The Debate Around NAFTA’s Chapter 11:
The Case of MMT and Canada

Introduction
The North American Free Trade Agreement (NAFTA) is an agreement liberalizing trade and investment between Canada, the United States, and Mexico. From the moment it took effect on January 1, 1994, the agreement has sparked controversy and fiery debate from groups across the political spectrum regarding its benefits and costs.[i] Much of this debate revolves around Chapter 11, the section of the agreement that deals with investor-state relations. Chapter 11 gives foreign investors the right to sue the host government for damages if they believe they have been treated unfairly. In 1996, the Ethyl Corporation filed a $250 million claim against Canada under Chapter 11 regarding a gasoline additive they produced called MMT.

Background

• Methylcyclopentadienyl manganese tricarbonyl (MMT)

MMT is an octane-improving fuel additive. The chemical compound was developed in the 1950s by what became the Ethyl Corporation (today part of the Afton Chemical Corporation, but hereinafter referred to as “Ethyl”).[ii] MMT was widely used in the United States and Canada, during the 1960s and 1970s in leaded gasoline. However, due to public health concerns, MMT was banned in the late 1970s by the U.S. Environmental Protection Agency (EPA).[iii] The health effects of exposure to manganese through its use in MMT are under research. Manganese, the main component of MMT, is a common element of our diets in low levels. However, at high levels, manganese has been shown to be a neurotoxin that can cause irreversible neurological damage.[iv] For example, manganese is among the leading toxins that are linked to developmental disabilities.[v] Ethyl claims “MMT has demonstrated no identifiable risk to public health;”[vi] however, the EPA says, “Although it is not possible based on present