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[GreenYes] Environmental Concerns About Free Trade & FTAA
              THE GALLON ENVIRONMENT LETTER
                             
506 Victoria Ave., Montreal, Quebec H3Y 2R5
                                                                  Ph. (514) 369- 0230, Fax (514) 369- 3282
                                                                         Email
ggallon@pcstarnet.com
                                                                           Vol. 5, No. 17, April 16, 2001
 
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                          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 delegates from 34 countries in North, South and Central America, members of the Organization of American States (OAS) will meet as part of the continuing process of trying to unite the economies of the Western Hemisphere, except for Cuba, in a single free trade agreement. A draft of the discussion document regarding the Free Trade Agreement of the Americas is currently being considered by the participating nations. Although based on the North American 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 trillion (U.S.). It would incorporate the powers of the proposed services agreement 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 America's website is at http://www.quebecsummitoftheamericas.ca/sommet.nsf . The website for the Canadian information on the FTAA is at http://www.americascanada.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 significant barriers to trade between nations, have gone too far. They also have been used to neutralize efforts by countries to protect their environment and to properly manage their renewable and non-renewable natural resources. 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 unfettered free trade, even within nations, can harm social systems, take advantage of labour, and ruin the environment, if there are no laws. That is what is needed with free trade and with the proposed new Free Trade Area of the Americas (FTAA) - - rules for the game. But the rules, if any appear to be minimal and unenforceable. That is why thousands of environmentalists are going 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 Trade Agreement (NAFTA) and the World Trade Organization (WTO). Listed below are the problems:
 
      o    natural resources such as water, forests and oil reserves area expedited in their extraction and consumption by outside countries, providing no
            protection or conservation for the people and their economies within the host countries
 
     o    Specific measures taken to protect endangered species such as requiring 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 unequalled 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 regulations protecting the health, safety and well-being of their citizens and the
           environment they share.
 
The Center for International Environmental Law (CIEL) stated that, "while growth in trade, foreign investment, and economic relationships among countries can bring significant benefits, the process of economic globalization is also leading to serious problems.  Trade rules are clashing with environmental standards, undermining national environmental protections.  The income gap between rich and poor continues to grow.  Forests, fisheries and other treasures of the world's natural heritage are over exploited as they are subjected to global market demands." The Center for International Environmental 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 numerous bilateral trade and investment agreements, although it is unclear whether 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 Reasons Why to Oppose the FTAA for Elizabeth May by Christine Elwell, lawyer, at http://www.sierraclub.ca/national/trade-env/ftaa-5-reasons-against.pdf
 

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WHAT IS THE WORLD TRADE ORGANIZATION ( WTO)?
 
The World Trade Organization is the mother of all free trade agreements. Many 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 exceptional growth in world trade. Merchandise exports grew on average by 6% annually. 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 under GATT. The first rounds dealt mainly with tariff reductions but later negotiations 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 creation. The negotiations did not end there. Some continued after the end of the Uruguay Round. In February 1997 agreement was reached on telecommunications services, with 69 governments agreeing to wide ranging liberalization measures 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 services 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 commerce. In 2000, WTO plans to hold talks on agriculture and services. For more information about the WTO go to its official website at http://www.wto.org/wto/inbrief/inbr01.htm . Also visit the Second Peoples' FTAA Summit Website 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, management, conduct, operation, and sale or other disposition of investments." And Article 1115 under Chapter 11 states that, "Without prejudice to the rights and obligations of the Parties under Chapter Twenty (Institutional Arrangements and Dispute Settlement Procedures), this Section establishes a mechanism 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 over 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 accumulate, the warnings from astute critics are confirmed--NAFTA has enabled multinational 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 United States may demand compensation if the profit-making potential of their ventures has been injured by government decisions-- "tantamount to expropriation." Thus, foreign-based companies are given more rights than domestic businesses operating in their home country. For example:
 
o   California banned a methanol-based gasoline additive, MTBE, after the EPA reported potential cancer risks and at least 10,000 groundwater sites were 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 California's lead. The federal government would have to pay the awards. California State Senator Sheila Kuehl and others have asked the US Trade Representative to explain how this squares with a state's sovereign right to protect health and the environment.
 
o    In Mexico, a US waste-disposal company, Metalclad, was awarded $16.7 million 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 threatened their water supply. Metalclad's victory established that NAFTA's dispute mechanism reaches to sub-national governments, including municipalities.
 
o    In Canada, the government banned another gasoline additive, MMT, as a suspected health hazard and one that damages catalytic converters, according 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 withdraw its ban and apologize.
 
o    Sunbelt Water Inc. of California has filed the largest and most audacious claim--seeking $10.5 billion from Canada for revoking its license to export water by supertanker from British Columbia to water-scarce areas of the 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 an end run around the Constitution." Source, "Sovereign Corporations and FTAA", by William Greider, April 30, 2001. Visit their website at http://www.thenation.com/ .
 
