******************************************************* SPECIAL ON THE FREE TRADE AREA
AGREEMENT OF THE AMERICAS
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FREE TRADE AGREEMENT OF THE AMERICA'S (FTAA) SUMMIT IN QUEBEC CITY
Canada
is hosting the international meeting of the Free Trade Agreement of the Americas
(FTAA) April 20 - 22, 2001, in Quebec City. More than 9,000 de legates from 34
countries in North, South and Central America, members of t he Organization of
American States (OAS) will meet as part of the continuin g process of trying to
unite the economies of the Western Hemisphere, excep t for Cuba, in a single
free trade agreement. A draft of the discussion doc ument regarding the Free
Trade Agreement of the Americas is currently being considered by the
participating nations. Although based on the North Ameri can Free Trade
Agreement (NAFTA), the FTAA would, according to reports from its nine
Negotiating Groups, far surpass NAFTA in its scope and power. It would encompass
a population of 800 million and a combined GDP of $11 trill ion (U.S.). It would
incorporate the powers of the proposed services agreem ent at the World Trade
Organization (WTO) - the General Agreement on Trade in Services (GATS) - as well
as those of the failed Multilateral Agreement on Investment (MAI). Negotiations
to form a Free Trade Area of the Americas (FTAA) began in December 1994 in Miami
at the Summit of the Americas with the goal of concluding negotiations by 2005.
The Quebec Summit of the Amer ica's website is at
http://www.quebecsummitoftheamericas.ca/sommet.nsf . Th e website for the
Canadian information on the FTAA is at http://www.america scanada.org/menu-e.asp
. The Free Trade Area of the Americas website is at http://www.ftaa-alca.org/alca_e.asp
.
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WHY ARE ENVIRONMENTALISTS CONCERNED
ABOUT FTAA It appears that free
trade agreements, while breaking down frivolous and si gnificant barriers to
trade between nations, have gone too far. They also h ave been used to
neutralize efforts by countries to protect their environme nt and to properly
manage their renewable and non-renewable natural resourc es. So feel that free
trade should be just that - - all out free trade, no holds barred. Everything
is fair game. However, we've learned that unfette red free trade, even within
nations, can harm social systems, take advantag e of labour, and ruin the
environment, if there are no laws. That is what i s needed with free trade and
with the proposed new Free Trade Area of the A mericas (FTAA) - - rules for the
game. But the rules, if any appear to be m inimal and unenforceable. That is
why thousands of environmentalists are go ing to Quebec City to protest. That
is why those that are not going to Quebec City plan to hold demonstrations in
their own cities. They have already seen what can go wrong with agreements
such as the North American Free Trad e Agreement (NAFTA) and the World Trade
Organization (WTO). Listed below ar e the problems: o natural resources
such as water, forests and oil reserves area e xpedited in their extraction and
consumption by outside countries, providin g no protection or conservation
for the people and their economies w ithin the host countries.Specific measures
taken to protect endangered species such as req uiring special nets to catch
shrimp without killing sea turtles are viewed as non-tariff trade barriers and
are disallowed by free trade dispute tribunals. o Chapter 11 challenges
under NAFTA has been used to distort trade protection as a perverse way of
being compensated for monies lost due to environmental laws and environmental
measures o The proposed FTAA would give transnational corporations
unequalle d new "rights" to challenge and compete for every publicly funded
service now provided by governments - from health care and education to
social security, culture and environmental protection. If adopted, it could
remove the ability of every government to create or maintain laws and r
egulations protecting the health, safety and well-being of their citizens a nd
the environment they share. The Center for International
Environmental Law (CIEL) stated that, "while growth in trade, foreign
investment, and economic relationships among countr ies can bring significant
benefits, the process of economic globalization i s also leading to serious
problems. Trade rules are clashing with environm ental standards, undermining
national environmental protections. The incom e gap between rich and poor
continues to grow. Forests, fisheries and othe r treasures of the world's
natural heritage are over exploited as they are subjected to global market
demands." The Center for International Environme ntal Law has been working in
partnership with organizations throughout the hemisphere to produce draft text
before the Ministerial Summit in Quebec in April 2001. CIEL states that, "the
FTAA provides an excellent opportunity to rectify the mistakes that have been
built into the WTO, NAFTA, and nume rous bilateral trade and investment
agreements, although it is unclear whet her governments are ready to seize this
opportunity." Visit the Centre for International Environmental Law (CIEL)
website on trade at http://www.ciel.org/tae.html . Visit the Stop FTAA website
at http://www.stopftaa.org/ . Also visit the Sierra Club of Canada website and
see the report "Five Reason s Why to Oppose the FTAA for Elizabeth May by
Christine Elwell, lawyer, at
WHAT IS THE WORLD TRADE ORGANIZATION ( WTO)? The World Trade Organization is the mother of all
free trade agreements. Ma ny of its components will provide the basis for FTAA
negotiations. The WTO came into being in 1995. The WTO is the successor to the
General Agreement on Tariffs and Trade (GATT) established in the wake of the
Second World War . The past 50 years since the establishment of the GATT have
seen an excep tional growth in world trade. Merchandise exports grew on average
by 6% ann ually. Total trade in 1997 was 14 times the level of 1950. GATT and
the WTO were developed through a series of trade negotiations, or rounds, held
und er GATT. The first rounds dealt mainly with tariff reductions but later neg
otiations included other areas such as anti-dumping and non-tariff measures .
