CAFTA

The US-Dominican Republic–Central America Free Trade Agreement (CAFTA for short) was signed in 2004. It encompasses the United States and the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

The investor-state dispute settlement (ISDS) mechanism specified in CAFTA has provided US companies privileged means to challenge national laws and claim millions of US dollars in compensation in Central America. The US has only been challenged once (case still pending).

As of end of June 2015, CAFTA was invoked in about 1% of all ICSID cases.

The most well-known cases include:

TCW (US) vs. The Dominican Republic: case settled in 2009 for US$26.5 million to the investor, an investment management corporation.

Railroad Development Corporation (US) vs. Guatemala: US$18.6 million awarded in 2012 to the investor in a dispute over a railroad contract.

Pac Rim Cayman LLC (Canada, U.S.-based subsidiary) vs. El Salvador: in 2008, El Salvador denied a mining permit to Pac Rim due to environmental concerns. In 2012, a CAFTA tribunal allowed the mining corporation to pursue its claims at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) under domestic investment law. Case is still pending.

(November 2015)

| 30-Mar-2007
Pittsburgh-based Railroad Development Corporation (RDC) has hired former US trade agreement negotiator, Regina Vargo, and filed suit against the Guatemalan government under the investor-state provisions within Chapter 10 of CAFTA.
| 14-Mar-2007
On the morning of Tuesday, March 13, Railroad Development Corporation (RDC) filed its Notice of Intent to Submit Claims to international arbitration against the Republic of Guatemala under the Central America-Dominican Republic-United States Free Trade Agreement (CAFTA).
Informa-tico.com | 28-Sep-2005
Costa Rica enfrenta desde junio pasado una demanda de la minera canadiense Vanessa Ventures Ltd, propietaria del archipolémico proyecto de explotación de oro a cielo abierto en Las Crucitas, frontera norte, la cual se suma a otro reclamo de inversionistas extranjeros de Ofinter S.A. -clausurada en el 2002- al amparo del acuerdo de inversiones suscrito en 1999 e incorporado al tratado de libre comercio (TLC) con Canadá.
| 20-Jul-2005
Criticism of the Central American Free Trade Agreement (CAFTA) currently being considered by the U.S. Congress has focused heavily on concerns that the treaty would devastate Central American farmers who would be forced to compete with heavily subsidized U.S. agribusiness.
Public Citizen | 23-Feb-2005
A new study by Public Citizen’s Global Trade Watch analyzes 42 NAFTA investor-state challenges and illustrates how the proposed CAFTA would extend the threat.
ARGENPRESS | 4-Sep-2004
Ponencia presentada en el III Congreso Internacional - Derechos y Garantías en el Siglo XXI. Asociación de Abogados de Buenos Aires. Buenos Aires, 8, 9 y 10 de setiembre de 2004. Facultad de Derecho de la Universidad Nacional de Buenos Aires.
| 31-May-2004
The attached letter, pressuring Costa Rica to resolve two disputes in favour of US investors, has been denounced as a blackmail by local activists.

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