The Cargill v. Mexico NAFTA Chapter 11 award is available here. It was sent to the parties in September 2009, but it is just now being released publicly.
In this post, I'm just going to make a quick point about the National Treatment analysis. When I first started reading the "less favorable treatment" section, I thought the tribunal was going to take an "individual" investor approach. In this regard, they present the issue by saying they will consider:
whether Cargill de Mexico, as a supplier of HFCS, received "less favorable treatment" than the suppliers of cane sugar.
(para. 215) When I saw the reference to the specific company, Cargill de Mexico, I thought for sure they would undertake a comparison of the one foreign investment to one or more domestic investments.
But then when they get to the reasoning, things take a different turn:
219. In the Tribunal's view, there is no question but that, as a result of the IEPS Tax, the treatment received by suppliers of HFCS to the Mexican soft drinks industry was less favourable than the treatment received by suppliers of cane sugar. HFCS suppliers could no longer compete as a result of the IEPS Tax, whereas cane sugar suppliers were not affected.
220. Moreover, the Tribunal also concludes that the discrimination was based on nationality both in intent and effect. The IEPS Tax was taken avowedly to bring pressure on the United States government. By its very design, then, it was directed at United States producers of HFCS because only in that way would pressure be brought to bear on the United States government. The import permit requirement, which was intended by the Mexican government to be a substitute for the IEPS Tax, was even more directly targeted at United States producers, even though it may have affected other nationals as well. The whole history of this case, as set out by both Claimant and Respondent, indicates that it is about measures directed at United States producers and suppliers of HFCS.
Paragraph 219 talks about discrimination against HFCS suppliers and in favor of sugar suppliers. I'm never sure what to make of this kind of statement. Does the tribunal think that discrimination against a particular product is enough for a violation? If so, on what basis?
Then along comes paragraph 220. It's not clear how the two paragraphs relate, but regardless, I really like paragraph 220, so I'm going to focus on that one. Here, the tribunal says that "the discrimination was based on nationality both in intent and effect." Regular readers of this blog can probably guess that I'm a big fan of this sentence. Not only do they talk about "nationality" based discrimination, but they also rely on "intent and effect."
Of course, it's important to note that they are not saying intent and effect are the only factors to consider, or are required factors. Nevertheless, the tribunal did take these into account as key issues in its "less favorable treatment" analysis.
