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ARTICLE · 15 NOVEMBER 2005

NAFTA Panel Rejects WTO Approach to Anti-Discrimination Rules

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The ability of NAFTA Chapter 11’s anti-discrimination rules to discipline discriminatory legislation has been called into question in the decision dismissing the challenge by Methanex of California’s ban on fuel additive MTBE. While many aspects of the decision are noteworthy, its treatment of Chapter 11’s anti-discrimination provisions is remarkable in rejecting the longstanding approach to these issues under the GATT and WTO Agreements.

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Article by Ken Purchase, ©2005, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on International Trade - November 2005

The Methanex decision creates an interpretive chasm between similarly worded provisions in NAFTA and WTO agreements while arguably opening the door for protectionist legislation.

Introduction

The ability of NAFTA Chapter 11’s anti-discrimination rules to discipline discriminatory legislation has been called into question in the decision dismissing the challenge by Methanex of California’s ban on fuel additive MTBE. While many aspects of the decision are noteworthy, its treatment of Chapter 11’s anti-discrimination provisions is remarkable in rejecting the longstanding approach to these issues under the GATT and WTO Agreements.

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