| Press Statement Adam Ereli, Deputy Spokesman Washington, DC August 10, 2005 NAFTA Tribunal Dismisses Methanex ClaimIn a major victory for the United States, a three-member NAFTA arbitration tribunal yesterday dismissed a $970 million claim filed by a Canadian methanol producer challenging California’s regulations of the gasoline additive MTBE. The tribunal also awarded $4 million to the United States in costs. The decision represents a vindication of the prerogative of states to take action to protect public health and the environment without running afoul of the investment protection provisions of international trade agreements and investment treaties. The Office of the Legal Adviser of the Department of State represented the United States in the case. The claimant, Methanex Corp., submitted its claim to arbitration in 1999 alleging that California’s ban of the use of MTBE in gasoline was a violation of the NAFTA’s investment protections. The arbitrators unanimously dismissed Methanex’s claim on jurisdictional grounds and determined further that, even if they had jurisdiction, the claim also failed on the merits. In an unprecedented step, the Tribunal also ordered Methanex to pay the United States more than $4 million in legal costs and arbitral expenses. The Tribunal’s decision demonstrates that U.S. trade agreements and investment treaties do not encroach on governments’ legitimate right to regulate in the public interest. It should reassure those who are concerned that investor-State dispute provisions in U.S. free trade agreements and investment treaties threaten state or federal prerogatives in regulating to protect public health and the environment. Moreover, the Tribunal’s award of costs to the United States should discourage similarly baseless claims from being brought in the future. 2005/774 |
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