (FDI) disputes that will work against the dispute mechanism’s complete success.