NAFTA: Viagra for Corporations

Canada got one break in the Walkerton tragedy - that the deadly contamination of the town's water supply came from cow manure. If it had come instead from, say, a toxic chemical produced by a foreign company, that would have been worse. In that case, the company could have sued Canada for hundreds of millions of dollars.Anyone who thinks this statement far-fetched obviously hasn't been following the latest antics going on under the guise of NAFTA trade disputes.

As we count down the days to the Quebec City summit and the chance to further entrench the NAFTA principles into the new FTAA treaty covering all of the Americas, it's worth reviewing the scope of what's going on in these treaties under the name of ensuring "free trade."

What's basically going on actually has relatively little to do with trade - free or otherwise - and a great deal to do with enhancing corporate power. That's what NAFTA, the FTAA and the WTO are basically all about - redesigning the international economy in a way that transfers significant new powers to corporations. Think of these trade deals as a kind of corporate Viagra.

The most visible enhancement of corporate power comes in NAFTA's Chapter 11, which establishes a wide-ranging new set of rights corporations can use to challenge the authority of democratically elected governments.

It's under this NAFTA section, for instance, that a Vancouver-based company, Methanex, is suing the United States for $1.3-billion. The huge sum involved should be the first clue that things are a bit wingy with these NAFTA lawsuits. What injustice could possibly have been done to Methanex that the damage is well over a billion dollars?

Well, it turns out that Methanex produces a gasoline additive that, when it enters the water supply, is considered a health hazard by the state of California. This isn't just a crazy idea on the part of someone who's been producing too many scary movies. The city of Santa Monica, California, (pop. 93,000) had to shut most of its municipal wells several years ago - and they remain shut - after some of the Methanex additive leached into the local water supply. California responded by imposing a ban on the use of the Methanex product.

Under the circumstances, then, one would think that Methanex officials would count themselves lucky not to be dragged out of town behind a fast-moving truck. And, in the pre-NAFTA days, they would have probably been relieved just to walk away scot-free.

NAFTA has changed all that. Now Methanex can claim to be the victim, not the people whose water had been contaminated by the Methanex chemical. (Take note, Walkerton.) Indeed, with a new set of legal rights at its disposal, Methanex's response was to launch a massive lawsuit under NAFTA's Chapter 11, claiming damages for financial losses it will suffer as a result of California's ban.

All this is happening, don't forget, in the name of ensuring "free trade." It's likely that if these trade deals were properly identified as having little to do with trade and everything to do with enhancing corporate power, the public would have rejected them long ago.

What NAFTA does is single out corporate profit-making as a right so important that it requires new international legal protections and a private tribunal system to enforce them.

No other set of rights - environmental rights, social rights, labour rights, even human rights - has been accorded the same international legal protection. Trade lawyer Steven Shrybman calls it "a revolutionary development in international law."

Consider what happens when someone's human rights are violated. He or she must first exhaust all possible legal remedies within the country where the violation has occurred. Only then can the person apply to a committee of the United Nations. But that UN committee has no real power. Even if it confirms the allegations of the applicant, it can only make a finding that the country has done wrong and suggest remedies or ways to avoid similar violations in the future. That's likely to be cold comfort for the applicant.

Compare this to the rights a corporation enjoys under NAFTA. The corporation doesn't have to waste years dragging its case through domestic courts, but gets to go straight to a private NAFTA tribunal, which operates in secret and has the power to make binding decisions. The NAFTA tribunal can force a government to pay damages to the corporation for whatever amount the tribunal deems appropriate. Now that's power.

The extraordinary legal protections which NAFTA offers corporations has prompted Mr. Shrybman, on behalf of the Council of Canadians and the Canadian Union of Postal Workers, to launch a challenge in the Canadian courts, claiming that NAFTA violates Canadian constitutional safeguards.

It's true that NAFTA's private tribunals only have the power to force governments to pay money in damages, not to actually strike down laws. But the right to force the payment of huge amounts of money is an enormous power to harass, and will almost certainly make governments more likely to back off from legislation which they suspect will lead to major lawsuits.

So, under the guise of a trade deal, we've created stronger international rights for corporations to be free from constraints on their profit-making than for humans to be free from beatings, execution and torture.

And the thirty-four nations meeting in Quebec City are expected to endorse this bizarre sense of priorities, and extend it throughout the hemisphere.

Originally published by the National Post. Linda McQuaig's column appears every second Monday.

For more rabble news coverage of the Quebec Summit and its aftermath, please click here.

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