US-Mexico Deal Discriminates Some Investors
Excludes Chapter 19, but keeps ISDS arbitration mechanism.
The United States-Mexico Trade Agreement—which is how the proposed replacement to the existing North American Free Trade Agreement (NAFTA) is being officially referred as—was announced August 27 by the White House. The new agreement will exclude the Chapter 19 antidumping dispute settlement mechanism of NAFTA, but leave the investor state dispute settlement (ISDS) arbitration process.
Partner Luis Rubio Barnetche was a member of the team that negotiated the original NAFTA on behalf of the Mexican government. Mr. Rubio told Latinvex that "not all investors will have the same level of protection" under the U.S.-Mexico Trade Agreement. "There will be some sort of investors class A and investors class B, it would be interesting to understand what was the criteria and rationale to provide more or less protection to either class, as that could be discriminatory in itself."
Mr. Rubio also pointed out that the exclusion of Chapter 19 will complicate the U.S.'s ongoing negotiations with Canada, which has previously expressed "strong views" with regard to a need for the mechanism. If a deal cannot be made with Canada, further complications may arise with gaining U.S. congressional approval of the U.S.-Mexico deal. "We will have to wait for Canada. Each country has its own agenda, but I would assume NAFTA has a similar relevance to Canada as it does for Mexico and the U.S., hence eventually we will continue trading as a bloc," stated Mr. Rubio.