The NFU’s 48th annual convention included a NAFTA panel with speakers, Dr. A Haroon Akram-Lodhi, Gus Van Harten and Chris Holman. Audience members listened intently to the panelists’ views on international trade and what that means for Canada’s import/export future. Sawyer Helmer photo
by Kalynn Sawyer Helmer
AgriNews Staff Writer
OTTAWA – The 48th National Farmers Union annual convention was held in Ottawa toward the end of last year from Nov. 23 to 25. The convention boasted an impressive lineup of panelists and speakers for the members. Of the many topics discussed over the three-day event, NAFTA was on the tip of everyone’s tongue.
The NFU gathered together three academic experts to speak and present on international trade deals and the NAFTA deal. First up was Dr. A Haroon Akram-Lodhi, Professor of global human inequality, the future of smallholder peasant communities in the world food system, the sustainability of rural social structures, relations, institutions and communities, and gender and economic policy, at Trent University. He was followed by Gus Van Harten, Professor at Osgoode Hall Law School of York University, specializing in Canadian administrative law and international investment law. Last up was Chris Holman, a Wisconsin-based farmer with a M.A. in Geography and who serves on the United States National Farmers Union.
All three speakers gave members an overview of how international trade works, why it is beneficial and what problems it may include. However, once the presentations were completed, the general consensus of the room was, as one member put it, “depressing.” This consensus occurred after Van Harten revealed that international trade deals have a “special system to protect foreign investors from the legislatures, governments and courts of countries.” That system is called the Investor-State Dispute Settlement (ISDS). The ISDS which can be found in NAFTA Chapter 11, gives foreign investors the “ability to challenge a country’s legislative, government, and court decisions directly at the international level,” said Van Harten in his presentation. The idea behind the ISDS is to protect foreign investors from facing corruption in a country’s court system. However what the ISDS has done is allowed those investors to sue countries without any responsibilities. “It is because of NAFTA that Canada is one of the five most sued countries in the world [under this model],” said Van Harten, citing a study done by the Canadian Centre for Policy Alternative (CCPA).
One of the clearest examples of this framework is from a case in 1997 when a U.S. chemical company, Ethyl Corporation, challenged the Canadian Government’s ban on importing MMT; an octane-enhancing additive to gasoline. The additive is suspected to, “reduce the life of spark plugs and the performance of the emission control system could be affected,” according to a number of manufacturers including this warning from the Chevrolet owners manual. This warning is followed by the suggestion to avoid gasoline with MMT whenever possible. Gasoline with MMT was banned from import or interprovincial trade in Canada from 1997 to 1998. When Ethyl Corporation used the ISDS to challenge the ban, they won damages worth $15-million and Canada was required to remove the ban. Thus, the chemical can be found in products to date.
NAFTA’s Chapter 11 ISDS is not one of a kind. Van Harten explained that most of Canada’s international trade deals contain a similar framework.
While NAFTA does have its merit and international trade is necessary for Canadians, what all panelists agreed on is that re-examining NAFTA, particularly Chapter 11, has great potential to be beneficial to Canadians. “NAFTA should not be regarded as some immobile object,” said Van Harten.
According to Doug Forsyth, Agriculture and Agri-Food Canada (AAFC) Director, Trade Negotiations, Chapter 11 is being discussed at the table. “That’s one of the issues that has certainly been part of the NAFTA renegotiations. It has been identified by the United States as being very important for them to review it. At the same time, I think it is important for Canada and it is important that we get it right.”
It is hard to know whether an ISDS has any merit whatsoever for Canada’s future trade negotiations. On one hand, “If people think there is something the Canadian Government has done against them, the provisions are there within NAFTA. It doesn’t happen a lot. There are some high-profile cases, but I think people tend to focus on those high-profile cases and say ‘it’s always wrong, it’s always bad’, but it may not be, there is some grey area,” said Forsyth. On the other, “abuses of ISDS in NAFTA chapter 11 are reaching crisis proportions. Rationally, Canada should be seeking to disengage from this system… With investor-state arbitration included in CETA, the TPP and dozens of Foreign Investment Protection Agreements (FIPAs) such as the Canada-China deal, the share of foreign investments in Canada eligible to bring investor-state claims will increase from 55 per cent under NAFTA to nearly 90 per cent. This is throwing oil on the fire,” writes Scott Sinclair, senior research fellow with the CCPA and the director of the organization’s Trade and Investment Research Project, in his article, Canada is being pummelled by NAFTA corporate lawsuits. Why do we put up with it? (The Monitor, July 1, 2015).
What is clear about the inclusion of ISDS is that public awareness needs to increase. Without knowledge of these legislative models, Canadians cannot do much to sway the outcomes of renegotiations to their favour.