NAFTA

The North American Free Trade Agreement (NAFTA) was 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 became 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 nine cases it has lost or settled. 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.

NAFTA was recently renegotiated and replaced by the US-Mexico-Canada Agreement (USMCA), which was signed on 30 November 2018. The ISDS mechanism between the US and Canada, and between Mexico and Canada has been removed – even though it is included in the TPP, to which both countries belong. New procedures replace the ISDS between the US and Mexico. Expansive rights for investors are mostly terminated. Only limited claims are allowed after exhaustion of local remedies. But the ISDS mechanism has been maintained between the two countries for claims pertaining to Mexico’s oil and gas sector.

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 2020)

JDsupra | 16-Nov-2020
Vento’s claims ultimately failed on the merits because Vento could not show irregularities in the Mexican tax authority’s treatment of its investment.
Televisa | 1-Nov-2020
México tiene 13 demandas derivadas del anterior Tratado de Libre Comercio con Estados Unidos y Canadá (TLCAN) reveló la secretaría de Economía, Graciela Márquez, que además aseguró es un número inusual.
Sputnik | 6-Oct-2020
La intención del Gobierno de México para contrarrestar la reforma energética promulgada en 2014 podría implicar violaciones a los compromisos que el país latinoamericano adquirió al suscribirse a los Tratados Integral y Progresista de Asociación Transpacífico (TIPAT) y, así como al acuerdo entre México, Estados Unidos y Canadá (T-MEC).
International Law Office | 17-Sep-2020
The tribunal held that the Mexican authorities had not violated international commercial law or breached their commitments under treaties to which they were a party.
GlobeNewswire | 17-Sep-2020
Odyssey filed the first memorial, alleging that Mexico wrongfully denied environmental approval of the ExO Phosphate project in breach of NAFTA.
El Sol de México | 26-Aug-2020
La estadounidense Coeur Mining acusa que el SAT no le devolvió esa cantidad por concepto del IVA.
Infobae | 24-Jul-2020
Canadian Solar Inc, Atco Ltd, Northland Power Inc y JCM Power, consideraron peligrosa la decisión del gobierno mexicano de suspender nuevas plantas de energía renovable.
Página/12 | 20-Jul-2020
La firma del T-MEC evidenció como Trump busca conciliar la reproducción del neoliberalismo y el cuidado de la economía estadounidense. México y Canadá, los convidados de piedra.
Council of Canadians | 13-Jul-2020
Already, Mexico’s progressive reforms have made it an ISDS target. First Majestic, a Canadian silver mining company has been threatening Mexico for the last few years, under NAFTA’s Chapter 11.
El Economista | 7-Jul-2020
México ganó un caso de resolución de controversias Inversionista-Estado en contra de la empresa Vento Motorcycles en el marco del Tratado de Libre Comercio de América del Norte (TLCAN), informó la Secretaría de Economía.

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