Should Methanex have used the NAFTA agreement to advance its own commercial interests?
Methanex’s claim is precisely what the NAFTA Chapter 11 was intended for. Chapter 11 explicitly provides mechanisms for resolving disputes of this kind. The NAFTA’s basic purpose is to liberalize trade and encourage investment. The actions Methanex took were designed to protect its US investment against the kind of arbitrary action California has taken. The NAFTA Chapter 11 cannot change California’s laws; it can only result in the award of damages actually incurred by the claimant. It is also important to note that Chapter 11 of NAFTA itself is modelled after the hundreds of bilateral investment treaties that have been negotiated by the United States and other countries to protect foreign investors from similar actions.
