5 Environmental Reasons to Oppose the FTAA Sierra Club of Canada Apr01

5 ENVIRONMENTAL REASONS TO OPPOSE THE FTAA:
5 RAISONS ENVIRONMENTAL POUR OPPOSER LE FTAA:
5 RAZONES MEDIO AMBIENTALES DE OPONERSE AL ALCA:

MATERIALS PREPARED FOR
THE PEOPLE'S SUMMIT OF THE AMERICAS,
QUEBEC CITY, APRIL 2001

forward

It is easy to feel over-whelmed by the monolithic institutions and globalizing trade deals. With the World Trade Organization hammering away at public services and the threat of expanding the North American Free Trade Agreement to the entire hemisphere of the Americas, I understand the feeling of hopelessness that some of us feel. But we cannot afford to despair! The surest way to turn back the tide of increasing corporate control of our lives is by expanding our own knowledge and trade literacy. It really is like learning another language to break apart the lexicon of trade liberalizers and be able to confidently explain to friends and neighbours why something called an "investor-state" provision is dangerous, or why expanding the "liberalization of services" could threaten environ-mental regulation.

Knowledge is power. And none of us is powerless. In preparation for the Summit of the Americas and the negotiations of 34 nations, everyone in the hemisphere except Cuba, the Canadian Alliance on Trade and the Environment asked Christine Elwell to pull together a guide to how the FTAA threatens environmental protection. We thank The C.S. Mott Foundation and all of the many contributions to this effort. Five Reasons why you should oppose the FTAA will ultimately give you more than 5 reasons! It will give you the technical details in a non-threatening format. Please contact us for more information, join the FTAA teach-ins where ever you are. And no matter what - do not despair. We are winning!

Canadian Alliance on Trade and Environment

The Canadian Alliance on Trade and Environment (CATE) represents a coalition of Canadian public interest and labour groups. The mission of CATE is twofold: 1) to represent common interests of its supporting organizations by advocating that governments and other institutions in Canada defend the environment and democratic rights on matters related to trade; 2) to bring about full access and input for civil society at the level of national and multilateral trade policy development.

The work of CATE follows up on that undertaken by the Common Front on the World Trade Organization (CF-WTO) since 1996. The CF-WTO is set to continue its work, focussing on the impacts of trade globalization on social services, labour standards and culture. The Steering Committee of the Canadian Alliance on Trade and Environment consists of representatives from the following organizations: Sierra Club of Canada, Canadian Labour Congress, Council of Canadians and the Polaris Institute.

1 Background to FTAA

There is a myth that the concerns for environmental protection are only shared by northern NGOs and other protectionists forces within these economies. Exposing the environmental consequences of undisciplined free trade is seen at best as naïve and at worst as disregard for the aspirations of developing countries and their people. But as our experience with trade agreements and other international financial institutions grows, the evidence is clear that all peoples want clean water to drink and clean air to breathe.

A. Previous Forgotten Promises

At the first Miami Summit in 1994 the 34 member states of the Organization of American States (Cuba was suspended in 1962) agreed to work towards creating a Free Trade Area of the Americas ("FTAA"). The FTAA was to provide free market access for goods and services to the entire hemisphere. With a population of 800 million and a GDP of 11 trillion US, the FTAA would be the largest free trade area in the world. The meeting produced a Declaration of Principles that seeks to expand prosperity through economic integration and free trade; to eradicate poverty and discrimination in the Hemisphere; and to guarantee sustainable development while protecting the environment.

Another outcome of the Miami Summit was the inclusion of a proposal from the President of Bolivia, Gonzálo Sánchez de Lozada, to call a specialized Summit on Sustainable Development to be held in Santa Cruz de la Sierra, Bolivia in 1996. The objectives of the specialized Summit were to establish a common vision for the future according to the concepts of sustainable development and to ratify the principles subscribed to at the 1992 Earth Summit held in Rio de Janeiro, Brazil.

The Unit for Sustainable Development and Environment was to be the principle arm of the OAS to follow up on Rio 92 mandates and the mandates given to the OAS from the Bolivia Summit. A new political body the OAS Inter-American Committee on Sustainable Development would exchange the relevant information and co-ordinate activities. But instead of the Unit engaging in a thoughtful Environmental Impact Assessment of the various trade negotiating committees of the FTAA, the main function appears to be preparing projects for loan consideration by bilateral and multilateral agencies such and the Inter-American Development Bank and the World Bank.

