Clinton Signs NAFTA Creating Corporate Tribunals to Override National Laws

President Bill Clinton signs the North American Free Trade Agreement (NAFTA) into law, creating the first major free trade agreement to include Investor-State Dispute Settlement (ISDS) provisions binding developed nations. NAFTA’s Chapter 11 establishes corporate tribunals that allow multinational corporations to bypass national court systems and sue governments directly for regulations that might reduce expected future profits, with disputes decided by panels of three corporate attorneys rather than judges.

Clinton’s signing ceremony featured bipartisan support, with Vice President Al Gore, National Economic Council Director Robert Rubin, and Republican Congressman David Dreier present. The agreement passed with 34 Republican Senators voting in favor, representing a fundamental reorientation of the Democratic Party toward corporate interests and away from labor and environmental protections.

The ISDS mechanism represents a dramatic expansion of corporate power, effectively allowing companies to challenge democratically enacted laws on labor standards, environmental protections, and public health regulations. This innovation in corporate capture would trigger an explosion of investor-state cases in the late 1990s and establish a template for future trade agreements that prioritize corporate profits over national sovereignty and democratic governance.