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)

Reuters | 24-Mar-2017
Transcanada Corp’s legal challenge against the United States over its past rejection of Keystone XL pipeline has been dropped.
Tech Dirt | 22-Mar-2017
Just the fact that the Canadian government had to go through this massive and expensive process for many years just for rejecting two bad patents should show why ISDS provisions are such a problem.
Politico | 20-Mar-2017
Canada has prevailed over pharmaceutical giant Eli Lilly in a long-running investor-state dispute the drug company filed under NAFTA’s investment chapter.
Open Canada | 3-Mar-2017
NAFTA has its fair share of critics who want to see it updated. But if Trump has his way, a re-negotiated agreement may prove disappointing.
La Presse | 1-Mar-2017
TransCanada a suspendu une poursuite de 15 milliards $ contre les États-Unis relativement à Keystone XL à la suite de signaux lancés par le président américain Donald Trump qui laissent peu de doute quant à l’approbation du projet d’oléoduc.
Reuters | 28-Feb-2017
TransCanada Corp has suspended a $15 billion NAFTA suit filed against the United States over the Keystone XL pipeline after U.S. President approved the project.
Ecojustice | 23-Feb-2017
What makes ISDS divisive is it exposes governments to potentially expensive private arbitration by foreign corporations who feel that environmental protection measures impede their business.
The Globe and Mail | 22-Feb-2017
A New York-based energy company is asking the Ontario Superior Court to enforce a $28-million award against the Canadian and Ontario governments that it received under a NAFTA arbitration.
The Globe And Mail | 19-Jan-2017
What does Mr. Trump think about the constitution-like rights for the protection of foreign investors that are enforced via the system of investor-state dispute settlement (ISDS)?
The Globe and Mail | 19-Jan-2017
The Americans want to discuss country of origin rules and the independent dispute-settlement mechanism.

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