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)

Toronto Star | 24-Jun-2018
NAFTA is a corporate rights agreement, not a free-trade agreement in the original sense.
The Guardian | 13-Jun-2018
In arguing for a sunset clause to the Nafta trade agreement, this odious man is exposing the corruption of liberal democracy.
Common Sense Canadian | 17-May-2018
Canada’s controversial mining sector may be the driving force behind the country’s insistence on protecting foreign investors’ rights over laws that guard its own citizens and environmental values.
IATP | 11-May-2018
The Maine Citizen Trade Policy Commission, a legislator-run, bipartisan governmental body, recently sent a letter to U.S. Trade Representative calling for ISDS to be removed in its entirety from NAFTA.
IISD | 9-May-2018
A decision by the Federal Court of Canada should spell the end of the NAFTA renegotiation on the investment Chapter of NAFTA, and ignite a renegotiation of the investment chapters of the Canada-EU trade agreement and the CPATPP.
The Chronicle Herald | 6-May-2018
Environmental law experts are concerned about the broader implications of a recent federal court dismissal of Canada’s application to overturn a NAFTA tribunal ruling.
CBC | 3-May-2018
New Jersey company behind quarry proposal in Digby Neck claims damages of $443M US in lost profits.
Bloomberg | 19-Apr-2018
Dislike of investor-state dispute mechanism appears widespread. Public consultation files detail what Trudeau team was told.
IATP | 11-Apr-2018
The financial industry’s demands for a “modernized” financial services chapter of the North American Free Trade Agreement have been overlooked
National Observer | 11-Apr-2018
Canada is the most sued country in NAFTA but Canadian companies aren’t shy about using ISDS claims either.

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