Corporations in Canada and Mexico can take the U.S. federal government, as well as state and local governments, to court and seek monetary damages under the terms of the North American Free Trade Agreement (NAFTA). Canadian firms are already in the process of doing so and experts predict many more such cases in the future.
Although such cases cannot overturn U.S. laws, pay-outs would put pressure on U.S. politicians to reconsider them. Claimants in the five cases are seeking a total of $1.9 billion in damages.
The governments of Canada and Mexico know NAFTA has teeth, because they already have had to pay a total of $28 million to U.S. companies.
Over the past few years, lawyers have begun touting the potential for NAFTA litigation. But Senator John Kerry (Democrat, Massachusetts) has been promoting an amendment to the so-called fast track trade bill that would limit the scope for lawsuits.
Source: Carter Dougherty, Foreign Firms Hit Back at U.S., Washington Times, February 4, 2002.
For text http://www.washingtontimes.com/national/20020204-27623459.htm
For more on NAFTA http://www.ncpa.org/pd/trade/trade6.html
FMF Policy Bulletin\6 February 2002