The latest round, the 1986 to 1994 Uruguay Round, led to the WTO's creati on.
The negotiations did not end there. Some continued after the end of the Uruguay
Round. In February 1997 agreement was reached on telecommunication s services,
with 69 governments agreeing to wide ranging liberalization mea sures that went
beyond those agreed in the Uruguay Round. In the same year 40 governments
successfully concluded negotiations for tariff-free trade in information
technology products, and 70 members concluded a financial serv ices deal
covering more than 95% of trade in banking, insurance, securities and financial
information. At the May 1998 ministerial meeting in Geneva, WTO members agreed
to study trade issues arising from global electronic com merce. In 2000, WTO
plans to hold talks on agriculture and services. For mo re information about the
WTO go to its official website at http://www.wto.o rg/wto/inbrief/inbr01.htm .
Also visit the Second Peoples' FTAA Summit Webs ite at http://www.sommetdespeuples.org/en/index.html
.
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NAFTA CHAPTER 11 CHALLENGES An unintended byproduct of the
North American Free Trade Agreement (NAFTA) are the trade challenges related to
environment protection under Chapter 11 of the Agreement. For example, Article
1103 states that, "each Party shall accord to investors of another Party
treatment no less favorable than that it accords, in like circumstances, to
investors of any other Party or of a non-Party with respect to the
establishment, acquisition, expansion, manag ement, conduct, operation, and sale
or other disposition of investments." A nd Article 1115 under Chapter 11 states
that, "Without prejudice to the rig hts and obligations of the Parties under
Chapter Twenty (Institutional Arra ngements and Dispute Settlement Procedures),
this Section establishes a mec hanism for the settlement of investment disputes
that assures both equal treatment among investors of the Parties in accordance
with the principle of international reciprocity and
due
process before an impartial tribunal."
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WHAT THE NATION SAYS ABOUT CHAPTER 11 The Nation journal reported
that, "when NAFTA was adopted in 1993, Chapter 11 in the trade and
investment agreement was too obscure to stir controversy. Eight years later, it's the
smoking gun in the intensifying argument ove r whether globalization trumps
national sovereignty. Chapter 11 established a new system of private
arbitration for foreign investors to bring injury claims against governments.
As the business claims and money awards accumul ate, the warnings from astute
critics are confirmed--NAFTA has enabled mult inational corporations to usurp
the sovereign powers of government, not to mention the rights of citizens and
communities." The operative principle of Chapter 11 is that foreign capital
investing in Canada, Mexico and the Uni ted States may demand compensation if
the profit-making potential of their ventures has been injured by government
decisions-- "tantamount to expropri ation." Thus, foreign-based companies are
given more rights than domestic b usinesses operating in their home country.
For example: o California banned a methanol-based gasoline additive,
MTBE, after the E PA reported potential cancer risks and at least 10,000
groundwater sites we re found polluted by the substance. Methanex of Vancouver,
British Columbia , the world's largest methanol producer, filed a $970 million
claim against the United States. If the NAFTA panel rules for the company, many
similar complaints are expected, since at least ten other states followed
Californi a's lead. The federal government would have to pay the awards.
California S tate Senator Sheila Kuehl and others have asked the US Trade
Representative to explain how this squares with a state's sovereign right to
protect heal th and the environment. o In Mexico, a US waste-disposal
company, Metalclad, was awarded $16.7 m illion in damages after the state of
San Luis Potos blocked its waste site in the village of Guadalcazar. Local
residents complained that the Mexican government was not enforcing
environmental standards and that the project t hreatened their water supply.
