Antoni's Wire Service

Date: Tue, 16 Feb 1999 22:46:26 -0400 (AST)
From: Antoni Wysocki
To: Antoni's Wire Service
Subject: NAFTA takes another chunk

Hey everybody,

The investor-state dispute settlement mechanism of the North American Free Trade Agreement (NAFTA) has been invoked again; or, as today's Globe & Mail headline had it: "Another U.S. firm sues Ottawa under NAFTA".

Writing in the Tuesday, February 16/99 edition of the G & M, Heather Scoffield reported that Pope & Talbot Inc., a US forest products concernment based in Portland, Oregon, has filed for $30-million (U.S.) in damages against the Canadian government. Ironically, Pope & Talbot's complaint arises from restrictions on Canadian lumber exports adopted by Ottawa under pressure from Washington.

It is hard to imagine a more pellucid demonstration of the absurdity of Canada's trade policy. Here we have an American firm suing the Canadian government, using provisions of a treaty which Canada signed to please Washington, because Canada has voluntarily embargoed its own products at the behest of the supposedly pro-"free trade" American government, which prevents the American company from shipping all the wood it wants to out of Canada!

Scoffield notes that Canadian officials have attempted to put the best possible face on this development, lauding themselves for their public-spiritedness in deigning to apprise Canadians of the Pope & Talbot action (Chapter 11, the relevant NAFTA statute, enjoins confidentiality rather than transparency in proceedings of this type). Leaving aside the fact that such disclosure should be seen not as an act of generosity but as a duty, Scoffield reveals that only last week Ottawa claimed that all current Chapter 11 suits were public knowledge; yet Pope & Talbot initiated proceedings in December of '98! One wonders how many other Chapter 11 disputes the federal government has forgotten to tell us about.

This latest case underscores yet again the disastrous nature of NAFTA, the single most grievous feature of which is Chapter11. A meeting of NAFTA signatories is planned for April 22-23/99 in Toronto. Chapter 11 is on the agenda, apparently, but the Chretien administration has given no indication that it plans to adduce serious complaints about it. On the other hand, the First Report (December 29, 1998) of the British Columbia Legislature's Special Committee on the MAI : "recommends that the government of Canada reopen NAFTA chapter 11 to eliminate the investor-state dispute settlement procedure."

My own feeling is that, in the absence of a campaign equivalent to that which derailed the MAI, redress of NAFTA's ills will not be forthcoming. However, with each new lawsuit, and with the impending showdown on water exports, the potential for such mass activity grows.

Even then it must be appreciated that organization against NAFTA will encounter problems not faced by anti-MAI efforts. To begin with, MAI was prospective; NAFTA is a done deal. It is usually much easier to obstruct than to abolish and - in view of the integration of the Canadian and US economies (indeed, societies) which NAFTA has brought about - this definitely holds true in the present instance.

Another major difference is the line-up of forces. At the end of the day the MAI was shot down in the Organization for Economic Co-operation and Development by Europeans. This is due to two factors : the more progressive political culture of Western Europe which is rather less disposed than Canada's to favor narrow economic objectives over broader social considerations; the political structures of Western Europe - the proportional representation system common to these states makes ruling parties more vulnerable, hence more responsive to popular pressure.

Both the government and the major opposition party in the Canadian Parliament backed the MAI to the very end; it is no thanks to them that the treaty was not concluded. As also during the national debates preceding the signing of NAFTA and the Canada-US Free Trade Agreement Canadians are apt to find it impossible to persuade their federal representatives to oppose Washington's wishes.

It is true that there is some disaffection in the US with NAFTA and more still in Mexico, and alliances should certainly be sought with activists in these countries. Even so I doubt very much that sufficient strength could be found to implement a political solution. The legislatures in all three of our countries are packed with neoliberals; we cannot meaningfully threaten to "throw the bums out" (the recommended treatment in liberal democracies) because all parties subscribe to the same agenda.

It strikes me that we would do better to look to the courts for relief. In the present decade the judiciary has become the mainspring of progressive - indeed radical - institutional agency. In the main it is legal rulings which have compelled legislatures to take steps to eliminate discrimination against non-heterosexuals; the Supreme Court of Canada ordered Ottawa to implement pay equity between women and men; the Supreme Court of British Columbia, in the Deljamuukw case, at last properly recognized aboriginal title. Even the recent decision to strike down the law against the possession of child pornography - a decision with which I strongly disagree - is remarkable in that it demonstrates the willingness of Canadian judges to challenge received opinion.

The United Steelworkers of America (USWA) have already adopted this tactic. They have brought a constitutional charge against the executive arm of the US government, claiming it exceeded its authority in signing NAFTA without adequate support from the Congress.

It is too early to predict how the matter will turn out but it obviously bears watching, as does the charter challenge brought against the Canadian government, re MAI, by the Defence of Canadian Liberty Committee (DCLC). However, I think there is much to be said for propounding a simultaneous assault on NAFTA in the Canadian courts. On the one hand I am uncomfortable with consigning my fate to the mercies of the American legal system; on the other the DCLC may be undone by the technical point that the object of their gravamen - the MAI - has never existed in legal terms.

None of this is to suggest that NAFTA can be tackled in one way only. With such all-encompassing issues a diversity of approaches is essential. No matter which method(s) we prefer, however, the time is upon us when we must seek to implement them.