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the threats against Mexico from its partners
of the T-MEC for up to 30 billion dollars of retaliation with trade tariffs (https://bloom.bg/3S5Kthg), and with up to 20 billion dollars in investor-state disputes that would take them to the World Bank’s International Center for Settlement of Investment Disputes (ICSID), they have the backing of neoliberal technocrats. For example, Keneth Smith Ramos, former chief negotiator of the T-MEC for Mexico, and who makes use of the revolving door
between the public function and private interests and now works for the legal consulting firm for private companies AGON, he recently made statements to the publication Inside US Trade (https://bit.ly/3S5Iv0m) against the government of Mexico and in favor of the United States and Canada. Mexico argues that in the T-MEC the Recognition of the Direct Domain and the Inalienable and Imprescriptible Ownership of the United Mexican States of Hydrocarbons
(see chapter 8: https://bit.ly/3oAAtiA). Smith Ramos responds in the interview that this does not deny that he has commitments cited in the recent request for consultations by the United States, made in other chapters of the treaty, including access to markets, state-owned companies and investments.
Smith Ramos advises the United States that the logical thing is that the next step it should take is to “use this consultation period to increase political pressure and say that ‘I am going to go to a panel (of investment disputes) if you do not resolve this matter that I have been mentioning to you for a year and a half, and see how Mexico (sic) reacts” (own translation). She also says that while chapter 8 repeats what our Constitution establishes that although hydrocarbons are property of the Mexican nation and that Mexico is a sovereign country that can change its Constitution whenever it wishes, it does not mean that if you change it, or laws and regulations, that you have a exception of complying with the requirements of the T-MEC
(own translation). What a demonstration of the interpretation that international trade treaties take precedence over the Constitution and national sovereignty.
But let’s pass the discussion of chapter 8 to that of chapter 14 of investments of the T-MEC, to which Smith Ramos refers, in defense of foreign interests. Despite the fact that the latter clearly stipulates that the investor-State lawsuits are limited to government contracts between US companies and Mexico (and not Canadians, since this country is excluded from this regime), the Peña government left him a time bomb at 4T; so called in english legacy clause
of NAFTA. For unknown reasons, the term was not used in the Spanish text. legacy
but clause of transition for existing investment claims
. See Annex 14-C of the TMEC (https://bit.ly/3zfLPxB), providing that each party consents, with respect to an existing investment, to submit a claim to arbitration under Section B of Chapter 11 (Investment) of the NAFTA 1994 and that a party’s consent under paragraph one will expire three years after the termination of NAFTA in 1994. The termination of NAFTA was on July 1, 2020, that is, its chapter 11 remains in force until June 30, 2023. This is how the legacy clause
of NAFTA is and will continue to be used by corporations under the T-MEC, until such date, against the three North American countries.
The first investor-state lawsuit under the legacy clause
was against Canada at the end of 2020. It is the case brought by Koch Industries and Supply & Trading, a fossil fuel trader, which denies climate change and sued Canada for the cancellation of an environmental measure that would modestly increase costs for companies , with the aim of encouraging the reduction of carbon emissions.
In December 2021, Canada-based pipeline operator TC Energy and TransCanada filed a NAFTA/T-MEC lawsuit against the US, for the second time, for more than $15 billion. This case is a retaliation against President Biden’s decision to revoke the permit for the Keystone XL project, considering it incompatible with efforts to address climate change and in response to the demands of indigenous communities. The company had first sued the United States after the Obama administration revoked its permit, but had dropped the lawsuit when the Trump administration restored it.
Mexico has already received three lawsuits under the legacy clause
of NAFTA in the T-MEC: a) last year the US communications company L1bre Holding sued him for an unknown amount; b) the oil company, also American, Finley Resources (and others) for 100 million dollars, and c) the Canadian mining company Finley Resources for 500 million dollars.
Thus, between now and June 30, 2023, Mexico’s sovereignty will continue to be subjugated by the investment protection clauses of NAFTA. Although Jesús Seade –representative of the 4T transition team in the T-MEC negotiations– assures AMLO that there is no problem
and that the treaty is not violated, the real ring in all the possible demands that are brought before the ICSID will be Chapter 11 of NAFTA, a detail that, due to its own protection, the 4T should never have endorsed.
*Researcher at the Institute for Policy Studies www.ips-dc.org
Twitter: @ManuelPerezIPS