The OAS was left with no resources and no momentum to monitor the 65 initiatives that came out of the Bolivia Summit and the so-called Santa Cruz Action Plan. Instead of consolidating environmental protection into a coherent whole, the decision was taken to separate out into two tracks the FTAA trade agenda from everything else around sustainable development. The Santiago Summit of 1998 saw the complete removal of sustainable development from the goals and agenda of the FTAA project.

It is no surprise, therefore, that all of the political energy goes to trade liberalization and environmental protection is hardly on the map, except to be further undermined by the trade rules emerging from the various FTAA working groups. As in the case of the WTO, the traders also hope to see a number of so-called business facilitation measures and early harvest agreements in particular sectors on forestry, on energy, on fisheries before the hard trade-offs need to be made, if at all. But instead of a coherent plan to avoid or mitigate the negative impacts, governments give vague assurances that environmental issues will be dealt with on a case by case basis...so much for Rio!

State members of the Quebec City Summit will review a draft text for an FTAA. While heavily bracketed, this text will reveal the direction Ministers are headed as the basis of further negotiations to be completed by the end of 2004, or sooner. Leaders are billed to address common hemispheric challenges, including economic integration, improved access to education, poverty alleviation, and enhanced respect for human rights and democratic development. But not the environment! The Americas Minister of Environment met in Montreal prior to the Quebec City summit but reportedly could not agree on any joint statement to present to their trade minister counterparts.

The FTAA project continues to deny the connections between trade liberalization and environmental stress. All nations in the hemisphere face common environmental problems. One thing is certain, however, the environmental degradation induced or at least aggravated by free trade is not a "non-trade" issue to be separated out from trade negotiations into discussions later on, if at all. Where will the independent environmental impact assessment of the FTAA project be conducted, at the remote OAS Unit for Sustainable Development? Where will the evidence be found whether FTAA nations are fulfilling their Miami pledge to guarantee environmental protection? Media reports indicate that all Latin American countries oppose a link between trade and environment, except vague suggestions otherwise from the US administration, with the Canadian government also remaining silent on the need for an environmental side agreement.

B. The FTAA Negotiations

The FTAA negotiations will be carried forward under a structure with geographical representation by the participating countries, with a rotating chair, site of negotiations, and responsibility of negotiating groups. Trade Negotiations Committee (TNC) is responsible for the oversight of negotiations. The Chair of the FTAA process holds the Chair of the TNC. The function of Chair of the FTAA process for successive 18-month periods are: Canada; Argentina; Ecuador; and Brazil and the United States (jointly). A Consultative Group on Smaller Economies was created, chaired by Jamaica, and reports to the TNC. Seven of the FTAA countries produce 93% of the GDP.

Unlike big business, the Civil Society of the Americas has not been effectively engaged. A Committee of Government Representatives on Civil Society was established to represent the views of civil society to the TNC. Yet this committee is little more than a mail in-box. We support the call of Common Frontiers and the Hemispheric Social Alliance for a face to face, summit to summit, consultation at Quebec City.

As Council of Canadians Maude Barlow's analysis of the FTAA reveals: "In the beginning, the big corporations and their associations and lobby groups have been an integral part of the process. In the US, corporate committees advise the American negotiators and, under the Trade Advisory Committee system, over 500 corporate representatives have security clearance and access to FTAA negotiating documents". These corporate efforts have paid off with Ministers of Trade of the Americas agreeing to implement 20 "business facilitation measures" to speed up customs integration. Fast-Track customs clearance is sure to lead to mass increases in hazardous waste and other illegal trade. Yet where are the measures to facilitate environmental protection?

C. Lack of Environmental Impact Assessment and Alternatives to FTAA

There is no indication anywhere how the proponents intend to address the significant environmental costs likely to occur due to increased forestry, mining, shipping transport, fossil fuel extraction, fishing and other environmentally harmful activities following the enactment of the FTAA. For example, what will be the relationship of the FTAA to multilateral environmental agreements?

Despite the overwhelming public concerns with globalization and the role that trade and investment agreements play in the corportization of the planet, the Canadian government is determined to forge ahead. Instead of providing the obviously necessary political leadership as host of the Quebec City Summit that the FTAA project integrate environmental protection and conservation into its trade and investment agenda, as promised at Rio, the government's response is that each FTAA Trade Negotiating Group "should consider relevant trade and environment issues as they arise".

