December 13, 2005

NAFTA Chapter 11

Everyone should be aware of "the other Chapter 11" that is Chapter 11 of the North American Free Trade Agreement (NAFTA). NAFTA includes rules on protection of foreign investments. It undermines democratic choices by allowing foreign businesses to challenge local laws if those laws infringe on their profits.

Examples include the California legislature self-censoring legislation, because of fears that Mexican of Canadian businesses will bring a costly law suit. The State's fear was based on a nearly $1 Billion legal challenge by Canadian corporation Methanex, claiming lost profits after the State tried to ban the sale of the gasoline additive MTBE. California scientists had discovered MTBE was leaking from underground storage tanks and contaminiating drinking water. MTBE is a suspected carcinogen. (See timeline with "happy" ending below).

The Free Trade Area of the Americas (FTAA) would expand this to apply to all corporations in the Western Hemisphere doing business in the USA.

An excellent expose' on NAFTA Chapter 11 was done by Bill Moyer:
Moyer Link

You might also consider reading the beginning of George Soros' "The Crisis of Global Capitalism: Open Society Endangered." It provides a powerful indictment of "free market fundamentalism," which even speaks to those who strongly believe in the capitalist system.

MTBE Chapter 11 Case Timeline:

MARCH, 1999
California governor calls for the phase-out of MTBE, which is used to help reduce air pollution, citing fears it is creeping into groundwater. MTBE has been linked to cancer.

JUNE, 1999
Methanex uses a controversial chapter of NAFTA accord to demand US$970-million in compensation from the U.S. government, alleging the California ban unfairly undermines its market.

AUGUST, 2005
NAFTA panel dismisses claim and orders company to pay US$4-million in legal fees. (The unsettling thing is that the "NAFTA panel" is a secret procedure run by unelected officials, which could easily be corrupted.)

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