September 19, 2001
Corporations are using a dispute resolution provision of the North American Free Trade Agreement (NAFTA) to circumvent environmental regulations in the US, Canada, and Mexico -- according to a report released the week of Sept. 17, 2001, by Public Citizen.
A similar provision has been proposed in an expansion of NAFTA, known as the Free Trade Area of the Americas (FTAA). If approved, FTAA could apply to 31 Latin American and Caribbean countries.
Under NAFTA, the process in question is called "investor-to-state" dispute resolution. It allows foreign investors to challenge the laws, policies, and judicial decisions of a federal, state, provincial, or local government in a legal process that is largely closed to public scrutiny. Of the 15 cases discovered by Public Citizen, foreign investors have won four, one was dismissed, and 10 are pending. Cases involve:
- A Canadian corporation challenging CA's phase-out of the gasoline additive MTBE
- A US corporation challenging Canadian regulation of the gasoline additive MMT
- A US corporation challenging a Mexican city's permitting process for a toxic waste facility
Public Citizen media: Shannon Little, 202-588-7742. Contact Little for a copy of the new report, "NAFTA Chapter 11 Investor-to-State Cases: Bankrupting Democracy." The report is also now available online here.
Officials at the Office of the US Trade Representative say they have not yet reviewed the Public Citizen report. However, they did note that Executive Order 13141, which addresses environmental review of trade agreements, was adopted in April 2001 and is being applied to pertinent trade agreements under discussion. USTR: Richard Mills, 202-395-3230.
Similarly, officials at The Business Roundtable have not yet reviewed the Public Citizen report. Much of the Roundtable's work addresses intl. trade issues. John Schachter: 202-872-1260.
ALSO: On Sept. 17, 2001, The World Bank Group and Intl. Monetary Fund announced that they have indefinitely postponed their annual meetings originally scheduled for Sept. 29-30, 2001, in Washington DC. When those meetings are eventually held, issues regarding NAFTA and FTAA may be raised. WBG: Caroline Anstey, 202-473-1800; IMF: 202-623-7100.