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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.

Photo: Obert Madondo / CC BY-NC-SA 2.0

(March 2020)

Investment: NAFTA illegal?
Straight Goods | 7-Feb-2005
On January 24, the Council of Canadians and the Canadian Union of Postal Workers (CUPW) launched a constitutional challenge against NAFTA’s Chapter 11 rules before the Ontario Superior Court of Justice. This is the first time that a court will consider the constitutionality of international trade rules.
Canada , investment | BITs , investor-state disputes | ISDS , NAFTA | USMCA
ALCA/IIRSA, Plan Colombia y el Eje de Desarrollo Occidental
ALCA/IIRSA, Plan Colombia y el Eje de Desarrollo Occidental | 11-May-2004
El Tratado de Libre Comercio para América del Norte (TLCAN, enero 1994), el Área de Libre Comercio para las Américas (ALCA, diciembre 1994), el Plan Colombia (1999), la Integración de la Infraestructura Regional Suramericana (IIRSA, septiembre 2000) y el Plan Puebla Panamá (PPP, marzo 2001) son distintos elementos estructurantes de la política hegemónica de los Estados Unidos para las Américas y el Caribe.
FTAA , geopolitics , IIRSA , investor-state disputes | ISDS , NAFTA | USMCA , sovereignty | democracy , Venezuela
FTAAs/IIRSA, Plan Colombia and the Axis of Western Development
ALCA/IIRSA, Plan Colombia y el Eje de Desarrollo Occidental | 11-May-2004
The North American Free Trade Treaty (NAFTA, Jan 1994), the Free Trade Area for the Americas (FTAAs, December 1994), Plan Colombia (1999), the Regional Integration of Infrastructure in South America (RIISA, September 2000) and the Plan Puebla Panamá (PPP, March 2001) are the building blocks of the US hegemonic policy for the Americas and the Caribbean.
FTAA , geopolitics , IIRSA , investor-state disputes | ISDS , NAFTA | USMCA , sovereignty | democracy , Venezuela
NAFTA Tribunals Stir US Worries
| 18-Apr-2004
After the highest court in Massachusetts ruled against a Canadian real estate company and after the United State Supreme Court declined to hear its appeal, the company’s day in court was over.
investor-state disputes | ISDS , NAFTA | USMCA
Analysis: Sleeping Beauty And Prince Charming: Bilateral Deals Are No Fairytale
| 24-Mar-2004
The recent explosion of bilateral investment and trade agreements and investor-state disputes is of growing concern. Many mobilisations against the World Trade Organisation (WTO) aim to stop attempts by industrialised countries to kickstart talks on a multilateral investment agreement at September’s Cancun Ministerial meeting.
ICSID , investment | BITs , investor-state disputes | ISDS , NAFTA | USMCA , UNCITRAL