Metalclad's victory established that NAFTA's dispute mechanism reaches to
sub-national governments, including municipali ties. o In Canada, the
government banned another gasoline additive, MMT, as a suspected health hazard
and one that damages catalytic converters, accordin g to auto makers. The Ethyl
Corporation of Virginia, producer of MMT, filed a $250 million claim but
settled for $13 million after Canada agreed to wi thdraw its ban and
apologize. o Sunbelt Water Inc. of California has filed the largest and
most audaci ous claim--seeking $10.5 billion from Canada for revoking its
license to ex port water by supertanker from British Columbia to water-scarce
areas of th e United States. The Nation reports that, "the NAFTA logic thus
establishes the "regulatory takings" doctrine the right has promoted
unsuccessfully for two decades--a retrograde version of property rights designed
to cripple or even dismantle the administrative state's regulatory powers. NAFTA
Chapter 11 is really a n end run around the Constitution." Source, "Sovereign
Corporations and FTA A", by William Greider, April 30, 2001. Visit their website
at
ETHYL CORP.'S CHAPTER 11 CHALLENGE FOR COMPENSATION Ethyl Corporation, a
U.S. based company operating in Canada sued Canada for $250 million under the
investor-state provision of Chapter 11 of the NAFTA Agreement, as a result of
Canada's ban on imports of methylcyclopentadien yl manganese tricarbonyl (MMT).
The Canadian Parliament, citing evidence th at the gasoline additive posed
health risks and clogged vehicles' catalytic converters, had passed
legislation, effective June, 1997, banning imports of MMT. Ethyl claimed the
ban was an expropriation. The corporation dropped its suit, however, after the
Canadian government, fearing it would lose th e NAFTA suit, reversed the ban,
wrote a statement declaring there was no ev idence MMT posed a health or
environmental risk, and paid Ethyl $13 million in damages and legal fees.
Source, "Canada Backs Away From US Firm's NAFTA Challenge," Journal of
Commerce, July 22, 1998, full article at http://www
.harmonizationalert.org/Sept98/naftapcb.htm Trade in
MMT was restricted under the Manganese-based Fuel Additives Act, w hich went
into effect in June, 1997. MMT is a manganese-based gasoline addi tive
manufactured by the Ethyl Corporation of Richmond, Virginia, with a pr oduction
plant in Sarnia, Ontario. Airborne manganese has been found to cau se disabling
neurological impairments in movement and speech, but the publi c health impacts
of the long-term, lower dose exposures resulting from MMT use are unknown. MMT
has been in use in Canada for 19 years and Ethyl claim s there have been no
health risks associated with its use. But no studies o n whether MMT causes any
health effects have been conducted in Canada. See website
http://www.edf.org/pubs/NewsReleases/1996/Apr/d_canad.html See the Environment
Canada website on MMT at http://www.ec.gc.ca/press/mmt98_n_e.htm
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S.D. MYERS NAFTA CHALLENGE ON CANADA'S BAN OF PCB EXPORTS On July 22,
1998, S.D. Myers, an Ohio-based company specializing in the cle an-up of
hazardous wastes, filed a "notice of intent" to seek compensation from the
Canadian government under the "Regulatory Taking" compensation pro visions of
the North American Free Trade Agreement (NAFTA). The company cla ims that
Environment Canada's 15-month ban in 1995 on the export of polychl orinated
biphenyls (PCBs) waste cost S.D. Myers $15 million in business it could have had
in exporting PCB wastes from Ontario and Quebec to its plan t in Ohio for
landfilling and processing. It stated that the ban on environ mental reasons was
tantamount an expropriation of its business. The company filed its claim under
the Chapter 11 investor-state arbitration provisions of the NAFTA, which allow a
foreign corporation to directly sue a governme nt that takes an action
"tantamount to" a direct or indirect expropriation. S.D. Myers is asking for
$6.3 million from the Canadian government. For m ore information contact
Elizabeth May, Executive Director, Sierra Club of C anada, 1 Nicholas Street,
Suite 412, Ottawa, Ontario, K1N 7B7, ph. (613) 24 1-4611, website http://www.sierraclub.ca/ **********************************************************************
CANADA'S METHANEX CORP. USES NAFTA CHAPTER 11 TO CHALLENGE CALIFORNIA'S DEC
ISION TO ELIMINATE MTBE FROM GASOLINE Vancouver-based Methanex Corp.'s proposed a US
$970-million lawsuit against the United States under the investor protection
section of Chapter 11 of N AFTA. California recently imposed a ban on the gas
additive MTBE, effective in 2002, because MTBE is leaking into the water table
and poses health ris ks to humans. The U.S. Environmental Protection Agency has
declared MTBE to be a known animal carcinogen and a probable human carcinogen.