Indeed this is the type of environmental impact assessment we can expect despite all the fanfare over the recently released Canada's Framework for Conducting Environmental Assessments of Trade Negotiations. According to Bob Gibson of the University of Waterloo the Framework focuses too narrowly on biophysical effects in Canada alone, with only reference to the predefined negotiating position for each individual trade agreement, relying upon internal expertise and existing information. Media reports indicate this meager Framework will not be in place in time to assess the FTAA. To further the FTAA momentum Canada has also launched free trade deals with Costa Rica, with the four Central American countries of El Salvador, Guatemala, Honduras and Nicaragua, and now with the Commonwealth Caribbean.

The government's own summary of public comments on the draft Framework indicate more that three-quarters of the respondents called for a broader definition of the environment than just biophysical effect to encompass sustainable development, that is the interactions among social, economic and cultural as well as environmental effects. The Liberal Party was nevertheless unmoved. There remains no serious opening for consideration of alter-native trade arrangements, the chief role of assessment is merely to identify "mitigation and enhancement options".

Canadian Trade Minister Pettigrew explains that environmental negotiations in the context of the FTAA would only "bog down" the process and discourage Central and South American developing countries. This raises the question whether any of these government's in fact speak for their people's aspirations around sustainable development and environmental protection.

D. Our Continuing Demands

The Canadian Alliance on Trade and Environment demands the release of the draft FTAA text, supporting only fair, green and democratically arrived at trade deals that ensure the sovereign right and duty of government to act in the public interest. There should be no trade agreement that does not address the mounting negative environmental impacts already experienced under the WTO and NAFTA.

We note that the Civil Society of the Americas - the Hemispheric Social Alliance, that had its beginnings at the 1998 People's Summit - continues to maintain that "There should be no FTAA if it does not include protection and improvement of the environment, with special attention to food security".

We provide five main environmental reasons to oppose current trade agreements, with specific reference to the FTAA. We feature issues around sovereign rights over natural resources, controls over exports and imports, including investment, as well as the setting of product production standards to gain market access. There are alternatives.

Canadian Trade Minister Pettigrew proclaims "a rules-based international trading system that serves all countries, regardless of their economic weight or level of development is central to my trade development mission". But when the traders speak of a rules-based system we must continue to ask as Stephen Clarkson of University of Toronto puts it: "Who is making the rules, on whose behalf and for whose benefit"?

2 ONE: FTAA removes controls to protect Natural Resources and Human Health

What the rules say: Basic trade rules around national treatment (investors/corporations from all FTAA countries must be treated the same as domestic and local service providers) and non-discrimination act as a barrier to natural resource conservation and protecting human health. Trade rules provide foreign corporations precisely the same access to crown resources as is available to Canadian citizens, companies and First Nations. This result offends the strong environmental ethic to "discriminate" in favour of local allocation of public natural resources and resource management to avoid the "Tragedy of the Commons" and to achieve sustainable development.

While trade and investment agreements foster access to resources and markets, they engender no obligation of stewardship. Indeed foot loose multinationals do not care enough to protect the resource in the long term. As trade lawyer Steven Shyrbman explains: "Those that must live with the consequences of destructive resource practices will often have the greatest stake in ensuring long-term sustainable management. They should be given a central role in determining local management issues and priorities".

Without any meaningful controls on the scale and cumulative impacts of resource exploitation, the rapacious rates of consumption soon exhaust non-renewable resources or overwhelm the capacity of renewable resources to regenerate. Natural resources that were once subject to national priorities and controls, now become the common property of all non-domestic and domestic investors. At the same time, the capacity of government to impose conservation constraints is weakened. Under NAFTA the Canadian government gave up important tools for conservation, including the use of price differentials to reflect higher rates for non-domestic assess to resources and other traded goods.

Trade agreements also prohibit quantitative restrictions such as outright trade bans that deny market access all together or even more limited quotas. Traders prefer agreed tariffs to provide any support to domestic producers so that negotiations can eventually eliminate them to zero. Disguised quotas or so called "non-tariff barriers to trade" such as export and import license requirements, state trading enterprises and environmental standards are also strictly disciplined.

There are a number of general exceptions in trade agreements that purport to recognize the objective of free trade is somehow moderated to accommodate other competing policy objectives. These exceptions include: the protection of public morals, human and animal life, and environmental protection for exhaustible natural resources and goods relating to national security. While the exceptions appear to reverse the presumption in favour of national and most favoured treatment, or the presumption in favour of minimum international standards, the disputes at the WTO and NAFTA indicate their continuing ineffectiveness. The FTAA tips the balance in favour of trade even more.

Without a sea change in trade rules, any further or accelerated tariff reductions and market access agreements should be avoided in environmentally sensitive sectors such as forest, fish and energy. A 1999 Clinton administration study by the USTR and the Council on Environmental Quality found that tariff reductions in wood products, for example, would increase the clearcutting of forest, especially in the south.

Relevant FTAA Negotiating Groups

Work in different groups is interrelated, such as agriculture and market access; services and investment; competition policy, subsidies and countervailing duties; among others.

FTAA Market Access Group (chaired by Colombia): The Market Access negotiations are divided into two segments. The first part deals with the obligations and rules, while the second part allows for the identification of exceptions. The objective is to progressively eliminate tariffs, and non-tariff barriers, as well as other measures with equivalent effects, which restrict trade between participating countries. While all tariffs will be subject to negotiation, different free trade timetables may be negotiated. These objectives also apply to trade in agricultural products but the rules of origin, customs procedures and Technical Barriers to Trade issues are covered in the Market Access negotiating group.

The US resistance to a value-added system for determining rules of origin as raising complex issues such as how to account for the cost of environmental and labour inputs remains a barrier to the goal to internalize the costs into production into goods.

Customs Procedures: The goal of this negotiation is "to simplify customs procedures, in order to facilitate trade and reduce administrative costs" while designing "effective systems to detect and combat fraud and other illicit customs activities, without creating unnecessary obstacles to foreign trade." The stated goal is to promote customs measures that ensure transparency, efficiency, and integrity. US business groups have been pushing for custom reform that could take place in advance of the final FTAA.

A. What the evidence shows on export controls of natural resources:

B. What the evidence shows on import controls to protect Human Health

the asbestos dispute - France vs Canada

The focus of this complaint was a decree that France had imposed banning all imports of asbestos and all products containing asbestos from its market. The French decree was a general non-discriminatory law that prohibited the production, transformation, selling, importing or placement on the market of any product containing asbestos fibers. The only temporary exclusions were for certain existing materials, products or appliances for which no substitute was available. While the WTO upheld the first ever-successful defense of domestic legislation under the general exceptions article in the GATT Article XX in fact, by this decision the WTO further restricted the right of nations to invoke a general import prohibition or ban of a clearly dangerous product. The ruling determined that the import ban was subject to the WTO Agreement on Technical Barriers to (TBT) that establishes a strict review of the appropriateness of domestic technical standards that imported products must meet to gain entry to that market. In the case of the French decree, however, there was no market open to asbestos products at all therefore, the rigours of the TBT should not have been applicable. Because asbestos is not a "like product" compared to non-asbestos substitutes, there was no national treatment obligation after the decree was issued requiring France to justify technical standards for the product's use since asbestos was not allowed in the market at all. In effect the WTO expanded the scope of the TBT Agreement to cover not only technical standards for product entry but also to justify a general product ban even when there was no domestic market open for it.

EU-Measures Affecting the Prohibition of Asbestos Products, WTO, 2001.

Water

By defining water as just another "good", the WTO, the NAFTA and likely the FTAA seek to transform water, a critical and exhaustible natural resource into just another commodity for the global marketplace. National treatment market access, investor rights and service obligations mean governments must treat non water basin service providers of water and treatment the same as public sector entities with non-commercial mandates of public health, conservation and providing affordable water for Canadians.

These trade obligations also effects the limits a willing government places on its rate of extraction and trade. Trade principles of "proportionality" mean that, as in the energy sector, Canadians could never in effect end trade in water regardless of the environmental effects in Canada or the needs of Canadians.

Most alarmingly, investor rights in trade agreements, such as in Chapter 11 of NAFTA and in the failed MAI, allow investors from outside Canada to secretly sue the Canadian government should it even consider passing a law that interferes with its ability to make profits out of water development and trade, now or in the future.

The Proposed Federal-Provincial Accord to protect water does not directly address trade deals, and thus fails to be the basis of a comprehensive and effective approach to protecting Canada's water. It would do nothing to actually prohibit water exports. No independent and creditable enforcement mechanisms are envisioned that could prohibit an ill-advised reversal of government policy under a different administration.

