Fair and Equitable Treatment: Methanex V. United States and the Narrowing Scope of NAFTA Article 1105
Bibliographic record
Abstract
I. INTRODUCTION The North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico, which became effective on January 1, 1994, followed in the footsteps of the Treaties of Friendship, Commerce, and Navigation and bilateral investment treaties (BITs) in providing protection to foreign investment. (2) The NAFTA's trilateral arrangement guarantees comprehensive protection to the investments of one NAFTA Party's investors in the territory of another. (3) Investment is defined broadly in Article 1139 of the NAFTA and includes ownership and other interests in an enterprise, equity or debt securities, real estate, and tangible and intangible property, including intellectual property. (4) Chapter 11 of the NAFTA addresses investment protection and sets out three objectives: (1) to establish a secure investment environment through the elaboration of clear rules of of foreign investment and investors; (2) to remove barriers to investment by eliminating or liberalizing existing restrictions; and (3) to provide an effective means for the resolution of disputes between an investor and the host government. (5) Article 1105 provides that [e]ach Party shall accord to investments of investors of another Party in accordance with international law, including and equitable and full protection and security. (6) The scope of Article 1105's investment protections is presently subject to great debate. Disputes recently arbitrated under the Chapter 11 dispute resolution mechanism have highlighted the tension between protections provided to investments and the power of governments, including state or provincial governments, to regulate. (7) Many of these disputes have involved environmental regulation. (8) The tension between investment protection and government regulation, combined with the broad definitions employed in the text of the NAFTA, has brought to the fore debate about the scope of these protections. The scope of and equitable has been addressed by several Chapter 11 arbitral tribunals and is presently being addressed in Methanex v. United States. (9) This Note will first consider fair and equitable treatment generally, as defined in BITs and customary international law. Second, this Note will review NAFTA Chapter 11 jurisprudence regarding the scope of and equitable treatment. Third, I will examine the Methanex proceeding in which the scope of and equitable is presently being considered. Fourth, I will evaluate the effects of the Free Trade Commission's (FTC) Interpretation of Certain Chapter 11 Provisions of July 31, 2001 (the Interpretation), in which the FTC clarified the scope of Article 1105's and equitable provision. Finally, I will suggest a logical interpretation of and equitable in light of Article 1105's text and purpose. A. and Equitable Treatment Generally Fair and equitable like many terms in the text of the NAFTA, is not defined. Traditional rules of treaty interpretation mandate that the terms of a treaty be interpreted in accordance with their plain meaning in light of the object and purpose of the treaty. (10) If the terms are ambiguous or the plain reading would lead to an unreasonable result, resorting to the travaux preparatoires, or negotiating history, is appropriate. (11) The travaux preparatoires for Chapter 11, however, are limited. (12) Critics of the NAFTA argue for a narrow interpretation of and equitable treatment, whereas proponents argue for a more expansive reading. Fair and equitable treatment is a term of international law that appears in BITs that the United States has entered into with other states, as well as in BITs between other states. Nearly all recent BITs require that investments and investors covered under the treaty receive 'fair and equitable treatment,' in spite of the fact that there is no general agreement on the precise meaning of this phrase. …
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.012 | 0.014 |
| Meta-epidemiology (narrow) | 0.000 | 0.001 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.007 | 0.010 |
| Scholarly communication | 0.009 | 0.004 |
| Open science | 0.003 | 0.004 |
| Research integrity | 0.017 | 0.011 |
| Insufficient payload (model declined to judge) | 0.010 | 0.001 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".