NAFTA

The North American Free Trade Agreement (NAFTA) is comprised of Canada, Mexico and the United States. It came into effect in 1994 and was the first trade agreement among developed countries to include investor-state dispute settlement (ISDS) provisions.

Over 20 years later, Canada has become the third most sued developed country in the world. Of the 77 known NAFTA investor-state disputes, 35 have been filed against Canada, 22 against Mexico and 20 against the US. American investors have won 11 of their cases and the US never lost a NAFTA investor dispute or paid any compensation to Canadian or Mexican companies.

Canada has paid American corporations more than US$200 million in the seven cases it has lost and foreign investors are currently seeking over US$6 billion from the Canadian government in new disputes. Besides, Canada has spent over US$65 million in legal fees, regardless of the cases’ outcome.

Most NAFTA arbitration disputes involved challenges to environmental protection or resources management that were claimed to have interfered with the profit of US corporations.

The most well-known cases include:

Ethyl (US) vs. Canada: case settled in 1998 for US$13 million paid to the US chemical company, in compensation for the ban of the toxic gasoline additive MMT. The ban was also lifted.

Metalclad (US) vs. Mexico: US$16.2 million awarded in 2000 to the investor, a waste management corporation, for not having been granted a construction permit for a toxic waste facility.

Loewen (Canada) vs. United States: the dispute over a funeral home contract was dismissed on far-fetched procedural grounds in 2003.

(March 2016)

Politico | 22-Sep-2017
Senior U.S. trade officials have crafted a proposal for the upcoming round of NAFTA talks that would eliminate the practice of having independent panels impose binding decisions in trade disputes.
The Globe and Mail | 14-Sep-2017
The goal of Foreign Affairs Minister Chrystia Freeland is to revamp Chapter 11 so it more closely mirrors the investor-state dispute-resolution mechanism that forms part of the 2016 Canada-European Union trade deal.
The Hill | 13-Sep-2017
By pushing for a little-known but damaging legal concept buried in the North American Free Trade Agreement (NAFTA), the chamber has chosen to represent the interests of a handful of corporations instead of the interests of responsible business owners.
Forbes India | 12-Sep-2017
The first ever final award on patents in international investment arbitration by ICSID in the case of Eli Lilly v. Canada has effectively cleared the way for raising future disputes by foreign IPR owners against domestic institutions which can result in stronger and robust IP protection regime.
Economía Hoy | 30-Aug-2017
Trump quiere que los conflictos se resuelvan con la ley estadounidense. La dependencia comercial de México es por sí misma una desventaja. México y América del Norte deben pensar más allá de solo el libre comercio
Washington Examiner | 30-Aug-2017
Canada will oppose any effort to change the investor-state dispute resolution system in the North American Free Trade Agreement, sources tell the Washington Examiner
Washington Examiner | 25-Aug-2017
More than 100 associations representing US businesses are teaming up to encourage the Trump administration to maintain ISDS protections as it renegotiates NAFTA, writes the head of the US oil and natural gas industry trade group
FT | 25-Aug-2017
Three top US business groups have fired a warning shot at the Trump administration, threatening to drop their support for its renegotiation of the North American Free Trade Agreement if a controversial investment protection provision is abandoned.
La Jornada | 23-Aug-2017
Es preferible para México que no exista el Tratado de Libre Comercio de América del Norte (TLCAN) a permitir que sea eliminado el capítulo 19, referido a la solución de controversias, como demanda el gobierno de Estados Unidos, coincidieron investigadores y especialistas.
WSJ | 23-Aug-2017
US trade officials are putting together a proposal to let the US withdraw from a corporate arbitration system at the heart of the North American Free Trade Agreement, upsetting big American companies that say the system protects their investments overseas.

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