When Quebec banned the cosmetic use of pesticides several years ago, Dow AgroSciences used a controversial section of the North American Free Trade Agreement to sue the federal government for lost potential profits.
Next week, the House of Commons international trade committee will hold a hearing on the implications of NAFTA Chapter 11 and its use by private companies to challenge the impact of government decisions on their investments. Chapter 11 was designed to protect foreign investors with the goal of encouraging continued investment.
It has become a focus for the campaign against globalization. Many believe it favours trade rules over environmental or health regulations and limits the abilities of governments to set their own rules.
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British Columbia New Democrat Peter Julian, who moved the motion that led to the committee study, said the issue is not whether banning cosmetic pesticide use is good or bad politics.
It is the ability of governments to act in the interests of their citizens.
“Governments make their decision based on scientific evidence so one can assume if government moves to ban a product, it’s because clearly there are toxic ramifications,” he said.
“We’re not into redoing the science around this decision. What we find very disturbing is that a company can now use the Chapter 11 provisions to try to force a government to backtrack on something that has wide levels of popular support.”
He said the March 24 committee hearing on the issue will be aimed at producing evidence that will help Canadians understand the dangers of a NAFTA rule that gives international companies the right to challenge government decisions and receive compensation if their operations are undermined.
“NAFTA’s Chapter 11 provisions have been criticized as shutting down democratic governments and Dow’s challenge is clearly a case in point,” Julian said. “The province of Quebec, with broad support from the population, banned toxic pesticides and now a major chemical company is trying to use Chapter 11 to shake the government down and get compensation for products that clearly have profound health effects. This issue must be brought in the public domain.”
He said if Dow AgroSciences wins its Quebec challenge, it would cast a cloud over other provinces or governments considering a similar policy in response to public pressure, such as a plan by the Ontario government to implement a cosmetic pesticide use ban that includes 2,4-D starting April 22.
However, while the committee may criticize the NAFTA rule after its public hearing, there is no way to change it short of renegotiating the 15-year-old trade agreement.
While U.S. president Barack Obama mused about doing that during his campaign for the White House, he has not returned to the topic when in office. The Canadian government has shown little interest in renegotiating the agreement.
Dow AgroSciences is suing for $2 million in potential lost profits.