Also, because the Accord might allow provinces to develop their own approach to achieving the goals of the Accord, the national treatment obligations in trade agreements mean that the lowest standard of treatment applies, no matter what protections other provinces have put in place. The Accord would likely expose the Canadian government to investor suits, as in the case of the current NAFTA Chapter 11 claim of $400 million by an American company, Sun Belt Water Inc, because British Columbia brought in legislation to stop water exports.

Canadians are in a unique and enviable position in the world. First, we are stewards of an enormous amount of the planet's fresh water and fresh water ecosystems. Second, almost all municipal water and wastewater systems remain within non-profit, public control. However, situated in the Northern Hemisphere, Canada's water resources are predicted to be seriously affected by climate change. As a resource rich country, much of Canadian industry is water intensive and water dependent. Instead of free trade in water, we need to move to a sustainable water management strategy based on community participation.

We must insist that water is a fundamentally different element from anything else, and that affordable public access to it is a basic human right. In Canada we will work to ensure the transfer of water recovery technologies to countries and regions in need of fresh water supplies. Also we must ensure that water is no longer wasted, polluted or ecosystems degraded and destroyed by diversions or bulk removals from Canada. We also pledge to oppose international trade agreements that continue to anticipate water as a tradable good, service or investment opportunity requiring national treatment and other trade or investment obligations to restrict its export.

i) When Free Trade Means Free Trees: Taking Trade in Forest Products Fair and Green

by Susan Casey-Lefkowitz, Natural Resources Defense Council and Geoff Quaile, Grand Council of the Crees (Eeyou Istchee)

Since 1994, the heads of governments from 34 Western Hemisphere countries have made clear commitments to combat threats to forest ecosystems. In the Summit of the Americas Action Plan, governments committed to integrate conservation and sustainable use of biodiversity in forestry. Still, national actions have fallen well short of tackling the root causes of forest destruction and its associated biodiversity loss in the Hemisphere. Indeed there is a direct connection between forests and trade and the destruction of the Crees Nation lands in Quebec, aggravated by the Softwood Lumber Agreement.

First Nations, Forests, and Trade

Across Canada, First Nations see their treaty and land rights violated so that timber companies may benefit. For example, in 1975, the Crees (and the Inuit further north) entered into a treaty with the government of the province of Quebec and the federal government of Canada. Among many issues addressed, the James Bay and Northern Quebec Agreement primarily serves as a land and environmental treaty. It recognises and safeguards the Crees long standing right to occupy their tradition lands through their traditional subsistence activities and to have a major role in other types of future economic development in the region. The agreement set an environmental protection regime to safeguard the resources necessary for a viable subsistence economy in the context of development. Respecting forestry, neither Quebec nor Canada has honoured this treaty, both governments have giving a substantial financial benefit to timber companies who are allowed to clearcut Cree lands in violation of treaty obligations.

The boreal forest extends around the northern reaches of the earth through Russia (primarily Siberia), Scandinavia, Alaska and across Canada. Canada has enormous importance as home to one-quarter of the world's boreal forest, extending from coast to coast through eight provinces. Quebec contains 10% of Canada's forested lands, the majority being boreal. According to documents submitted by Quebec in court, nearly 60% of Quebec's softwood lumber comes from the boreal forests on Crees traditional lands in the James Bay Territory of Northern Quebec (Eeyou Istchee). The average tree height and diameter of the northern black spruce forest is much less than the southern tree species such as red or white pine. In order to regain their upfront investment, logging companies typically cut as much forest as they can in the shortest time possible. An area equivalent in size to the state of Delaware has been harvested since the 1975 James Bay and Northern Quebec Agreement was signed. The typical logging pattern is that of clear-cut blocks of 150 hectares (370.5 acres) separated by 110 yard-wide buffers of trees.

Quebec's forestry practices are irreversibly damaging wildlife such as moose, marten, beaver, muskrat, and various waterfowl. Clearcuts damage habitat, forestry roads-18,000 km built since 1975-increase accessibility for hunters, and operation of heavy machinery disturbs wildlife. Forestry practices, such as lack of buffers, deposits of contaminants into waterways, interference with stream flow, and erosion are causing deterioration of water quality.

In 1998, the forestry industry in Quebec exported $10.8 billion CAN in forest products (second only to British Columbia) to the United States. This represents 87% of Quebec forest exports. Over the past five years, the amount of wood harvested in the James Bay territory has risen 45%, while the amount of Quebec exports to the U.S. has increased by approximately 30%. Trade with the United States is driving deforestation of Quebec and of Crees traditional territories.

