The Globe and Mail
Investment regulations have allowed foreign firms to sue government
By Heather Scoffield, Parliamentary Bureau, Ottawa
Trade Minister Pierre Pettigrew says he will never again pursue strict NAFTA-like investment rules that allow foreign companies to sue the Canadian government.
The North American free-trade agreement has a controversial provision that allows foreign companies to seek compensation from Ottawa if the federal government takes actions that hurt the companies' business in Canada.
The provision, called an investor-state dispute mechanism, has led to numerous multimillion-dollar lawsuits against Ottawa.
Until now, federal government policy has been to push for a similar mechanism in free-trade talks with Latin America, with Asia and possibly at the World Trade Organization.
Mr. Pettigrew renounced that policy yesterday.
"I can assure you, we are not seeking an investor dispute mechanism at the WTO ... or anywhere else either," Mr. Pettigrew told the House of Commons foreign affairs committee.
While New Democrat trade critic Bill Blaikie welcomed the announcement, the Liberal chairman of the committee, Bill Graham, was not so pleased.
"I'm not so sure it is good news," he said.
Public pressure to abandon the NAFTA approach allowing foreign companies to sue governments has been growing.
The federal government has tried to convince its NAFTA partners, Mexico and the United States, to clarify the investment rules in the agreement by adding a statement saying that the rules could not be used to attack social, environmental or labour policies. But Mexico and the United States have resisted.
The inclusion of similar rules in the proposed Multilateral Agreement on Investment under the Organization for Economic Cooperation and Development were the main target for much of the public protest against the deal and eventually led to its failure.
Business groups tend to like strict investment rules since such regimes protect their foreign investments from arbitrary and discriminatory actions by foreign governments.
All of the NAFTA investor cases in Canada are still continuing, except for Virginia-based Ethyl Corp.'s case against Ottawa. That case was settled by the federal government paying the company $20-million and agreeing to get rid of a law banning a gasoline additive produced by Ethyl.
Mr. Pettigrew also presented his trade priorities for the coming year, putting better access to the United States, European and Japanese markets at the top of the list.
Canada will push the United States to drop unfair measures against Canadian beer, alcohol and hemp, the trade priorities report said.
Canada will also join a WTO case, led by Europe against the United States, to make sure the United States stops using discriminatory intellectual property rules against foreign companies. And Canada wants the United States to lift its ban on Canadian ringed and harp seals.
As for Europe, Canada wants the European Union to stop using the environment as an excuse to keep out Canadian products such as grain that is genetically modified, asbestos, lumber, beef, potatoes and non-ferrous metals such as lead, mercury and cadmium.
"Canada is concerned that measures intended to protect the environment and the health and safety of consumers could, in fact, constitute unwarranted technical barriers to trade if they lack a firm scientific basis," the report says.
Ottawa also promises to work on better access in Japan for a long list of mainly agricultural products, including genetically modified foods.:
