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)

IISD | 6-Jul-2022
Le différend portait sur un investissement réalisé par Westmoreland Coal Company, une entreprise enregistrée aux États-Unis, dans deux entreprises canadiennes en avril 2014.
IISD | 6-Jul-2022
The dispute pertained to an investment made by Westmoreland Coal Company, a US‑incorporated company, in two Canadian enterprises in April 2014.
La Jornada | 23-Jun-2022
Con la denuncia internacional de los daños causados por la minera Calica en Playa del Carmen, anunciada por el presidente Andrés Manuel López Obrador, se evidenciará el grave desbalance que hay entre el poder de los estados y organismos internacionales de regular a empresas trasnacionales, y el poder de éstas para anteponerse a los derechos humanos y ambientales.
CIAR Global | 6-Jun-2022
Andrés Manuel López Obrador (AMLO) amenazó en su rueda de prensa del 25 de mayo (La Mañanera) con recurrir a tribunales, nacionales o extranjeros, si no llega a un acuerdo con Vulcan Materials sobre el yacimiento en Quintana Roo.
El Sol de México | 26-May-2022
Desde noviembre del 2020 y hasta marzo del 2022, se registraron controversias entre México y Estados Unidos; Estados Unidos y Canadá, México y Canadá.
Forbes | 19-May-2022
Talos presentó en septiembre al gobierno mexicano notificaciones de disputa en virtud del acuerdo comercial entre Estados Unidos, México y Canadá (T-MEC), un paso previo a la introducción de un reclamo de arbitraje internacional.
Reuters | 18-May-2022
US-based oil producer Talos Energy has temporarily suspended pursuit of an arbitration claim against Mexico amid high-level talks over one of the country’s flagship offshore projects.
CIAR Global | 9-May-2022
El gobierno de Andrés Manuel López Obrador ha ordenado el cierre de las operaciones y cierre en las extracciónes y canteras submanrinas que la compañía estadounidense Vulcan Materials Company administra en Quintana Roo, México. Y lo ha hecho en medio de un arbitraje de inversiones que mantiene con una subsidiaria de la compañía
La Jornada | 28-Apr-2022
Frustrados quedaron los vendepatrias de administraciones anteriores y empresas mineras que se salivaban con el litio de nuestro país. Advierten que la nacionalización del litio en México contraviene al T-MEC.
The Daily Guardian | 21-Apr-2022
State exclusivity in the lithium value chain can violate the treaty between Mexico, the United States and Canada (T-MEC).

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