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NAFTA and North American Trade · US History

The 'Investor-State Dispute Settlement' (ISDS) mechanism in NAFTA allowed:

  1. Ordinary voters to directly sue their own national governments over trade policy
  2. The U.S. military to take over Mexican border ports during a labor strike
  3. Mexico to formally demand financial reparations for the entire 1840s war
  4. Corporations to sue governments over regulations that harmed their profits
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Correct answer: Corporations to sue governments over regulations that harmed their profits

ISDS was one of the most controversial parts of NAFTA. Critics argued it gave multinational corporations too much power to bypass local courts and challenge environmental or health laws in international tribunals.

Difficulty: Medium Question 12 of 20

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