The Notion of Discrimination in Article 1102 of NAFTA

Abstract: It is clear that Article 1102 of NAFTA was not intended to prohibit all kinds of differential treatment between foreign and domestic investors. Therefore, what kind of discrimination does Article 1102 outlaw? Many would confidently answer: discrimination aimed at protectionism. However, if Article 1102 makes no reference to the Parties’ intent, how can the apparently ‘objective’ standards of “like circumstances” and “less favorable treatment” be used to identify the protectionist aim? Is the GATT Article III jurisprudence helpful in this task? How have the Chapter 11 panels sorted out this problem? These are some of the questions this paper will address.