Claim by Corn Products International results in a sour result for Mexico and its sweetener industry

By Elizabeth Whitsitt
2 September 2009

The United Mexican States has suffered yet another setback in its long and protracted dispute with the United States of America over the sugar trade and the Mexican sweetener industry.

As noted in the May 2009 edition of ITN*, a NAFTA tribunal found Mexico liable to Corn Products International Inc. (CPI) for violating NAFTA Article 1102 after Mexico amended its excise tax legislation to impose a tax of 20% on any drink which used High Fructose Corn Syrup (HFSC) as a sweetener.  The tribunal, however, reserved its decision on damages.

On 18 August 2009, just over 19 months after the initial liability ruling, the NAFTA tribunal issued its damages award ordering Mexico to pay CPI damages in the amount of US$58.386 million.  The tribunal’s written decision on damages has yet to be made public and it is uncertain whether Mexico or CPI will try to set aside the award or pursue other available remedies.

The award is the largest issued to a successful claimant in a NAFTA Chapter 11 dispute to date.

*See “Tribunal rejects countermeasures defense in recently published Corn Products International Inc. v. the United Mexican States award”, By Elizabeth Whitsitt, Investment Treaty News, May 2009, available here: http://www.investmenttreatynews.org/cms/news/archive/2009/04/28/tribunal-rejects-the-defense-of-countermeasures-in-recently-published-corn-products-international-inc-v-the-united-mexican-states-award.aspx