Ethyl Corporation and Common Misconceptions Regarding NAFTA

Title: Ethyl Corporation and Common Misconceptions Regarding NAFTA
Topic: Globalisation and Trade
Written By: Michael Scott
Date: Monday, April 25 at 22:47
Does the Ethyl Corporation's successful suit against the Canadian government regarding the ban of the chemical MMT illustrate that corporate profits trump a sovereign state's ability to protect their citizens under NAFTA, or does this case provide an example of a law that was rushed to take advantage of political optics and as a result was poorly crafted and subsequently overturned?
read more

Your points about the Ethyl Corporation lawsuit are well-taken, of course, but is it the case that every NAFTA-related lawsuit is based on similar grounds?

I'm not necessarily opposed to modifying the Canada Health Act, for example, to allow for greater private delivery of health services, but I'm chilled by the notion that some private health company could issue a NAFTA challenge to our public health system. Similarly, private parcel companies like UPS have already sued to try and get Canada Post out of the parcel delivery business...never minding that Canada Post provides a cheap alternative for many small businesses, and I haven't heard of UPS being in any financial difficulty or otherwise being shut out of any markets because of it. Wasn't there another NAFTA lawsuit that resulted from the B.C. government's refusal to allow bulk fresh water exports for one reason or another?

I have my disagreements with the likes of Linda McQuaig and Mel Hurtig, but I think they're still making a very prescient warning about the potential dangers of the Chapter 11 provisions, even if the Ethyl case was spurious. What were the circumstances of the other cases?

I don't know the details regarding the bulk water exports, but I do know a bit about the Canada Post vs. FedEx and UPS. FedEx and UPS contended that CPC had a monopoly that artificially kept pricing for remote areas low by using similar pricing for more urban areas. Basically, Toronto is subsidizing Iqualit. As CPC is an arms length government organization, the suit laid out that the government was engaging in unfair business practices and utilizing taxpayer dollars to keep pricing artificially low thus keeping competition out of the potentially profitable rural locales. They did file a claim under NAFTA (though I don't think it was chapter 11 but I'm not 100% sure) but it was thrown out. As a company, CPC receives no direct taxpayer money and thus the utilization of its vast network to subsidize unprofitable outlying areas was not unfair business practice but instead a business decision that CPC was totally permitted in making. The court basically told FedEx and UPS to go build their own network and quit bugging CPC.

I will agree with you that we need to maintain vigilance with respect to Chapter 11, but we have to remember that corporations, like people, have the right to sue for any perceived slight. So long as the laws are written properly and the courts uphold those laws, we should be OK. When a specific law or provision causes an actual issue, that should be addressed immediately. My only commentary is that I can find no actual case in which Chapter 11 or NAFTA in general has been used to overturn a sovereign issue regarding health or safety. I would be willing to concede the point if someone could point out a specific use of NAFTA that did result in our loss. I took issue with the Ethyl Corporation because it seems to be the casus belli for the anti-NAFTA crowd, when in fact it was the result of rushed legislation trying to plug a hole that Health Canada couldn't at the time.

Point is, the government, representing the PEOPLE, should have the power to ban certain things like MMT, known to cause harm, and not fear a penalty because of it. Otherwise, it illustrates that our government really isn't in control. And yes, once bulk water shipments are made by a private water company, provisions of NAFTA kick in, and its literally an opening of the floodgates. We Canadians will lose control over our water resources, which is what the banker-corporate fascist crowd wants. Because, once control over resources, water, and food is complete, then control over the people is finalized. And corporations are not people! They by their very size and wealth accumulation, wield so much power that people and the environment are steamrolled over for the purposes of profit. Health and safety- gone! Human rights- out the window! Environmental destruction- amplified! No, corporations and banks should be controlled closely, or else too many people get hurt! And to point out how the Mike Harris government scaled back pollution laws in Ontario, making Ontario 3rd worst polluter in North America behind Texas and Pennsylvania, what this means is that under Chapter 11 of NAFTA, future governments cannot improve pollution laws in Ontario or Canada if it means that new laws require businesses and industry to spend money to upgrade, because after all, it hurts their profits! So, new lower standards will stay! Boy, I can't understand how people can just accept this race to the bottom.

Dave, not one thing you mention has occured. Which either means that corporations are acting ethically (and I think we both agree that that's a slim chance), or the laws were written to prevent this from occuring. If you can point to a pollution law that McGuinty has tried to pass and has either failed or been challenged under any provision of NAFTA I'll concede the point.

