The Canadian government is now vigorously engaged in negotiations to create a Free Trade Area of the Americas (FTAA) agreement which would extend free trade and investment throughout the Western hemisphere. Like the North American Free Trade Agreement (NAFTA), the FTAA will subordinate the regulatory powers of elected governments to 'market forces', allowing corporations a means to override national decisions. The environment will be high among the casualties, as has been the case with NAFTA, however this time around the damage can be expected to be more widespread and more severe.

Inherently, free trade is an environmentally unfriendly proposition. It involves shipping goods over huge distances, resulting in the burning of large quantities of fossil fuels; it involves the packaging and repackaging of goods for different segments of their voyage, causing considerable negative environmental impact through the waste of paper and other materials; and it encourages the irresponsible consumption of valuable resources from somewhere else on the planet by consumers who have little or no appreciation of the environmental damage that is being done.

Moreover, the experience of NAFTA has revealed that liberalized investment clauses (i.e. Chapter 11 in NAFTA) can directly undermine environmental regulations, such as those controlling toxics and hazardous waste, and can hinder efforts towards the conservation and sustainable management of resources. There are plenty of examples:

• In 1996, the Canadian government approved a bill banning the use of MMT, a gasoline additive suspected of being a brain-damaging neurotoxin. In response, the Ethyl Corporation, a US manufacturer of the additive, used NAFTA rules to launch a $347 million dollar lawsuit against the government, claiming expropriation and loss of profits. The case was concluded in 1998 when the Canadian government decided to settle out of court, paying Ethyl Corp. nearly $20 million, retracting the ban on MMT, and providing a written letter of apology. A similar case is presently being reviewed by NAFTA in which Methanex Corporation of British Columbia is suing the US government for $1.4 billion in damages as compensation for a California law banning the use of MTBE, another gasoline additive suspected of being a carcinogen.
• In August, 2000, Metalclad Corp., an American waste-disposal company, was awarded $16.7 million (U.S.) from the Mexican government because it was refused permission for a waste disposal facility. The state governor of San Luis Potosi ordered the site closed down after a geological study showed that the local water supply would be contaminated. Michelle Swenarchuk, a lawyer with the Canadian Environmental Law Association, has pointed out that the legal precedent is clear: "NAFTA is saying, you can have your local rules for dumping, but if a foreign company wants to dump . . . it can force you to pay."
• Sun Belt Water Inc. of California has filed a claim against the Canadian government for refusing to issue a permit to export bulk water from British Columbia. If the Canadian government yields in this case, it will create a dangerous precedent for the commodification of water.
• The U.S.-based lumber company, Pope and Talbot, is suing the Canadian government for about $800 million, claiming its lumber exports suffered because of the Canada-US Softwood Lumber Agreement which established export quotas for four Canadian provinces.

The list goes on, but the general pattern is evident. In addition, there are instances in which governments refrain from even attempting to implement environmental legislation because of anticipated challenges. Many people have expressed concern, for example, that the acquisition of Canadian lumber giant MacMillan Bloedel by US-owned Weyerhaeuser will force the government of British Columbia to scale back plans for a protected forest areas system in order to avoid costly legal challenges under NAFTA's anti-expropriation rules.

Having established the fact that NAFTA represents a threat to the environment, the next question is: can we expect the FTAA to be any different? The answer, judging from the present state of negotiations, is a categorical "NO". To appreciate why, however, we should review why NAFTA's environmental protection measures are so inadequate.

Even before NAFTA came into effect, many people realized it would have negative environmental implications. Consequently, a side agreement, the North American Agreement on Environmental Cooperation (NAAEC), was negotiated to compensate for the anticipated environmental conflicts. The Commission for Environmental Cooperation (CEC) was mandated by the NAAEC to resolve these issues, but its deliberation processes are unfavourable to claimants, and in any case it was not given sufficient powers to enforce its decisions. The vast majority of claims that it has addressed have either been dismissed or have languished in a bureaucratic purgatory; the few cases that make it through the maze simply result in public reports condemning environmental irresponsibility - a finger wagging that governments can ignore with impunity.

Critics have maintained that to be effective, environmental protection measures must be included as a fundamental principle in the main body of trade agreements. There are no signs on the horizon of this happening with NAFTA, but promises that this idea would be applied in the case of the FTAA were floated about initially. However when the first working group themes were announced, "environment" was nowhere to be seen. FTAA negotiators later maintained that environmental issues were being considered case by case in all workgroups, but this dubious, piecemeal approach came as an obvious disappointment to environmentalists looking for solid protection measures. More recently, negotiators continue to distance themselves ever further from any meaningful environmental commitment. This June, our International Trade Minister, Pierre Pettigrew, proclaimed: "We should not link these things together at all costs." Meanwhile, it appears that NAFTA's Chapter 11, which focuses on liberalized investment rules and which has provided the legal basis for the most environmentally destructive rulings, is being used as a working model for expanded investment rules in the FTAA. All of this suggests that the FTAA will not be any better than NAFTA when it comes to the environment, and perhaps much worse.

Negotiators pay lip service to the environment in prepared statements, but closer scrutiny reveals that, in practice, business interests are given priority. Early harvest agreements in forests, energy, and fisheries have been proposed - more "bad news for the environment" in the words of Elizabeth May, Executive Director of Sierra Club of Canada. Negotiators seem to be bent on hustling these deals through before proper environmental impact studies can be made. In the agricultural sector, the Canadian government is using the FTAA to pursue market openings for genetically modified foods while simultaneously continuing to stall on signing the Cartegena Biosafety Protocol which would regulate the movement of these potential environmental time bombs. Consumer labelling is being considered as a non-tariff barrier. In general, the FTAA negotiators seem to be little concerned with the precautionary principle as applied to environmental dangers; the dominant modus operandi is 'business first, worry about the consequences later.'

To give the whole process an air of legitimacy, the Canadian government has initiated a consultative process in which groups and individuals from civil society are invited to present their concerns. A showcase forum took place in Toronto last November, where a large number of NGOs, including a number of environmental groups, presented criticisms and recommendations before 22 FTAA Trade Ministers and Vice-Ministers. In the words of Murray Dobbin, of the National Post, "the vast majority were thoughtful, informed presentations that pointed out the potentially devastating impacts of trade agreements," and he added that "critics outnumbered supporters." In contrast, the report presented by the Department of Foreign Affairs and International Trade (DFAIT) portrays the public comments as unanimously enthusiastic. The official summary states: "Consultations to date reveal that Canadians realize that we live in an increasingly interconnected world, and that they favour liberalized trade." Of course, none of this is that surprising given that even before the consultations took place, Pierre Pettigrew had already told the Americas Business Forum that "There is no alternative … unless we want to go backwards, and that is not an option." Or put in other words, the public never really had any choice in the matter.

The general thrust of free trade and investment agreements is to create huge, cross-border markets which, in turn, provide favourable conditions for mega-scale business operations. But 'mega' proportions are inherently inimical to the environment. A healthy environment requires diversity, which means a little bit of many different things. A forest planted with all the same species of tree is ecologically barren; a hog-farm with a half-million pigs (the scale of many large US hog producers these days) utterly overwhelms the capacity of the surrounding environment to absorb the waste. Trade is a necessary and positive thing when properly regulated, but give market forces free reign and the momentum to exploit soon outstrips nature's power to regenerate. With negotiators bent on creating a freewheeling FTAA that ignores demands to ensure adequate environmental protection measures, the only sensible option is no FTAA at all.

Return to NoNonsense Globalization Subsite

Contact me at: englishprof@angelfire.com