Infringing on Investment: How One Company is Using Investment Protections of NAFTA to Save its Intellectual Property

Abstract

In 1994, twenty years ago, the United States, Canada, and Mexico signed the North American Free Trade Agreement (“NAFTA”) into law.1 It had a number of goals, including the intent “to eliminate barriers of trade and investment between the United States, Canada and Mexico.”2 NAFTA has a number of provisions to achieve its goals, including decreasing the tariff between the three countries in order to increase trade.3 The decreasing tariff was intended to lower trade barriers with the hope of making consumer products cheaper.4 With respect to a number of consumer products, this hope was made into a reality.5 Importation from Mexican and Canadian factories without trade barriers made a number of goods, including automobiles, electronics, and clothing, cheaper in the United States.6 However, there is one area of consumer products that did not achieve the hoped for price decline in the United States: the prescription drug industry. There is a long-held belief in the United States that prescription drugs are made available at cheaper prices in countries such as Canada because of the availability of generic drugs.7 While this may not always be true in the cases of some prescription drugs,8 there is a basis for this claim.9