The demand f or methyl tertiary butyl ether (MTBE) in California represents some
6.0 per cent of world methanol demand. Total world wide production of MTBE
represen ts 30 percent of methanol demand. Methanex Corp. of Alberta, is the
world's largest producer of MTBE, a toxic gasoline additive. "The effort to make
U S taxpayers foot the bill for Methanex's bad luck and bad business strategy is
perverse," stated Citizen's Trade Campaign Executive Director Scott Nov a.. He
asked, "How many Americans knew when NAFTA was enacted that we were inviting
corporations to engage in this sort of abuse?" Adding that, "it i s duplicitous
for Methanex to blame California for falling stock values whe n the company's
profits dropped $270 million between 1997 and 1998 -- befor e the law was passed
and years before the law will go into effect", stated the Citizen's Trade
Campaign based in Washington, D.C. It further stated th at, "This is just
another case of transnational corporations trying to bull y democracies into
weakening their environmental safeguards," added Wallach . "This is an
unconscionable corporate-Canadian shakedown of California's c lean water
standards. Contact Katie Burnham ph. (202) 546.4611. See the ful l press release
by the Citizen Trade Campaign issued June 16, 1999, at website http://lists.essential.org/tw-list/msg00063.html .
A
NATION'S DRINKING WATER BECOMES A COMMODITY UNDER FREE TRADE One of the basic rights for a nation's
people has been access to clean drinking water. Protecting the quantity and
quality of fresh water for its peop le has been a national responsibility. So
what happens now, when new free t rade agreements makes drinking water an
exportable commodity during times of drought and shortages when climate change
and global warming descend upon us? Do we lose access to our clean drinking
water because another richer n ation has mismanaged their own drinking water
supplies? It appears so under the new free trade agreements. By defining water
as just another "good", t he WTO, the NAFTA and likely the FTAA seek to
transform water to just anoth er commodity for the global marketplace. Trade
principles of "proportionali ty"mean that, as in the energy sector, Canadians
could never in effect end trade in water regardless of the environmental effects
in Canada or the nee ds of Canadians. Most alarmingly, investor rights in trade
agreements, such as in Chapter 11 of NAFTA and in the failed MAI, allow
investors from outs ide Canada to secretly sue the Canadian government should it
even consider passing a law that interferes with its ability to make profits out
of water development and trade, now or in the future. The Proposed
Federal-Provinci al Accord in Canada to protect water does not directly address
trade deals, and thus fails to be the basis of a comprehensive and effective
approach t o protecting Canada's water. It would do nothing to actually prohibit
water exports. Visit the Friends of the Earth International Free Trade website
at www.foe.org/international/trade.htm
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CANADA APPEARS TO BE BACKING WTO EFFORTS
TO BLUNT NATIONAL ENVIRONMENTAL LAWS
Canada has been one of the leading advocates in asking other nations to
ret hink their environmental laws under WTO and expressing concern about the
ne gative trade impacts of multi lateral environmental agreements like the Kyo
to Climate Change Protocol. Canada's Department of Foreign Affairs and Int
ernational Trade (DFAIT) has seen a number of important environmental laws
implemented by other countries as non tariff trade barriers aimed at restri
cting the sales of Canada's natural resources. Issues that concern DFAIT in
clude, o England's and France's decision restrict the use of asbestos in
con struction, DFAIT is challenging this decision since Canada is a major
expor ter of asbestos o Europe's decision to restrict consumption of seal
pelts and restri ct the purchases of furs from animals trapped in inhumane
ways. Canada want s to continue and expand the sales of seal skins and wild
animal furs trapped in the north o some European countries' decisions to
restrict purchases of lumber and paper products that are clear cut or come from
old growth forests. DFA IT is challenging these environmental decisions
under WTO trying to f orce the countries to buy Canada's wood and paper clear
cut from Canada's last stands of old growth forests. The purchasing
With Canada's provinces reducing their own environmental
protection budgets by more than 40% and making decisions to get environment out
of the way of economic progress, Canada may become a nation that must meet
environmental requirements imposed by other nations' environmentally friend
purchasing d ecisions or by Multilateral Environmental Agreements (MEA's). One
can under stand Canada going to the WTO meeting in Seattle with an agenda to
blunt th e power of MEA's and independent decisions by other countries to
"green" their environmental purchasing habits. See the DFAIT website on WTO
at http://www.dfait-maeci.gc.ca/tna-nac/menu-e.asp ********************************************************************
VENEZUELA WINS TRADE CHALLENGE TO SELL DIRTY GASOLINE IN THE U.S
. Venezuela launched a challenge under GATT
against a decision by the U.S. En vironmental Protection Agency (EPA), under the
U.S. Clean Air Act, to reduc e emissions from reformulated gasoline. Venezuela
successfully challenged t he amendment to the US Clean Air Act that required
foreign gasoline refine rs to make the same improvements to gas quality as the
average US refinery. The challenge was brought by the Venezuelan government, but
the real press ure to challenge the regulation came from the subsidiaries of the
same mult inational oil and gas companies that had failed to keep the U.S. EPA
from p assing tougher environmental laws in Washington, D.C. Now foreign
importers like Venezuela and Canada can choose to export to the U.S. gasoline
that i s dirtier than refineries in the U.S. are required to make, resulting in
im ported gasoline damaging air quality and human health in major US cities. S
ee the Canadian Centre for Policy Alternatives website at http://www.policyalternatives.ca/ .
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U.S. MAY CHALLENGE JAPAN'S DECISION TO CLEAN UP AIR EMISSIONS FROM CARS
While
California has been a world leader in legislating cleaner auto emissi ons, Japan
is considering revolutionary legislation that would substantiall y reduce the
amount of pollutants that cars can emit in Japan. The legislat ion would
virtually require most people to drive small cars with small engi nes with great
mileage. None of the mid to large size cars manufactured in the U.S. and Canada
could meet the proposed new stringent requirements. Th e U.S. government has
told Japan this could violate WTO rules because the r equirements would fall
mainly on medium sized cars, which is the class of m ost US car exports to
Japan. While the new Japanese legislation may be inte rpreted as a non tariff
trade barrier, it is also a potential new leader fo r other countries to follow
its lead in actually cleaning up urban air poll ution. Visit the Council of
Canadians website at http://www.canadians.org/ **************************************************************************
GATT/WTO DECISION STOPPED DOLPHIN PROTECTION The United States under its Marine
Mammal Protection Act attempted to stop the practice of tuna fishermen following
pods of dolphin that were chasing tuna and scooping up both tuna and dolphins in
their nets. The dead and dyi ng dolphins were thrown overboard and the tuna
harvest and sent to market. The U.S. stopped its own tuna fleets from harvesting
tuna in this manner. B ut the Mexico tuna fleets challenged at the GATT/WTO the
decision by the U. S. not to import tuna that was caught using the
environmentally harmful met hod. Surprisingly, Mexico won the challenge and the
U.S. was forced to allo w imported tuna into the United States that were caught
by the old method. Environmental groups cooperated with grocers in the U.S. and
started labell ing cans of tuna as "dolphin safe" for those tuna that were
caught without catching dolphin. But that labelling may also be subjected to a
WTO challen ge as an impediment to free trade. It is possible the U.S. laws like
these will no longer be implementable, and eco labelling may not be applicable
at all under the WTO. That is why the environmental groups are calling for "safe
trade" measures that include rules for environmental protection. See the
Greenpeace WTO site at http://www.greenpeace.org/
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WTO SHRIMP DECISION AGAINST PROTECTING SEA TURTLES The U.S. made a
decision to help the world protect the remaining endangered sea turtles species
by deciding not to purchase shrimp from regions that a re destroying turtle
habitat and incidently capturing endangered species of turtles in their shrimp
nets, and from those nations that do not use the n ew more-expensive nets that
allow entangled turtles to escape. The Shrimp-T urtle dispute arose over a US
law designed to protect endangered sea turtle s. Each year, thousands of sea
turtles are killed in shrimp trawl nets. To protect these endangered species,
the US passed a law to require nations ca tching wild shrimp and exporting them
to the United States to be certified as having adopted specific conservation
measures. These measures require sh rimp trawls to be equipped with
"turtle-excluder devices" (TEDs), attachmen ts that enable turtles to exit
unharmed from nets. The US measure was chall enged at the World Trade
Organization (WTO) by India, Malaysia, Pakistan an d Thailand. These countries
argued that the law was an illegal restriction on their shrimp exports and thus
contravened WTO obligations. In response, the United States argued that their
measure was covered by Article XX of th e GATT, exempting WTO members from their
trade obligations in order to prot ect human, animal and plant life (Art.XX(b))
or conserve natural resources (Art.XX (g)) when deemed necessary. The WTO
dispute settlement panel struck down the US measure on the grounds that it was
not covered by the environm ental exceptions in Article XX, and that the measure
thus presented an arbi trary and unjustifiable restriction to international
trade. In early 1998, the United States appealed the panel's decision.
