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)

Inequality.org | 21-Oct-2024
The country will likely have to pay over $30 million to an American litigation firm because it wanted to protect its environment from harmful seabed mining.
Radio-Canada | 21-Oct-2024
La poursuite de 20 milliards de dollars américains des promoteurs de GNL Québec contre le gouvernement canadien sera entendue en 2025. Le Canada plaide pour sa part que le tribunal ne devrait pas être saisi de cette affaire.
Greenpeace | 30-Sep-2024
completamente las decisiones tomadas por la Secretaría de Medio Ambiente y Recursos Naturales (SEMARNAT) de negar la autorización de la Manifestación de Impacto Ambiental (MIA) al proyecto “Don Diego” en el Golfo de Ulloa
Sputnik Mundo | 27-Sep-2024
El próximo gobierno de Claudia Sheinbaum enfrentará 23 demandas de compañías trasnacionales, interpuestos principalmente por empresas estadounidenses, canadienses y europeas en paneles internacionales en los que exigen a México pagos por más de 13.600 millones de dólares por presuntas violaciones a los tratados de libre comercio y de inversión.
Mongabay | 27-Sep-2024
Odyssey Marine Exploration, a deep-sea mining company based in Florida, sued Mexico after rejecting environmental permits for a phosphate mining project off the coast of the state of Baja California Sur.
CIAR Global | 23-Sep-2024
“Debido a las serias deficiencias de la resolución, y considerando las críticas expuestas por el árbitro disidente, la Secretaría de Economía iniciará un juicio de anulación del laudo ante las cortes competentes. Asimismo, el Gobierno de México hará valer todos los medios de defensa posibles.”
CIAR Global | 18-Sep-2024
La compañía estadounidense Odyssey Marine Exploration ha informado del laudo en el arbitraje de inversiones iniciado en 2019 contra México en el Centro Internacional de Arreglo de Diferencias relativas a Inversiones (CIADI).
Business Wire | 18-Sep-2024
The award orders Mexico to pay US$37.1 million for breaching its obligations under NAFTA, plus interest.
La Jornada | 11-Sep-2024
Hay que tomar muy en serio las amenazas de la Cámara Internacional de Comercio de más demandas en contra de México en tribunales internacionales ante la reforma judicial aprobada por la Cámara de Diputados la semana pasada, y actualmente en discusión en el Senado
ISDS América Latina | 9-Sep-2024
En 2023 México fue el país que más demandas de arbitraje de inversión recibió en el marco de tratados de protección de inversiones a nivel mundial.