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
************************************************************************** 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 **********************************************************************
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 ********************************************************************
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/ ****************************************************************************
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 . ************************************************************************
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
***********************************************************************
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/ ***********************************************************************
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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