The WTO Appellate Body uph eld the panels' decision to overturn the
US measure. The WTO decision will require the U.S. to
voluntarily continue to purchase shrimp from process and production methods
(PPM's) that are resulting the d ecimation of endangered turtle species. The
Sierra Club, National Audubon S ociety and others wrote that, the U.S.
Administration must also reject as a solution to the dispute (proposed by the
WTO) the use of "shipment- by- sh ipment certifications" of shrimp caught with
turtle excluder devices. Due t o the nature of the industry, the certification
of individual shrimp shipme nts cannot be verified, and will not adequately
protect sea turtles. Such a solution will also not immunize U.S. law from future
WTO challenges. See the full letter sent by the Sierra Club U.S., Center for
International Envi ronmental Law, et. al. on April 21, 1998, at
http://www.sierraclub.org/tra de/environment/turtles2.asp . Also, see the
website http://www.ciel.org/shmptur.html .
CANADA USES WTO TO FIGHT FRANCE'S BAN ON THE USE OF ASBESTOS-LADEN PRODUCTS
Asbestos has been identified
by scientists and doctors as being toxic to hu man health. The use of Asbestos
has been banned in almost all products in U nited States, Canada and Europe. In
spite of that, Canada has made two requ ests to the Dispute Resolution Body of
the World Trade Organization to stop France from prohibiting the sales and
imports of "white asbestos and produ cts containing asbestos, including a ban on
imports for such goods." The Fr ench ban was enacted in 1996 in response to
concerns about links between as bestos and cancer. Canada alleges that these
measures violate Article 2, 3 and 5 of the SPS Agreement, Article 2 of the TBT
Agreement and Articles II , XI, and XIII of GATT 1994. Source, "BRIDGES"
Magazine, Vol. 2, No. 8, Nov ./Dec. 1998, International Centre for Trade and
Sustainable Development (IC TSD), 13 chemin des Anemones, 1219 Geneva,
Switzerland, email ictsd@ictsd.c h Website at http://www.ictsd.org **************************************************************************
WTO UPHOLDS FRENCH BAN ON ASBESTOS CHALLENGE FROM CANADA In an unusual
move that speaks well of WTO and free trade, the very conserv ative World Trade
Organization (WTO) ruled in favour of France and against Canada, stating that
France did not violate international trade rules when it banned asbestos for
environmental health reasons. Anxious to protect a C $200 million (US$129
million) a year business, Canada had appealed an earli er WTO decision on the
basis that the international trade organization acte d outside of its mandate
by upholding a French ban on chrysotile asbestos. Workers in the ship building
and construction industries who installed fria ble asbestos insulation
materials were severely affected by dust levels 100 to 200 times higher than
those permitted by current standards. Canada's ap peal tested the authority of
WTO rules, which allow countries to restrict t rade where necessary to protect
human health or the environment. Despite th e carcinogenic character of
asbestos, Canada had claimed that France was no t entitled to prohibit the
import and marketing of certain asbestos product s - in particular, chrysotile
cement - because health risks could be substa ntially reduced if adequate
precautions were taken. In November 1998, a WTO panel was asked to decide
whether France's ban was in accordance with the provisions of multilateral
trade agreements and fell within the scope of th e Agreement on Technical
Barriers to Trade. Last
September 2000, four WTO arbitrators found that while the French decre e was
discriminatory and contrary to its obligations under international tr ade
principles, it was not a technical regulation and so could not fall fou l of
rules on technical barriers to trade. Ninety percent of the world prod uction of
chrysotile is used in the manufacture of chrysotile cement, in th e form of
pipes, sheets and shingles. The panel decided that the ban was le gitimate
because WTO rules allow countries to restrict trade where necessar y to protect
human health or the environment. A month later, Canada appeale d this decision
on the grounds that the panel had ruled outside of its mand ate. The latest
ruling issued in a report by the WTO's Appellate Body in Ge neva upholds the
panel's decision that the dangers posed by the professiona l or accidental
manipulation of asbestos justify strict measures, including a ban. In a landmark
finding, the Appellate Body said that health consider ations must be taken into
account when interpreting anti-discrimination rul es, and products entailing
health risks cannot be compared with safer subst itutes. Governments can
therefore treat dangerous substances differently, s aid the Appellate Body.
