Fact Sheet: NAFTA 2.0 and Investor-State Dispute Settlement (ISDS)

U.S.-Canada ISDS Is Terminated, Expansive Investor Rights Eliminated and New Review Procedures Mostly Replace ISDS Between U.S. and Mexico

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The ISDS provisions of the original North American Free Trade Agreement (NAFTA) – Chapter 11-B – are eliminated in the NAFTA 2.0 text published on September 30, 2018. To date, hundreds of millions of dollars in North American taxpayer funds have been awarded to corporations using NAFTA’s ISDS regime to attack domestic environmental and health policies. These infamous NAFTA ISDS payouts to
corporations would not have been possible under the proposed NAFTA 2.0 Investment Chapter terms. In the NAFTA 2.0 text, ISDS between the United States and Canada is altogether terminated three years after the new agreement goes into effect. Given high levels of U.S.-Canada cross investment, this change would prevent numerous future ISDS attacks. All but one of the past NAFTA ISDS payouts that related to
environmental issues involved U.S. firms attacking Canadian toxics bans and timber, energy, mining and other policies. Terminating U.S.-Canada ISDS also would eliminate 92 percent of U.S. ISDS liability under NAFTA and most U.S. ISDS exposure overall.