The huge chemical and agricultural company Dow Agrosciences is getting ready to sue the Canadian government for compensation because Quebec banned its weed killer 2,4-D a couple of years ago. The charge is that the provincial ban breaches legal protections guaranteed under Chapter 11 of the North American Free Trade Agreement or NAFTA. In other words, provincial laws are trumped by NAFTA. In effect, the case argues that Quebec can’t ban the chemical, nor can Ontario, which has already announced it wants to outlaw it too.
Not only will this suit open a can of worms in Quebec which is always worried about its sovereignty, it points out the perils of NAFTA which a number of voices have criticized but of whom few have been heard.
As Luke Eric Peterson writes in Embassy Magazine: the Chapter 11 suit is a “legal back channel which permits foreign investors to detour around local courts and sue the federal government before an international tribunal.” This can lead to binding arbitration.
“For cross-border investors,” Peterson continues, “these types of legal protections can come in handy if a tin-pot dictator sends in the tanks and seizes your factories or oil fields. But when such legal provisions are invoked by foreign investors in an effort to ward off health or environmental regulations, eyebrows drift skyward.”
Peterson adds that the Dow case is not the first or least. “Already, the government is defending against …(a) claim filed by another U.S.-based chemical producer. When Canada's Pest Regulatory Management Agency moved to ban the use of Lindane-based seed treatments, U.S.-based Chemtura Corporation sued for $100 million in damages. That arbitration is currently going on behind closed doors, following a January confidentiality order.”
If Barack Obama is serious about wanting to reopen NAFTA after he's elected we ought to be front and center, saying Yes! That's a very good idea!