Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Which Canadian Politicians Said What About NAFTA Before Senators Clinton and Obama

There is a lot of NAFTA-bashing by the left-leaning politicians on both sides of the Canada-United States border.  As a law professor teaching a course on NAFTA and bilateral trading arrangements at case Western Reserve University School of Law in Cleveland, Ohio, I both support NAFTA and recognize that trade agreements have improved since NAFTA.

What is important is that NAFTA was a bargain reached by three countries after careful and lengthy negotiation by some of the best legal minds of the time.  What is important is that NAFTA Chapter 11 and the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC) permit evolution and the three NAFTA Parties can meet and agree to improvements.

As a Canadian, what is the most important is that our NAFTA trading partners treat Canada with respect and not threaten us.  What is ironic is that both Senators Clinton and Obama should have done their homework.  If they had been following the House of Commons debates regarding Bill C-9 "An Act to Implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention)", they could have politely and nicely taken a few left-leaning Canadian MPs up on their comments made in January 2008 in the House of Commons to re-negotiate NAFTA Chapter 11, and the NAALC and NAAEC.

This is what said in Canada's House of Commons on January 28-29, 2008 - almost one full month before Senators Clinton and Obama really started speaking negatively about NAFTA in their speaches in Cleveland Ohio on February 26, 2008:

Mr. André Bellavance, Bloc Québec (Richmond – Arthabaska) (January 28, 2008):

  • ... chapter 11 [of NAFTA] discourages any governmental measure, when it comes to the environment in particular, that would decrease the profits of a foreign owned company. The dispute settlement mechanism currently allows companies to turn directly to international tribunals to seek compensation without the need for the state's consent. ... This is a serious problem. A multinational could, on its own authority, be behind a trade dispute between two countries. ... It is that type of absurd situation that chapter 11 of NAFTA on investment allows. The government must quickly enter into discussions with its U.S and Mexican counterparts to amend chapter 11 of NAFTA.  The Bloc Québécois has been calling for that for a very long time now. We have seen the abuses that have resulted from this."

Mr. Charlie Angus, New Democratic Party (Timmins - James Bay) (January 28, 2008):

  • "The first is the principle that if we look at the failed processes that are in place now for trade, particularly the chapter 11 mechanisms for NAFTA, it has been proven time and time again that they allow certain corporate interests to override regional, state and national governments and the legitimate interests of governments to protect citizens in a fair manner. That has been used again and again as a blunt instrument to push a privatizing agenda against national interests."
  • "The issue of trade is paramount to us as a nation. We are a nation of traders and we want fair rules. In our farming sector we have come up against incredible odds because some of our major competitors, the EU and the U.S. , continually dump products on the international markets and continually distort the price of grains and other commodities through their subsidies. It has hurt us but it has had devastating effects in the third world where y the EU or the U.S. can dump grain, corn or any other product into the third world where farmers do not have nearly the same protections. When we all talk about a level playing field, it seems that they are never on the level playing field. Who is on the level playing field? Well, it is the corporations and their friends, but national economies, especially in the third world, are not on any kind of level playing field. If a trade agreement comes before this House, we need to look at it through the prism of asking whether it will be fair, just, true and open trade or whether it continues to perpetuate a very one-sided cycle. Unfortunately, I believe that this one-sided cycle will continue."
  • "It was mentioned earlier in the House the example of Metalclad in Mexico where a U.S. company felt that its rights were unfairly impinged by the fact that in its desire to use a poor neighbourhood in Mexico as a toxic waste dumping ground somehow its rights were violated by the fact that the people of that region said that certain base standards needed to be set. They said that as a municipal government, a regional government and a national government they needed to protect their country from being a dumping ground for waste."
  •  "I spoke about the specific issues of how chapter 11 is used again and again to basically undermine laws."

