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)

The American Prospect | 5-Apr-2019
USMCA bears many resemblances to NAFTA, which has been cited as a driver of low-wage corporate outsourcing.
El Sol de México | 29-Mar-2019
La SE tiene dos semanas para resolver el caso antes de llegar a la conciliación.
The Mazatlán Post | 28-Mar-2019
The US company notified its intention to claim compensation of 3,540 million dollars from the Mexican government.
Marianne | 27-Mar-2019
Les nouvelles formes d’accords commerciaux ont tendance à régir le fonctionnement interne des États politiques en leur imposant des règles claires et des contraintes en sacralisant le pouvoir des investisseurs.
CBC | 26-Feb-2019
Long-running case began after New Jersey company’s bid to open a quarry in Nova Scotia rejected in 2007
CIAR Global | 22-Feb-2019
La demanda de arbitraje de inversiones de un grupo de 27 inversores contra Mexico, notificada en abril de 2018 y presentada ante el Centro Internacional de Arreglo de Diferencias relativas a Inversiones (Ciadi) en junio, ya tiene tribunal.
Alternatives Economiques | 19-Feb-2019
Usage de faux, manipulation de la jurisprudence, gonflement des pertes... Les multinationales ne lésinent pas sur les moyens pour obtenir un arbitrage en leur faveur.
CIAR Global | 8-Jan-2019
El pasado 3 de enero, la compañía estadounidense Legacy Vulcan presentó una demanda de arbitraje de inversiones contra México en relación con sus inversiones en yacimientos de piedra caliza en el país centroamericano.
El Economista | 7-Jan-2019
El nuevo acuerdo que sustituirá al TLCAN eliminará la solución de controversias entre inversores y estados para Canadá.
Washington Post | 3-Jan-2019
Investment treaties with ISDS provisions make it hard to tax foreign firms and worsen human rights and labor practices.

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