I did a recent post discussing NAFTA Chapter 11 non-discrimination standards, in the context of the Grand River Enterprises case. In response, I got a number of helpful comments, which made clear to me that there was a lot I did not know about NAFTA Chapter 11 non-discrimination standards. Rather than give up on the issue, though, I'm going to press ahead in the hopes of learning more!
To this end, let me turn now to the U.S. counter-memorial in the Grand River Enterprises case (my earlier post related to the Claimant's memorial). Before doing so, though, for the sake of providing some background, let me briefly summarize the parties' positions. The U.S. argues that the national treatment provision of Chapter 11 should focus on whether there is "a disproportionate benefit for nationals over non nationals." That is, the overall treatment of foreign investors should be compared to the overall treament of domestic investors who are in "like circumstance." By contrast, the claimants argue that the treatment of a single foreign investor as compared to any other investor is all that is relevant. If any individual foreign investor is treated less favorably than a competitor, there is a violation.
Getting into the details a bit more, in its counter-memorial the U.S. argues the following in support of its position that, in Grand River Enterprises, there is no violation of national treatment:
... Claimants make no attempt to demonstrate that any alleged less favorable treatment has been accorded to NPMs on the basis of nationality, as required for any national treatment claim under Article 1102. As recognized by the Loewen tribunal, the national treatment obligation under Article 1102 proscribes only “nationality-based discrimination and . . . demonstrable and significant indications of bias and prejudice on the basis of nationality.”294 Similarly, as found by the S.D. Myers v. Canada tribunal, analysis under Article 1102 involves considerations of “whether the practical effect of the measure is to create a disproportionate benefit for nationals over non nationals,” and “whether the measure, on its face, appears to favour its nationals over non-nationals who are protected by the relevant treaty.”295 All three NAFTA Parties agree that the national treatment obligation under Article 1102 is intended to protect against discrimination against an investor or investment on the basis of nationality.
The U.S. cites two cases as support for its view, and also notes that the NAFTA Parties all agree with this view.
I don't know much about how these proceedings go, but it seems to me that so far we have just touched the surface of the issue. We have the claimants citing cases in support of their view, and the U.S. citing cases in support of its view. What would be great, at least from my perspective, is to have a good debate on the merits of the issue, including a discussion of the impact of the different approaches. Perhaps that is coming in the next round of submissions or at the hearing.
