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Trade and business grows in CAFTA. But so will the number of disputes, experts warn.


In Guatemala, U.S.-based Railroad Development Corporation is preparing a suit against the government for damages caused by what it says is an indirect expropriation. In the Dominican Republic, U.S.-based investment company TCW is suing the government for its failure to protect its electricity subsidiary EdeEste and the energy sector from theft.

The two actions are only the beginning of more legal proceedings in CAFTA, legal experts say. "We do expect over time to see more disputes invoking CAFTA as the basis for arbitral jurisdiction, just as similar bilateral and multilateral investment treaties and free trade agreements have been invoked in the past," says Jean E. Kalicki, a counsel in the litigation practice of U.S.-based Arnold & Porter LLP. 

Regina Vargo, senior director for global trade at U.S.-based Greenberg Traurig and a former Assistant U.S. Trade Representative for the Americas, also expects more CAFTA disputes in the future.  

Vargo represents RDC in its dispute and says the case represents the first notice...

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