NAFTA chapter 11 and the harmonization of domestic practices

Chapter 11 of the North American Free Trade Agreement (NAFTA),1 which
authorizes arbitral tribunals to resolve investor-state disputes arising under
the NAFTA,2 is shaping international investment law. It has the potential to
influence, as well, the conduct of key state actors within the United States,
Canada, and Mexico. Chapter 11 arbitral tribunals enforce the NAFTA state
parties’ promise to protect certain foreign investment and, in some cases,
the investors.3 Tribunal awards have helped establish the contours of the
substantive investment obligations.4 In assessing domestic conduct and practices, the awards have also struck at matters essential to each NAFTA state’s
sovereignty. For example, the decisions of courts and government agencies
of the NAFTA states, whether at the local or federal level, have been and
continue to remain the subject of tribunal review in hotly contested matters.5