Nafta's Takings Rule: American Constitutionalism Comes to Canada

Schneiderman, David

doi:10.2307/825985

Cited by 25 publications

(10 citation statements)

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“…Taking the 1994 North American Free Trade Agreement (NAFTA) as our point of departure, it is fair to say that, though many elements of the regime prompted cautious concern or criticism, there was an overriding anxiety focussed on the clause prohibiting expropriation and nationalization, direct or indirect, or measures tantamount thereto (the "takings clause") (Banks 1999, Been and Beauvais 2003, Dumberry 2001, Robinson 1993, Schneiderman 1996, Wagner 1999. This made some sense as the prohibition most resembled the takings rule in U.S. constitutional law, which had been described as a "mess" and "conceptual morass" (Dana and Merrill 2002, p. 163-64, Poirier 2002, p. 138, Sax 1964.…”

Section: 1shifting Groundsmentioning

confidence: 99%

Legitimacy and Reflexivity in International Investment Arbitration: A New Self-Restraint?

Schneiderman¹

2011

Journal of International Dispute Settlement

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There are at least two views within investment arbitration about how to respond to legitimation problems associated with inconsistent rulings, latitudinal interpretations, and arbitral bias and conflicts of interest. Some prefer to keep the regime on course and not respond to these outside perturbations. Others prefer to take into account external influences, such as human rights and environmental commitments, in the course of investment treaty interpretation. Both understand that, whatever the response, these questions will be determined by lawyers, scholars, and arbitrators operating within the system of international investment law and not by actors operating outside of it. Both views, in other words, are congenial to systems-theoretic accounts. As articulated by Teubner, there is a proliferation of functional legal subsystems , developing autonomously of states, each of which, in the course of maximizing internal rationality, potentially is on a collision course with other operative subsystems. These can only be forestalled if subsystems act reflexively by devising strategies of self-limitation that selectively internalize objections emanating from external spheres. As this maps on to selfunderstandings of actors operating within investment arbitration, this paper takes up systems theory as a heuristic for assessing the regime's responsiveness to outside influences. In order to take stock of the degree of reflexivity, the paper examines the direction investment law is taking in a few key areas: first, in the shift in emphasis away from expropriations (the 'takings rule') to the fair and equitable treatment standard, which is performing similar functions; second, in the attempt to merge global standards by embracing World Trade Organization Appellate Body decision making; and third, the hesitant embrace of proportionality doctrine as a means of weighing public interests into the equation. These moments of reflexivity turn out to be modest in reach and so unlikely to calm objections emanating from states and social movements. What likely will be necessary is

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Section: 1shifting Groundsmentioning

confidence: 99%

Legitimacy and Reflexivity in International Investment Arbitration: A New Self-Restraint?

Schneiderman¹

2011

Journal of International Dispute Settlement

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“…A n interlocking network of rules for the protection and liberalization of FDI can be found in BITs, in regional trade agreements such as NAFTA and the European Energy Charter Treaty, and at the multilateral level in the Agreement on Trade-Related Investment Measures (TRIMS) (Fatouros 1996). The World Bank has issued Guidelines on the Legal Treatment of Foreign Investment (Shihata 1993), and a similar set of nonbinding investment principles has been agreed to in Asian Pacific Economic Cooperation ( APEC), while the OECD attempted, unsuccessfully, to complete the Multilateral Agreement o n Investment (MAI) to which other states outside the OECD would have been invited to accede (Schneiderman 1999b). These instruments of state discipline and neoliberal principle "reflect a remarkable consensus" (Parra 1996, 3 1): the world is now safe for foreign investment.…”

Section: The Regime Of Investment Rulesmentioning

confidence: 99%

“…This is not the conclusion suggested by Canada's experience under NAFTA, at least as regards the prohibition on expropriation and nationalization. Interested investors within United States have invoked NAFTA's rule to help subvert the government of Canada's proposal for the plain packaging of cigarettes (Schneiderman 1996), and the repudiation of contracts to privatize Terminal 2 at Toronto's Pearson Airport, entered into by a prior government (Globe and Mail 1994). Recently, Time magazine threatened to use NAFTA's expropriation provision to challenge a proposed federal law that would have banned "split-run" 8.…”

Section: Agreements Withmentioning

confidence: 99%

“…The Canadian federal government, subsequent to an internal trade ruling favoring the free movement of MMT between the borders of Canadian provinces, settled the Ethyl claim for $13 million (U.S.) in the summer of 1998 and issued a press release proclaiming that MMT was nontoxic-this despite the fact that MMT is banned in most US. states and in Europe (Schneiderman 1999a). Since the settlement with Ethyl, a complaint has been launched against Canada by S. D. Myers Inc. for losses suffered as a result of a temporary ban on the export of PCB-contaminated waste to the United States from 1995 to 1997 (Globe and Mail 1998; Wagner 1999).…”

Section: Agreements Withmentioning

confidence: 99%

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Investment Rules and the New Constitutionalism

Schneiderman¹

2000

Law soc. inq.

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The new model for economic and political renovation mandates the entrenchment, beyond the reach of majoritarian control, of rules for the free movement of transnational capital. This “new constitutionalism” removes key aspects of economic life from the influence of domestic politics within nation states. A manifestation of this new orthodoxy is the network of bilateral investment treaties designed to ensure foreign investors security from “discrimination” and “expropriation,” and conferring standing on investors to sue in the event that their investment interests are impaired. This paper examines the agency of the state in promoting this self‐binding regime of investment rules and its potential impact on domestic constitutional regimes. Of particular concern here are constitutional arrangements that protect property, such as that recently enacted in the Republic of South Africa, that deviate from the norms expressed in the transnational investment‐rules regime.

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“…Given the variety of measures caught by this rule, it comes as no surprise that businesses have invoked the version of the expropriations rule in NAFTA (or an earlier incarnation in the Canada-US Free Trade Agreement) to challenge market regulations that impair their investment interests. A public auto insurance plan, 26 proposals for the plain packaging of cigarettes, 27 and the cancellation of contracts to transfer public property into private hands (Toronto's Pearson Airport) 28 all triggered threats of litigation under NAFTA. While threats alone do not trigger NAFTA's dispute settlement procedure, they played a role in limiting the range of social policy choices available to these governments.…”

mentioning

confidence: 99%