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Double Fora : WTO and NAFTA ( Ch. 11 on Investment ) In the light of Mexico - Tax on soft drinks

This article discusses the Mexican experience in the DSU, focusing on the double fora of NAFTA and WTO. It explores the impact of Mexico's tax on soft drinks and examines relevant cases in NAFTA Chapter 11. The article also presents hypothetical examples and a comparative chart, raising questions about the effectiveness of parallel cases in both fora.

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Double Fora : WTO and NAFTA ( Ch. 11 on Investment ) In the light of Mexico - Tax on soft drinks

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  1. Double Fora: WTO and NAFTA (Ch. 11 on Investment)In the light of Mexico - Tax on soft drinks Jorge A. Huerta-Goldman

  2. Why this Topic? 1. Thesis: Mexican Experience in the DSU, 20 years (Supervised by P. Mavroidis) 2. One of the issues of the thesis: • Double fora (NAFTA / WTO)

  3. Agenda • The Double Fora (WTO / NAFTA) • Mexico - Soft Drinks • NAFTA Ch. 11 Cases • Hypothetical Examples • Comparative Chart • Questions

  4. 1. The Double Fora (WTO / NAFTA) 1. The WTO and the Covered Agreements • Covered agreements (substantive law) • DSU (procedural law) 2. The NAFTA • Chapter XX - Dispute Settlement Procedures • Chapter XIX - Review and Dispute Settlement in AD and CVD • Chapter XI - Investment • Part A- Investment (substantive law) • Part B - Settlement of Disputes (procedural law)

  5. 2. Mexico - Soft Drinks • Sugar is Mexico’slargestagriculturalindustry. • More than 300,000 jobs in the sugar industry. • 2.2 million people depending on the industry. • US market access problems. • Substitutes of sugar (HFCS).

  6. 2. Mexico - Soft Drinks • Mexicoimposed ADD to HFCS. • WTO and NAFTA XIX cases • Mexico expropriated mills. • NAFTA Ch. 11 Cases • Mexico imposed 20% tax (NT). • Soft drinks • NAFTA Ch. 11 Cases

  7. 2. Mexico - Soft Drinks • The US challenged LIEPS from 2002 • (Different treatment for Mexican sugar and other sweeteners). • Issues in front of the Panel • Request to decline jurisdiction in favor Chapter 20 of NAFTA • Claims under Article III of the GATT 1994 (NT) • Defense under Article XX.(d) of the GATT 1994 • Mexico´s request on certain actions by the Panel: • To carefully formulate its findings and recommendations to avoid a pre-judgment of other legal rights—i.e., investor-state disputes under Chapter 11 of NAFTA. • To recommend the parties to take steps to solve the sweeteners dispute—i.e., market access to Mexican sugar to the US market under the NAFTA. • US won.

  8. 3. NAFTA CH 11 Cases

  9. 4. Hypothetical Examples • Hypothetical Example 1 • Assume the LIEPS exempts HFCS from Guatemala but not from the US. • We may have the same claims but for MFN

  10. 4. Hypothetical Examples • Hypothetical Example 2 • In Case C-265/95 Commission Vs France. • Adoption of all necessary and proportionate measures in order to allow free movement of goods • Actions by private individuals • France lost the case • Assume warehouse / transportation services in France by Spanish trader. • Violation of Art.1105 NAFTA (Minimum Standard)?

  11. 5. Comparative Chart

  12. 6. Questions • Could we have other cases in WTO/NAFTA 11 beyond NT / MFN / minimum standard? • What if both remedies are applied? (N or I = X – NAFTA 11 remedy?) • What if one panel says black and the other says white? • Is WTO ready to deal with parallel cases under NAFTA Ch. 11? Is ICSID ready? • Would a finding in one forum be equally effective in the other forum?

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