Canada is the world's leading exporter and second l argest producer of
chrysotile after Russia. Canada produced some 320,000 to nnes in 1998,
accounting for 18.2 percent of global output and 2,500 jobs i n Quebec where
asbestos is mined. Source, "WTO Upholds French Ban on Asbest os", Environment
News Service (ENS), Geneva, Switzerland, March 13, 2001. See the full story at
ENS http://ens.lycos.com/ens/mar2001/2001L-03-13-10.html
GENETICALLY MODIFIED FOODS BAN CHALLENGED UNDER WTO Canada and the
United States plan to use the WTO to challenge Europe's deci sion not to eat
food that contains genetically modified organisms (GMO's). Europe is concerned
that GMO food production and consumption can harm the e nvironment and health.
Canada and the United States want to challenge Europ e's plan to not produce or
import GMO food such as soybean and potatoes. A draft Seattle WTO Ministerial
Declaration contains a proposal by the US and Canada that the WTO establish a
working party on Biotechnology to look at the "adequacy and effectiveness" of
existing rules on GMOs. Greenpeace Int ernational is quite concerned stating
that, "it is ironic, given that the U S and Canada have this year vigorously
opposed negotiations on effective international rules to govern the use of
GMOs in food and agriculture. A Bi osafety Protocol, under the Convention on
Biodiversity, was to set rules o n the international movements of GMOs which
would give countries a right to say no to GMOs on environmental grounds
(threats to biodiversity)." But th e talks collapsed after the US and Canada
led opposition to the inclusion of GM commodity crops in the agreement. A WTO
Biotechnology Working Group, if agreed, is likely to undermine the adoption of
the Biosa fety Protocol scheduled in January 1999." Source, Greenpeace
International, website http://www.greenpeace.org/ . Also see Friends of the
Earth website at http://www.foe.org/international/wto/freetrade.html It
is interesting to note, that despite Canada's Dept of Foreign Affairs at tempts
to block the European ban of GMO's, one of Canada's largest food com panies,
McCain Foods Ltd., has decided to not produce GMO potatoes, and ins tead it will
process clean potatoes and potato products that can be exported to Europe. See
McCain's website at http://www.mccain.com/ ***********************************************************************
ECO LABELING THREATENED BY FREE TRADE AND FTAA Eco-labels provide consumers with information that
a product was made with minimal impacts on the environment. Some governments
have argued that eco-l abel programs may violate WTO (and future FTAA) rules on
product standards. Canada has an excellent program called the "Environmental
choice Program ( ECP) which provides the "three doves entwined" eco label to
products that meet environmental guidelines. The program was started by
Environment Canad a and has been privatized and is run by Terrachoice. There are
other eco la bel programs including Blue Angel in Germany, Dutch Ecolabel in The
Netherl ands, and Green Seal in the United States. The Green Seal program is the
i ndependent, nonprofit organization dedicated to protecting the environment by
promoting the manufacture and sale of environmentally responsible consu mer
products. It sets environmental standards and awards a "Green Seal of A pproval"
to products that cause less harm to the environment than other sim ilar
products. By setting standards for environmentally responsible product s, Green
Seal seeks to reduce air and water pollution; cut the waste of ene rgy and
natural resources; slow ozone depletion and the risk of global warm ing; prevent
toxic contamination; and protect fish and wildlife and their h abitats. All of
these eco labelling programs could be wiped out or neutrali zed by WTO
challenges from countries that either don't have eco labelling programs or do
have programs that are weaker, and who want to sell their le ss environmentally
sound products into the protected markets. Visit the Environmental Choice
Program at the website http://www.environmentalchoice.com/
. Also, visit Green Seal website at http://www.greenseal.org/ .
***********************************************************************
GREEN PROCUREMENT GUIDELINES BY GOVERNMENTS CAN BE NEUTRALIZED BY WTO
Local, state, provincial and national governments that decide to
establish "Green Procurement" guidelines for their departments to purchase
environmen tally friendly products, and purchase from companies that meet certain
envi ronmental management guidelines (such as be certified ISO 14000 compliant),
can have their green procurement guidelines struck down by challenges by c
ountries that don't want to meet the environmental requirements. Let's say that
the United States decides that only companies that have been ISO 14000
certified, or have Environmental Management Systems (EMS) in place, can bi d on
large government projects. Canada could challenge that as being a non- tariff
trade barrier to its companies that want to bid on the projects, whe n the
companies themselves do not have ISO14000 or EMS. What if the Governm ent of
Mexico decides that no wood from "old growth forests" in the tempera te
climate (Canada) or the tropical climate (Brazil) can be used on government building
construction projects? Would it be forced to back down?