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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 methylcyclopentadienyl manganese tricarbonyl (MMT). The Canadian Parliament, citing evidence that 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 the NAFTA suit, reversed the ban, wrote a statement declaring there was no evidence 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, which went into effect in June, 1997. MMT is a manganese-based gasoline additive manufactured by the Ethyl Corporation of Richmond, Virginia, with a production plant in Sarnia, Ontario. Airborne manganese has been found to cause disabling neurological impairments in movement and speech, but the public 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 claims there have been no health risks associated with its use. But no studies on 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 clean-up of hazardous wastes, filed a "notice of intent" to seek compensation from the Canadian government under the "Regulatory Taking" compensation provisions of the North American Free Trade Agreement (NAFTA). The company claims that Environment Canada's 15-month ban in 1995 on the export of polychlorinated 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 plant in Ohio for landfilling and processing. It stated that the ban on environmental 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 government 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 more information contact Elizabeth May, Executive Director, Sierra Club of Canada, 1 Nicholas Street, Suite 412, Ottawa, Ontario, K1N 7B7, ph. (613) 241-4611, website  http://www.sierraclub.ca/
 
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CANADA'S METHANEX CORP. USES NAFTA CHAPTER 11 TO CHALLENGE CALIFORNIA'S DECISION 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 NAFTA. California recently imposed a ban on the gas additive MTBE, effective in 2002, because MTBE is leaking into the water table and poses health risks to humans. The U.S. Environmental Protection Agency has declared MTBE to be a known animal carcinogen and a probable human carcinogen. The demand for methyl tertiary butyl ether (MTBE) in California represents some 6.0 percent of world methanol demand. Total world wide production of MTBE represents 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 US taxpayers foot the bill for Methanex's bad luck and bad business strategy is perverse," stated Citizen's Trade Campaign Executive Director Scott Nova..  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 is duplicitous for Methanex to blame California for falling stock values when the company's profits dropped $270 million between 1997 and 1998 -- before 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 that, "This is just another case of transnational corporations trying to bully democracies into weakening their environmental safeguards," added Wallach. "This is an unconscionable corporate-Canadian shakedown of California's clean water standards. Contact Katie Burnham ph. (202) 546.4611. See the full press release by the Citizen Trade Campaign issued June 16, 1999, at website  http://lists.essential.org/tw-list/msg00063.html .
 
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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 people has been a national responsibility. So what happens now, when new free trade 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 nation has mismanaged their own drinking water supplies? It appears so under the new free trade agreements. By defining water as just another "good", the WTO, the NAFTA and likely the FTAA seek to transform water to just another commodity for the global marketplace. Trade principles of "proportionality"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 needs of Canadians. Most alarmingly, investor rights in trade agreements, such as in Chapter 11 of NAFTA and in the failed MAI, allow investors from outside 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-Provincial 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 to protecting Canada's water. It would do nothing to actually prohibit water exports. Visit the Friends of the Earth International Free Trade website at  http://www.foe.org/international/trade/ .
 
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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 rethink their environmental laws under WTO and expressing concern about the negative trade impacts of multi lateral environmental agreements like the Kyoto Climate Change Protocol. Canada's Department of  Foreign Affairs and International Trade (DFAIT) has seen a number of important environmental laws implemented by other countries as non tariff trade barriers aimed at restricting the sales of Canada's natural resources. Issues that concern DFAIT include,
 
     o  England's and France's decision restrict the use of asbestos in construction, DFAIT is challenging this decision since Canada is a major exporter of asbestos
 
    o    Europe's decision to restrict consumption of seal pelts and restrict the purchases of furs from animals trapped in inhumane ways. Canada wants
          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. DFAIT
         is challenging these environmental decisions under WTO trying to force 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 decisions or by Multilateral Environmental Agreements (MEA's). One can understand Canada going to the WTO meeting in Seattle with an agenda to blunt the 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
 
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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. Environmental Protection Agency (EPA), under the U.S. Clean Air Act, to reduce emissions from reformulated gasoline. Venezuela successfully challenged the amendment to the US Clean Air Act that required foreign  gasoline refiners to make the same improvements to gas quality as the average US refinery. The challenge was brought by the Venezuelan government, but the real pressure to challenge the regulation came from the subsidiaries of the same multinational oil and gas companies that had failed to keep the U.S. EPA from passing tougher environmental laws in Washington, D.C. Now foreign importers like Venezuela and Canada can choose to export to the U.S. gasoline that is dirtier than refineries in the U.S. are required to make, resulting in imported gasoline damaging air quality and human health in major US cities. See 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 emissions, Japan is considering revolutionary legislation that would substantially reduce the amount of pollutants that cars can emit in Japan. The legislation would virtually require most people to drive small cars with small engines 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.  The U.S. government has told Japan this could violate WTO rules because the requirements would fall mainly on medium sized cars, which is the class of most US car exports to Japan. While the new Japanese legislation may be interpreted as a non tariff trade barrier, it is also a potential new leader for other countries to follow its lead in actually cleaning up urban air pollution. Visit the Council of Canadians website at  http://www.canadians.org/
 
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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 dying 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. But 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 method. Surprisingly, Mexico won the challenge and the U.S. was forced to allow imported tuna into the United States that were caught by the old method. Environmental groups cooperated with grocers in the U.S. and started labelling 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 challenge 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 are destroying turtle habitat and incidently capturing endangered species of turtles in their shrimp nets, and from those nations that do not use the new more-expensive nets that allow entangled turtles to escape. The Shrimp-Turtle dispute arose over a US law designed to protect endangered sea turtles. 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 catching wild shrimp and exporting them to the United States to be certified as having adopted specific conservation measures. These measures require shrimp trawls to be equipped with "turtle-excluder devices" (TEDs), attachments that enable turtles to exit unharmed from nets. The US measure was challenged at the World Trade Organization (WTO) by India, Malaysia, Pakistan and 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 the GATT, exempting WTO members from their trade obligations in order to protect 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 environmental exceptions in Article XX, and that the measure thus presented an arbitrary and unjustifiable restriction to international trade. In early 1998, the United States appealed the panel's decision. The WTO Appellate Body upheld 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 decimation of endangered turtle species. The Sierra Club, National Audubon Society 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- shipment certifications" of shrimp caught with turtle excluder devices. Due to the nature of the industry, the certification of individual shrimp shipments 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 Environmental Law, et. al. on April 21, 1998, at  http://www.sierraclub.org/trade/environment/turtles2.asp .
Also, see the website http://www.ciel.org/shmptur.html .
 
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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 human health. The use of Asbestos has been banned in almost all products in United States, Canada and Europe. In spite of that, Canada has made two requests to the Dispute Resolution Body of the World Trade Organization to stop France from prohibiting the sales and imports of "white asbestos and products containing asbestos, including a ban on imports for such goods." The French ban was enacted in 1996 in response to concerns about links between asbestos 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 (ICTSD), 13 chemin des Anemones, 1219 Geneva, Switzerland, email ictsd@ictsd.ch  Website at http://www.ictsd.org
 
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WTO UPHOLDS FRENCH BAN ON ASBESTOS CHALLENGE FROM CANADA
 
In an unusual move that speaks well of WTO and free trade, the very conservative 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 earlier WTO decision on the basis that the international trade organization acted outside of its mandate by upholding a French ban on chrysotile asbestos. Workers in the ship building and construction industries who installed friable asbestos insulation materials were severely affected by dust levels 100 to 200 times higher than those permitted by current standards. Canada's appeal tested the authority of WTO rules, which allow countries to restrict trade where necessary to protect human health or the environment. Despite the carcinogenic character of asbestos, Canada had claimed that France was not entitled to prohibit the import and marketing of certain asbestos products - in particular, chrysotile cement - because health risks could be substantially 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 the Agreement on Technical Barriers to Trade.
 
Last September 2000, four WTO arbitrators found that while the French decree was discriminatory and contrary to its obligations under international trade principles, it was not a technical regulation and so could not fall foul of rules on technical barriers to trade. Ninety percent of the world production of chrysotile is used in the manufacture of chrysotile cement, in the form of pipes, sheets and shingles. The panel decided that the ban was legitimate because WTO rules allow countries to restrict trade where necessary to protect human health or the environment. A month later, Canada appealed this decision on the grounds that the panel had ruled outside of its mandate. The latest ruling issued in a report by the WTO's Appellate Body in Geneva upholds the panel's decision that the dangers posed by the professional or accidental manipulation of asbestos justify strict measures, including a ban. In a landmark finding, the Appellate Body said that health considerations must be taken into account when interpreting anti-discrimination rules, and products entailing health risks cannot be compared with safer substitutes. Governments can therefore treat dangerous substances differently, said the Appellate Body. Canada is the world's leading exporter and second largest producer of chrysotile after Russia. Canada produced some 320,000 tonnes in 1998, accounting for 18.2 percent of global output and 2,500 jobs in Quebec where asbestos is mined. Source, "WTO Upholds French Ban on Asbestos", 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
 
