| This thesis seeks to reconcile free trade and foreign investment with national governments' freedom to regulate to protect important public values such as the environment, health and safety. The effort is justified for free trade, foreign investment, and the capacity of governments to respond to public demands, are all important to increasing welfare in different ways. This thesis re-examines two bodies of legal rules, the U.S. dormant Commerce Clause jurisprudence and Article XX of GATT, developed to deal with the tension between trade and governments' freedom to regulate. Based on the analysis of these two bodies of rules, a method for striking a balance between trade and regulation that addresses environmental, health and safety concerns is proposed. It is concluded that Chapter Eleven of NAFTA does not contain a formal instrument to ensure that Chapter Eleven Tribunals will strike such a balance. The introduction of an Article XX-like provision is suggested as a means to ensure that foreign investment protection will not supersede these other values at stake. |
