ISDS to be phased out over three years for Canada, pared down with Mexico — Inside U.S. Trade

Riyaz Dattu

Oct 5, 2018

The investor-state dispute settlement mechanism (ISDS) between the U.S. and Canada will be phased out in three years if the U.S.-Mexico-Canada Agreement (USMCA) enters into force, according to an article in Inside U.S. Trade. In his article, author Brett Fortnam explores the scope of the USMCA’s investment chapter and investor protections. The article focuses on how under the USMCA, investors can submit a claim to arbitration under “three annexes that cover legacy investments, U.S.-Mexico investment disputes, and U.S.-Mexico investment disputes related to covered government contracts.” According to the article, a legacy investment is defined as “an investment made during the lifetime of the North American Free Trade Agreement.” Riyaz Dattu, a partner in Osler’s International Trade Group who has written extensively on international trade issues, explains what this means.

“Leaving investments made before 1994 without investor protections is unlikely to have a major impact because investors have likely infused new equity or debt into those original investments, allowing them to qualify as a legacy investment,” Riyaz tells Inside U.S. Trade.

Riyaz also tells Inside U.S. Trade that “Canada was willing to dispose of ISDS because it is most commonly the respondent in cases brought by U.S. investors.”

If you subscribe to Inside U.S. Trade, read author Brett Fortnam’s full article “ISDS to be phased out over three years for Canada, pared down with Mexico” on October 5, 2018.