I don't disagree that we need to have the right to pass laws to ban things that cause harm. The issue with MMT was that the Health Canada study didn't show that it did. The report from Environment Canada didn't show any health effects either. You don't get to ban something on speculation. What the government should have done was to send the experts back to the lab to get a more detailed study and to incorporate findings from the EPA and the UK. And then they could have made a ban for safety reasons. But they didn't do that, they tried an end run around the law by making the business climate intolerable for Ethyl Corp. They never tried to ban it. And that, not any finding of health or safety, was what sunk the law in Canada.

I'm cognizant of your warnings. I hear your arguement. It's just that there is no evidence that shows that any of the issues you raise have occurred.

LOL. Although they have produced studies that show that it does impair brain function - as does alcohol. But it's ban isn't a NAFTA issue.

Michael, these things are going on as we speak. I never said that McGuinty did anything. I only said that if he were to get a backbone and actually do something, NAFTA would prevent him from doing so since we the taxpayer would be sued. But I'm glad you mentioned McGuinty, because he actually did- wait, no he didn't really do anything. He only raised the issue of the privatized highway 407 and how the tolls were too high, as people all over the province were complaining of this injustice. Well, McGuinty literally came out afterward and said that there's nothing the government can do about ridiculous tolls on highway 407. But of course, he didn't say why. The culprit? -Chapter 11 of NAFTA. Same goes for the price of gas controlled by the oligopoly sociopaths. Guvmint claims they can't do nuttin. But again, they don't dare describe why. NAFTA and monetary reform are taboo subjects for any politician. And same goes for health care. Private MRI here, private clinic there, P3 hospital there, all done in small steps so as not to alarm those who still sleep, and now we have the deliberate destruction of public health care in Canada, even though, all governments ignore the Romanow Report. Now we have the demand by private entities wanting in on our health care system. Of course, under NAFTA, we can't stop them. Again, governments dare not mention Chapter 11 of NAFTA. As for Health Canada, they were forced under NAFTA to totally recant any negative statements made about MMT lest we the taxpayer be sued further. So, if Ethyl Corporation finds democracy in Canada 'intolerable' then they should merely go to some place that practices fascist dictatorship! But the corporations are helping that along well enough here... But you get full points for stating that there's a slim chance that corporations will act ethically. You've made some strides!

Well now, if it's a NAFTA issue, then we should push hard for the legalization of pot here. It seems about 30+ percent of Canadians are smoking or eating it now anyway since their seriously thinking of voting in an NDP government. Once we have pot legalized here, we have a company set up to grow and sell it. And then, under NAFTA's Chapter 11 we can then remove the sovereign US laws that make pot illegal there. I mean, if your theories hold true anyway. Somehow I doubt that is what would happen though.

Dave, while I agree that some of the issues you describe are occurring, I cannot draw the direct correlation to NAFTA that you do. You blame NAFTA for everything from 407 road tolls to privitization of health care without describing any specific ties. By that same reasoning, I will say that the increase in life expectancy in the past 20 years is directly related to NAFTA. Using your logic, all the proof I need for my assertion is that they both occurred during the same time period.

I don't know how else to describe it to you. NAFTA was not a trade agreement. It was a corporate wish list. It eliminated government control over the Canadian, and American and Mexican, economies for that matter. It is the blueprint that the WTO is currently using to push on the world their global corporate rules which tie the hands of all governments. And I thought I broke it down quite clearly- Harris is to blame for the 407 fiasco. NAFTA is to blame for any future governments that try to get out of it, or try to regulate ridiculous toll fees. Mulroney is to blame for FTA. Chretien is to blame for NAFTA. Harper is to Blame for TILMA and the new secretive European 'free trade' deal, which is NAFTA on steroids. All governments of the last 30 years, be they federal or provincial, are to blame for allowing increased privatization of health care, knowing full well that NAFTA ensures a spiral downward into for profit American style health care. I could go on and on, but hopefully this clarifies it. And if NAFTA did in fact increase the life expectancy of all Canadians during the last 20 years, you,d win a convert in me. But I think we both know that with increased privatization of health care,and the loss of good paying jobs, being replaced with low wage no benefit part time jobs, forcing people to work longer and harder, just to name only two faults of NAFTA, I think we know that NAFTA is indeed shortening the lifespan of many, many people in North America.

Perhaps a better question might be why the Danny Williams government was sued under NAFTA for trying to make sure more of the oil produced from the Newfoundland projects at Hibernia and the Grand Banks were refined in Newfoundland & Labrador itself. He very clearly had the public behind him, and it did the Newfoundland economy a world of good in the associated economic activity that came with more of the oil being produced and refined in Newfoundland itself, but the corporate interests tried to sue him. What was their justification for doing so?