Research On The Case Of Merrill & Ring Forestry L.P. V. The Government Of Canada For Certain Measures

Canada is abundant in forest resources so that the forestry is one of the crucial pillar industries of the national economy. In 2013, the forest industry’s contribution to Canada’s GDP was $19.8 billion. And over 210,000 people were directly employed in the forest industry in the same year especially people of the remote areas. Taken the significant status of forestry and the unrenewable nature of forest resources into consideration, the Government of Canada approved Notice to Exporters, Export and Import Permits Act, Serial No.102(hereinafter referred as Notice 102), which was subject to Export and Import Permits Act R.S., 1985, c. E-19, in order to set specific regulations on the removing, processing and exporting of logs.The Claimant in this case, Merrill & Ring Forestry L. P., is an American forestry enterprise located mainly in British Columbia of Canada. On December 27, 2006, the Claimant served upon Canada a Notice of Arbitration and a Statement of Claim submitted to the Tribunal, the latter detailing the measures related to the Notice 102 and the relevant regulations that Claimant alleged breached the obligations of Canada under certain provisions of the North American Free Trade Agreement(hereinafter referred as NAFTA). The Tribunal ruled on March 31, 2010, and rejected the claims.In recent years, the rapid developing demand of logs in China makes it extremely urgent to expand the overseas resource market. The United States, Papua New Guinea, and New Zealand are traditional forestry-exporting countries, whose supplies have decreased in the past years. Canada is becoming the promising market for China’s overseas investment on forestry. The Government of the People’s Republic of China and the Government of Canada have signed a bilateral agreement for the promotion and reciprocal protection of investments. However this agreement just came into force for a very short time so that no disputes have settled according to it. Contrarily, NAFTA is a multilateral trade agreement which has come into operation for a quite long time. And the practice of its Chapter 11 has proved it a relatively mature pattern for the settlement of the investment disputes.This paper is based on the case that Merrill & Ring Forestry L.P. and the Government of Canada. According to the Claimant’s specific claims, it will deeply analyze the correspondences between the Notice 102 and Article 1102, Article 1106, Article 1110 and Article 1130 of NAFTA, finally further analyze the enlightenment to China.The full text consists of three parts, as follows:The first part: the basic situation of the case. This part is divided into three sections: firstly, the introduction of the background and a complete description of the development process of disputes, from Claimant’s request for arbitration to the reports released by the Tribunal; secondly, the summary of the main focuses of the dispute between parties. The detail will be elaborated in the subsequent second part; thirdly, a brief summary of the Tribunal’s decision.The second part: analysis of the case.Firstly, the argument of the relationship of the Notice 102 and Article 1102 of NAFTA, which relates to the National Treatment. In this section, this paper will respectively analyze the relationship between the Notice 102 and two main concepts of Article 1102, namely “Legitimate Comparison Objects” and “Like Circumstances”, then argue the compliance this Notice with this Article 1102.Secondly, the argument of the relationship of the Notice 102 and Article 1106 of NAFTA, which relates to the Performance Requirements. This section successively analyze the correspondence of the Notice 102 and the Article 1106(1)(a),(c) and(e). Then further argue the relationship of the two.Thirdly, the argument of the relationship between Canada’s measures of “expropriation” with Article 1110, Article 1139 of NAFTA. This section begins with the definition of investment of NAFTA Article1139, and analyze whether the disputed measures constitute the investment protected by NAFTA and the relationship of the above measures and NAFTA Article 1110, then draws the corresponding conclusion.The third part: the enlightenment to China. This part compares NAFTA and the bilateral agreement between China and Canada in regard of the above articles, and then summarizes several key references from the practice of NAFTA. Then put forward suggestions for the future settlement of investment disputes based on the bilateral agreement.