NAFTA

Last updated 2004-06-28 by Roedy Green ©2002-2004 Canadian Mind Products.
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Introduction

Background

The negotiations were arduous. To push negotiations along, at the last minute, the Americans tried a bluff, a bargaining chip they intended to push then withdraw. This was the famous chapter 11 you will hear so much about. Chapter 11 has nothing to do with bankruptcy; it is a section of the agreement that gave outrageous powers to foreign corporations. To the American negotiator's surprise, the Canadians accepted it.

In 2002, negotiations are underway to extend NAFTA to include 31 new North and South American countries. This new agreement called FTAA (Free Trade Agreement of the Americas) has an even stronger version of chapter 11.

Protests are heating up. The Canadian government announced it would shoot free trade protestors.

The Case Against NAFTA in a Nutshell

• Even Liberal Minister of the environment Caccia admitted, "NAFTA has been an environmental disaster."
• NAFTA prospers the richest 3% of Canadians, but is a disaster for the rest of us. The wealthy bamboozle the public and bribe politicians to keep NAFTA.
• Under NAFTA, Canadian farmers are exporting seven times as much to the Americans, but are making 24% less income. There are similar stories in other sectors.
• NAFTA put Canada up for sale at bargain prices. Even Tim Horton's is now American.
• Under NAFTA, Americans have the right to buy as much of our electricity, oil, gas and water as they please and we are stuck paying American prices for our own resources.

What is the Matter with the Free Trade Agreement?

You may be coughing just now, saying preposterous, no government in their right mind would hand over such a blank cheque to foreign corporations. That was my reaction when I heard about it Bill Moyer's documentary Trading Democracy. Keep in mind who made the agreement -- Mulroney and Bush senior, men known for promoting the interests of the corporations over citizens. Because Chapter 11 gives the corporations the right to sue for billions in lost profit, it gives foreign corporations immense political power as well.

1. The agreement gives foreign corporations the effective power to overturn anti-pollution legislation.
2. The agreement gives foreign corporations the effective ability to overturn court decisions, even those of the supreme court.
3. The agreement gives foreign corporations the effective right to overturn the rules for organic food labelling. If a foreign corporation loses sales because their products don't quality, either the government has to relax the rules to allow them to comply or else compensate them for all current and future lost profits.
4. These lawsuits are not decided in courts, but by secret tribunals, made up of guess who, industry members! Guess who always wins these lawsuits: the corporations or the federal governments? These decisions override even the supreme court. The new version of chapter 11 wants to keep not only the proceedings secret, but also the rulings. The public will never find out about the billions their government is handing out to foreign corporations in Chapter 11 lawsuits.
5. Canadians are alarmed that Chapter 11 will be used to challenge water safety regulations. Canadas stringent regulations are according to Chapter 11 a restraint of trade.
6. Canadians are alarmed Chapter 11 lawsuits will destroy the public health care system. American health providers can sue, since they are losing profits because the government competes with them in providing health care.
7. Canadians are alarmed the AOL Time Warner will use chapter 11 to dismantle the subsidies to help the fledgling Canadian publishing industry. Americans should be alarmed that Mexican agribusinesses could similarly use it to dismantle the extensive American farm subsidies.
8. Literally, foreign corporations should not even have to pay any taxes at all since that interferes with their profitability. Whether they take chapter 11 that far, foreign corporations still have a huge unfair advantage over domestic ones.

1. Trade is not always free. Bush Jr. slapped a 33% duty (illegal under the NAFTA treaty) on Canadian softwood exports to the USA, which crippled her lumber industry, the number one industry in the provinces of British Columbia (where I live) and Quebec. Most Canadians suspect, but cannot prove, that Bush Jr. was arm twisting Canada to get Prime Minister Chrétien to support Bush's illegal war on Iraq. When that did not work, Bush raised the duty to 47%. Prime Minister Chrétien diplomatically told him to shove it up his nostrils.

   "The price of being the world's only superpower is that its motives are sometimes questioned by others. Great strength is not always perceived by others as benign. Not everyone around the world is prepared to take the word of the United States on faith."
   ~ Jean Chrétien, Prime Minister of Canada

   The USA is a big country and makes up the rules as she goes in her favour.
2. It weakens the power of the workers. Multinational corporations take jobs wherever labour is cheapest. Jobs moved from Canada to the US to Mexico and from there to China. National unions have no power to compete with slave wages in the third world.

The Actuality

• Under Chapter 11, Raymond Loewen, a Canadian funeral company, sued the US Federal Government through the tribunal for $725000000.00 USD , because it lost a jury trial in a legal dispute with a small Louisiana funeral chain owned by Jerry O'Keefe, the mayor of Biloxi, claiming the jury was biased against Canadians. In the original trial, the jury awarded $500000000.00 USD to Okeefe. Loewen originally settled for $175000000.00 USD then struck back some years later with Chapter 11. Here we have a jury trial was overturned by a secret tribunal, not by a superior court. That should ring alarm bells for civil libertarians.
• Under Chapter 11, Methenex, a Canadian gasoline additive company, sued the US Federal government for $970000000.00 USD million because the state of California banned MTBE a gasoline additive that causes cancer in animals.
• Under Chapter 11, the Ethyl Corporation, an American gasoline additive company, successfully sued the Canadian federal government when it banned MMT in gasoline, even though the additive is illegal in the USA. Canada could not afford the $250000000.00 USD lawsuit and so caved in allowed the additive in Canadian gasoline and paid up $13000000.00 USD for the short time the ban was in effect. To add insult to injury, the settlement required two cabinet ministers to go on TV and lie to the Canadian people that MMT was considered completely safe.
• Under Chapter 11, Metalclad, an American company successfully sued the federal government of Mexico for $16002433.00 USD when local Mexican governments refused them a permit to expand a toxic waste dump until they had cleaned it up. They took the money then went ahead with the toxic dump without any cleanup.
• One of the Canadian negotiators of the free trade agreement said that even if a company were putting plutonium in children's food, the company could still sue for lost profit if they were required to stop. Foreign corporations are insured from economic risk, unlike domestic corporations, no matter how irresponsibly they behave. Not only are governments required to compensate them for lost profits, but also for all lost profits indefinitely into the future. Ironically, the worse the foreign corporations behave the more they can extort from governments under Chapter 11.

Why?

1. Politicians get the bulk of their campaign contributions from corporations, and so they do what the corporations want. The large corporations are quite understandably wildly in favour of Chapter 11.
2. The negotiators of the treaty were lawyers who are now in private boutique practice teaching corporations how to milk the Chapter 11 cow. They put the language in there on purpose so they could exploit it later. The politicians may not have realised how foolish they were being when they signed.
3. Note that the major news media TV and newspapers have a conspiracy of silence of Chapter 11. Not a one has reported it. Not a one has explained what the free trade controversy is about. All they show are pictures of protestors and fire hoses as if the protests were a form of mindless violence.

Learning More

	One Big Party: To Keep Canada Independent
	0-9733116-0-6
	Paul Hellyer
Paul Hellyer was Canada's former defense minister. He methodically builds a case that Mulroney sold out Canada to the USA with NAFTA. He explains why, if NAFTA is extended with the FTAA, it will be the end of Canada.

	The Selling of "Free Trade": NAFTA, Washington, and the Subversion of American Democracy
	0-520-23178-3
	John R. MacArthur, Jr.
MacArthur is editor of Harper's Magazine. People have accepted NAFTA because few people bothered to read the agreement and discover it had nothing at all to do with free trade. It is about giving Americans the same rights as Canadians when it comes to buying up Canadian resources and companies.

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