Mr. Serge Cardin, Bloc Québec (Sherbrooke) (Janaury 29, 2008:

  • The definition of expropriation is so vague that any government measure, except for a general tax measure, can be challenged by foreign investors if it diminishes the profits generated by their investments. ..."
  • "American companies have majority interests in Alberta oil companies. Chapter 11 opens the door to the worst kind of abuse of process."
  • Given the amounts of money at issue, chapter 11 acts as a deterrent to any government action, particularly with respect to the environment, whose effect would be to reduce the profits of a foreign-owned corporation."
  • "Given these flaws, chapter 11 of NAFTA reduces a state’s ability to take action for the common good and to enact environmental legislation, and amounts to a sword of Damocles that can come down at any moment on any legislation or regulations that might have the effect of cutting into corporate profits."
  • "In 2005, the United States changed some of the provisions of their standard investment protection agreement. In 2006, Canada did the same. Because the two countries have now recognized the harmful and extreme nature of chapter 11 of NAFTA, the time is right for the government to act quickly to initiate talks with its American and Mexican partners to amend chapter 11 of NAFTA. We have to say no to bad investment protection agreements."
  • "...regarding environmental regulations, indeed, all countries, all responsible governments, whether Liberal or Conservative, should enforce them. Governments must establish environmental regulations that produce results.  In the current context where environmental legislation and regulations will have serious consequences for businesses that do not or did not comply with them, chapter 11 will do just that; it will ensure that certain businesses comply with the regulations, forcing them to implement various procedures or measures to protect our environment. However, this comes at a price. Chapter 11, which we are discussing here today, would allow foreign companies—including American companies, of course—to sue any government that enforces these regulations. This is why chapter 11 of NAFTA really must be modified....our treaties ultimately need to be good treaties that not only protect our investments and our investors but also the environment and our working conditions."
  • "The reverse must also be true. For instance, some countries—and even Canada—invest money in other countries without respecting the rights of individuals or the environment. Yet if those countries suddenly were to implement policies to protect the working conditions of these people or the environment, would our own Canadian and Quebec businesses operating internationally demand compensation? To sum up, agreements between countries must aim for fairness and justice, for us as well as for other people."

 Ms. Libby Davies, New Democratic Party - Vancouver East) (Janaury 29, 2008)

  •  "If we cannot begin at that place and recognize that we must protect people's rights in terms of their labour, then I would say these trade rules are not worth the paper they are written on. They are simply a regime for greater and greater profit margins for multinational corporations. That is why they want them. They want to go into those developing countries. They want to see minimal rules because they want to find greater markets. They want to find more cheap labour. We should recognize the impact that has in our own country.Yesterday in question period there were questions on the manufacturing sector and the loss of jobs in the forestry sector, the auto sector, the resource sector. Everybody was talking about it. It is related to these trade agreements. There is an impact here at home. The member needs to understand that for us it is not about trade. It is about the regime and the rules that we create."
  • "We in the NDP believe that as parliamentarians we have a responsibility to not only uphold these international conventions that protect labour, human rights and the environment in our own country, but we also have a responsibility to speak out in the international community to make sure that those rights are upheld. We expect the Government of Canada to do the same. We expect the Government of Canada to show leadership on those questions."
  • the member says there are two main barriers to the progress of prosperity for developing countries and he names capacity and corruption. I would add a third: exploitation under this regime of multinational corporations marching in, using natural resources, using cheap labour with no standards whatsoever, and exploiting the environment and local workers.
  • "...we have to work for agreements that protect those social standards, but the reality is that over the last two or three decades of this incredible advancement of a globalized agenda through organizations such as the World Bank and the WTO, the primary focus has been on trade and lifting those barriers based on the needs and capacity of the multinational corporations, not based on whatever the domestic conditions are in the receiving country.  The whole premise that he advances is something that actually has not happened under this process of globalization. I think it is something that needs to be changed. Why would we not begin first with labour standards? Why would we not begin first with environmental standards and social standards? Why would we not begin from a place of social equity and social justice and advance trade on that basis?"

I do not agree with some of the statements made by the Canadian MPs that have been repeated above.  However, I disagree more with the approach that Senators Clinton and Obama have taken in blaming Canada for all that is wrong in the United States and threatening to tear up NAFTA if Canadians do not bow to them (if they win the presidential contest in the fall) and submissively do whatever Canada is told to do.  Canada is a sovereign nation, a friendly nation and fighting alongside American soldiers in Afghanistan.  Canadian blood has been shed to protect North Americans on both sides of the border.  For this fact alone, Canadians deserve the respect of the presidential candidates now and  later this year after the presidential contest has concluded.  The publicly available information suggests that improvements to NAFTA may be politically acceptable to Canada's minority government.

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