Trading Democracy

Bill Moyers program about nonUS (esp. Canadian, Mexican) companies suing the US for damages based on our local policies (e.g. an anti-pollution law blocking their products counts as damages for them, so NAFTA lets them sue us), and with judgments being made by "secret tribunals".

Have just (Feb'02) finished reading the transcript and I'm not impressed. There seems to be a big problem, but the program's analysis is awfully muddy.

The facts which seem agreed-to:

  • Nafta Chapter Eleven is being used as a basis for corporations to sue the governments of foreign countries where they do business for damages when laws change that affect their business (e.g. when California outlaws a gasoline additive, a Canadian company which makes a key ingredient in that additive sues the US).

  • the key phrase is "No Party may directly or indirectly nationalize or expropriate an investment of an investor of another Party in its territory or take a measure tantamount to Nationalization or expropriation of such an investment ("expropriation")..."

  • the judgements in these lawsuits are made by a three-man tribunal (not a single one in the world, there are a variety of them, I'm not sure whether the same "experts" serve continuously in a geographic area), which operates in secret (no transcripts, no public list of witnesses for either side, etc.)

  • these corporations would not be able to sue their own local or national governments on the same basis

  • some of the lawyers making lots of money in this business are people like CarlaHills and Daniel Price, who helped draft it.

Some issues:

  • were the current "style" of lawsuits being brought intended/foreseen by the authors and approvers of NAFTA? Many say no, Daniel Price says yes.

  • perhaps the root problem is that no country wants truly Free Trade. NAFTA is a way of regulating trade in a "more-free" way, but thus requires more complex/subtle regulatory control. Because it's an attempt to use laws to protect you from relationships with someone you don't trust. Thus, weird cases may be more likely.


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