The Big Business Push to Resurrect NAFTA’s Corporate Courts
Investor-State Dispute Settlement and the USMCA Review
By Iza Camarillo
As the mandatory six-year review of the U.S.-Mexico-Canada Agreement (USMCA) commences, some of the most powerful corporations in the United States are pushing to resurrect a discredited system of private tribunals that, for decades, allowed them to pressure governments, sidestep domestic courts, and undermine public-interest regulation.
The original North American Free Trade Agreement (NAFTA) granted sweeping, one-sided privileges to foreign investors through the Investor-State Dispute Settlement (ISDS) system. ISDS allows corporations to bypass domestic courts and sue governments in supranational tribunals staffed by private arbitrators. It enables corporations to challenge environmental protections, Indigenous land rights, mining restrictions, and public health rules, extracting billions from taxpayers or chilling reforms before they are even enacted. After decades of mounting cases and public outcry, ISDS generated a rare bipartisan alignment as Republicans and Democrats alike came to oppose ISDS as economically unjustified and democratically corrosive.
That bipartisan rejection and sustained civil society pressure produced one of the USMCA’s most meaningful improvements. ISDS was entirely eliminated between the United States and Canada, and sharply narrowed with Mexico. It was an overdue course correction to restore space for public interest regulation without the constant threat of corporate retaliation through arbitration. The Biden administration continued to move away from ISDS, explicitly stating that it would not pursue ISDS in any future trade agreements.
Now, as civil society across all three countries pushes to finish the job and remove ISDS from the USMCA entirely, corporations are trying to take North America backwards. In public comments to the Office of the U.S. Trade Representative (USTR), corporate lobbyists reveal a campaign to restore the full suite of NAFTA-style investor privileges that two administrations and a broad coalition of civil society worked deliberately to dismantle.
- The Business Roundtable, for example, representing the CEOs of more than 200 of the largest corporations in the United States, including GM, United Airlines, JPMorgan, Chase, Apple, FedEx, and Walmart, urges the administration to restore full ISDS privileges with Mexico, arguing that domestic courts cannot be trusted to resolve disputes involving U.S. investors.
- The Chamber of Commerce urges the administration to preserve and strengthen the deal’s corporate protections, calling them the “bare minimum.”
- The National Mining Association (NMA), “the voice of the U.S. mining industry,” includes an extremely detailed set of ISDS demands in its comment submission, calling for the full suite of broad investor rights to be reinstated against both Mexico and Canada, and/or for mining to be designated among a privileged list of sectors that retains ISDS rights for contracts with the Mexican government. The mining industry is a notorious user of ISDS worldwide, challenging governmental efforts to preserve sensitive environments and uphold human rights of nearby communities.
Big Business is taking an “offense is the best defense” approach because they know the movement against ISDS only continues to grow stronger. Representatives Lloyd Doggett and Rosa DeLauro recently led 130 House Democrats in letters urging USTR to remove ISDS from the USMCA completely, the largest congressional coalition to date calling for ISDS to be removed from an existing agreement. What was once a niche concern shrouded in mystery is squarely in the political mainstream.
A recent Mexican civil society delegation that traveled to Washington echoed these concerns, warning that attempts to reinstate ISDS provisions would intensify extractivism, dispossess communities, and entrench a trade model that, for 30 years, has driven inequality, forced migration, and environmental degradation.
In the USMCA review, policymakers can finish the job of dismantling a system that subordinated public governance to private tribunals by removing ISDS once and for all, or they can capitulate to the most powerful corporations in North America and restore a regime designed to place profit above people, sovereignty, and democracy.
North America does not need a return to corporate courts. It requires a framework grounded in governments’ ability to govern for the people and the planet. Trade rules should support clean manufacturing, fair competition, and environmental protection, not grant corporations special rights that undermine those goals.