*********************************************************************
FREE TRADE AND THE U.S. MARINE MAMMAL PROTECTION ACT (MMPA) One of the
primary reasons for the low demand for Canadian seals on the int ernational
market is the decision by some nations in Europe, and the United States in
particular, not to accept seal fur and other seal products into their markets.
Under the United States' Marine Mammal Protection Act (MMPA) , for example, the
U.S. has banned the importation of seal products from an y sealing nation
because of the conservation and humane concerns of its cit izen's related to
seal harvesting. This has had a significant impact on Can adian seal markets. It
has virtually reduced the demand for seal products i n the U.S. to zero. In
response, Canada's House of Commons' Standing Commit tee on Fisheries and Oceans
issued a report in June 1999, with a number of recommendation, one of which was
to call for Canada to challenge the United States' ban on seal products imports
under the MMPA. The Committee reporte d that, "the MMPA may contravene the
General Agreement on Tariffs and Trade (GATT)" under the World Trade
Organization (WTO). Specifically, the Commit tee recommended that Canada:
through the Department of Fisheries and Oceans and the Department of Foreign
Affairs and International Trade, must immediately commit itself to the goal of
removing the trade barriers within the MMPA must seriously consider
seeking a review under GATT of the prohib ition on the importation of Canadian
seal products into the United States undertake an immediate
examination of the U.S. MMPA to ensure tha t it complies with the provisions of
both the WTO and NAFTA with respect to Canadian seal products. The Canadian Sealers
Association (CSA) called on Canada's Environment Minis ter, Hon. David Anderson
to also intervene in the United States on behalf o f Canada to reduce the non
tariff trade barrier established by the U.S. Mar ine Mammal Protection Act
(MMPA). If Canada were able to reverse the MMPA u nder the free trade
guidelines, the CSA reports that the market for seal pr oducts would grow
considerably. The Department of Fisheries and Oceans has formally asked what
action the U.S. government is contemplating to bring th e MMPA into conformity
with international obligations so that harp seal fur s and animal products can
be sold into the U.S. The federal government has options under the World Trade
Organization (WTO) and the North American Fre e Trade Agreement (NAFTA) to press
for the U.S. to stop what Canada would t erm "non-tariff trade barriers" put up
to stop the trade in seal parts and products. Visit the Sealers Association of
Canada website at See the Hous e of Commons Committee Response recommendation
number #6, on seals agreeing that trade action should be taken on exporting
seals products to the Unite d States at http://www.ncr.dfo.ca/COMMUNIC/Reports/seal/gr-seals_e.htm ***********************************************************************
NAFTA'S COMMISSION ON ENVIRONMENTAL COOPERATION Two of the better
aspects to come out of the NAFTA trade agreement were the side agreements on
labour and environment. The North American Agreement on Environmental
Cooperation (NAAEC). The Commission for Environmental Cooper ation (CEC) is an
international organization created by Canada, Mexico and the United States under
the North American Agreement on Environmental Coope ration (NAAEC). The CEC was
established to address regional environmental c oncerns, help prevent potential
trade and environmental conflicts, and to p romote the effective enforcement of
environmental law. The Agreement comple ments the environmental provisions of
the North American Free Trade Agreeme nt (NAFTA). Two aspects of the CEC make it
effective. First, it promotes co mmon cooperation on an upwards harmonization of
environmental protection. T his include (1) strengthening environmental
enforcement and improving envir onmental reporting such as the Pollutant Release
and Transfer Reports - PRT R's, (e.g., the U.S. Toxic Release Inventory TRI, and
Canada's National Pol lutant Release Inventory NPRI); and, (2) Chapters 14 &
15 citizen challenge s when countries are not enforcing their own national
environmental laws. T hese have made NAFTA a strong protector of the environment
in this area. Th e CEC is a model for implementing similar systems within other
trade agreem ents such as FTAA. However, it is understood that there is strong
resistanc e by some governments and their corporate allies to having similar
mechanis ms such as the CEC built into the FTAA. Without a similar side
agreement in the FTAA, expect strong disappointment from those who fear the FTAA
will f urther harm the environment Visit the Commission for Environmental
Cooperat ion (CEC) website at
http://www.cec.org/home/index.cfm?varlanenglish
Copyright (c) 2001 Canadian Institute for Business and the Environment Toronto
and Montreal All rights reserved.
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THE
GALLON ENVIRONMENT LETTER Victoria Ave., Montreal, Quebec H3Y 2R5 Ph. (514)
369- 0230, Fax (514) 369- 3282
ggallon@pcstarnet.com Vol. 5, No. 17, April 16, 2001