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GENETICALLY MODIFIED FOODS BAN CHALLENGED UNDER WTO
 
Canada and the United States plan to use the WTO to challenge Europe's decision not to eat food that contains genetically modified organisms (GMO's). Europe is concerned that GMO food production and consumption can harm the environment and health. Canada and the United States want to challenge Europe'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 International is quite concerned stating that, "it is ironic, given that the US and Canada  have this year vigorously  opposed negotiations on effective international rules to govern the use of GMOs in food and agriculture. A Biosafety Protocol, under the Convention on Biodiversity, was  to set rules on the international movements of GMOs which would give countries a right to say no to GMOs on environmental grounds (threats to biodiversity)." But the 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 Biosafety 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 attempts to block the European ban of GMO's, one of Canada's largest food companies, McCain Foods Ltd., has decided to not produce GMO potatoes, and instead it will process clean potatoes and potato
products that can be exported to Europe. See McCain's website at http://www.mccain.com/
 
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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-label 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 Canada and has been privatized and is run by Terrachoice. There are other eco label programs including Blue Angel in Germany, Dutch Ecolabel in The Netherlands, and Green Seal in the United States. The Green Seal program  is the independent, nonprofit organization  dedicated to protecting the environment by promoting the manufacture and sale of environmentally responsible consumer products. It sets environmental standards and awards a "Green Seal of Approval" to products that cause less harm to the environment than other similar products. By setting standards for environmentally responsible products, Green Seal seeks to reduce air and water pollution; cut the waste of energy and natural resources; slow ozone depletion and the risk of global warming; prevent toxic contamination; and protect fish and wildlife and their habitats. All of these eco labelling programs could be wiped out or neutralized  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 less 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/ .
 
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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 environmentally friendly products, and purchase from companies that meet certain environmental management guidelines (such as be certified ISO 14000 compliant), can have their green procurement guidelines struck down by challenges by countries 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 bid 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, when the companies themselves do not have ISO14000 or EMS. What if the Government of Mexico decides that no wood from "old growth forests" in the temperate climate (Canada) or the tropical climate (Brazil) can be used on government building construction projects? Would it be forced to back down?
 
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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 international 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 any sealing nation because of the conservation and humane concerns of its citizen's related to seal harvesting. This has had a significant impact on Canadian seal markets. It has virtually reduced the demand for seal products in the U.S. to zero. In response, Canada's House of Commons' Standing Committee 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 reported that, "the MMPA may contravene the General Agreement on Tariffs and Trade (GATT)" under the World Trade Organization (WTO). Specifically, the Committee recommended that Canada:
 
      o   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
 
      o   must seriously consider seeking a review under GATT of the prohibition on the importation of Canadian seal products into the United States
 
      o   undertake an immediate examination of the U.S. MMPA to ensure that 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 Minister, Hon. David Anderson to also intervene in the United States on behalf of Canada to reduce the non tariff trade barrier established by the U.S. Marine Mammal Protection Act (MMPA). If Canada were able to reverse the MMPA under the free trade guidelines, the CSA reports that the market for seal products would grow considerably. The Department of Fisheries and Oceans has formally asked what action the U.S. government is contemplating to bring the MMPA into conformity with international obligations so that harp seal furs 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 Free Trade Agreement (NAFTA) to press for the U.S. to stop what Canada would term "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 House of Commons Committee Response recommendation number #6, on seals agreeing that trade action should be taken on exporting seals products to the United States at http://www.ncr.dfo.ca/COMMUNIC/Reports/seal/gr-seals_e.htm
 
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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 Cooperation (CEC) is an international organization created by Canada, Mexico and the United States under the North American Agreement on Environmental Cooperation (NAAEC). The CEC was established to address regional environmental concerns, help prevent potential trade and environmental conflicts, and to promote the effective enforcement of environmental law. The Agreement complements the environmental provisions of the North American Free Trade Agreement (NAFTA). Two aspects of the CEC make it effective. First, it promotes common cooperation on an upwards harmonization of environmental protection. This include (1) strengthening environmental enforcement and improving environmental reporting such as the Pollutant Release and Transfer Reports - PRTR's, (e.g., the U.S. Toxic Release Inventory TRI, and Canada's National Pollutant Release Inventory NPRI); and, (2) Chapters 14 & 15 citizen challenges when countries are not enforcing their own national environmental laws. These have made NAFTA a strong protector of the environment in this area. The CEC is a model for implementing similar systems within other trade agreements such as FTAA. However, it is understood that there is strong resistance by some governments and their corporate allies to having similar mechanisms 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 further harm the environment Visit the Commission for Environmental Cooperation (CEC) website at http://www.cec.org/home/index.cfm?varlan=english .
 
 
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            Canadian Institute for Business and the Environment
                                     Toronto and Montreal
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