For the past five years, the United States and Canada had a trade agreement setting mutually agreed upon tariffs on softwood coming into the United States. The United States-Canada Softwood Lumber Agreement allowed 14.7 billion board feet of timber into the United States duty free annually. Above this, duties were added on a sliding scale. The agreement covered lumber from Alberta, British Columbia, Ontario, and Quebec - the four major softwood lumber producing provinces that export to the United States. The agreement expired March 31, 2001, with no new agreement in place. Although the agreement was barely effective at counteracting Canadian government subsidies to its logging industry, the lack of any agreement at all will likely accelerate deforestation in Quebec and elsewhere in Canada.

Canada subsidizes the timber trade in various ways. Provincial governments charge timber companies artificially low logging fees that have no relation to market prices. The Canadian public has no input on this policy, which essentially gives away their precious natural resources. Various provincial governments in Canada have allowed timber companies to fraudulently characterize old growth timber as less valuable wood during the valuation process. For example, estimates of this fraud indicate a net loss to British Columbia of millions since 1993.

Furthermore, Canada helps out the timber industry with weak environmental laws. Canada, for example, does not have strong protections for endangered species. And where environmental laws do exist, Canada often does not enforce them in order to benefit the logging industry. British Columbia, for instance, has refused to require timber companies to leave a buffer of trees along small, fish-bearing streams. Instead, it allows them to clearcut up to the banks in violation of the federal Canadian Fisheries Act.

This suite of subsidies allows these companies to level sensitive old growth and wildlife habitat. If not for the subsidies, it is doubtful that these remote and ecologically precious areas would be economically viable to log. Canadian subsidies encourage over-harvesting and harmful forest practices that degrade soils, wildlife habitat, water quality, forest biodiversity, and long-run viability of ecosystems.

Principles for Trade in Forest Products

Trade in forest products, like all other types of trade, should be governed by several basic principles. If our leaders are to craft trade agreements that meet past and present commitments, they must ensure that trade agreements support, not undermine, environmental protection. Furthermore, trade agreements should not be used to weaken national or international health and environmental standards. Trade agreements should encourage environmental progress and discourage harmful environmental impacts. Finally, trade agreements should be developed and implemented through open and fully democratic procedures.

Since it is impossible to separate social issues from environmental concerns, equal consideration must be given to those people most directly affected by international trade. In the case of forest products, indigenous peoples throughout the Americas must contend with the social impacts associated with the erosion of their local forest environments. Like the Crees in northern Quebec, many indigenous peoples are often placed in direct conflict with trade agreements that are being made without their knowledge or consent. Prior to acceptance, such trade agreements must uphold existing treaty and human rights commitments to indigenous peoples at the national and international level.

Trade should support environmental sustainable forestry. Specifically, trade in forest products needs to allow environmentally-beneficial trade disciplines. Such measures CAN include: logging bans and harvest restrictions; certification and labelling schemes; procurement and usage policies; and protections against exotic pests and diseases.

Moreover, trade rules should raise the environmental bar. As in the case of Canada, weak environmental laws and weak environmental enforcement can function as economic subsidies to companies, creating an uneven playing field for trade, while harming the environment. Whether in the context of defining trade rules or opening investment, trade agreements should promote the evolution and development of best practices in environmental law implementation and enforcement.

At the very least, there should be a trade ban on forest products from illegal logging. Any hemisphere-wide trade agreement should ban any trade or transhipment made illegal under multilateral environmental agreements, particularly including the Convention on Trade in Endangered Species (CITES). Trading partners also should commit not to permit any trade or transhipment in products that are produced, extracted, harvested, or obtained in violation of domestic laws.

The way in which investment has been handled in past trade agreements threatens environmental regulations and must be addressed. Investment liberalization should not mean weaker environmental protection. The forestry sector is one of constantly emerging new environmental regulations and this future enhanced environmental protection should in no way be hindered by a trade agreement or investor-state disputes.

iii) FTAA, Labour and the Environment: There are no jobs on a dead planet!

Proponents of the FTAA would have us believe that free markets and unimpeded investment automatically bring widespread prosperity. We should remember, however, that the relatively free markets of the first decades of the industrial revolution, while they brought prosperity to a few, brought widespread poverty and abhorrent social and working conditions to the many. It was the imposition of social rules that brought relative prosperity. These were rules fought for by trade unions and citizens groups. These included rules on child labour, work hours, minimum wages, vacations, occupational health and safety, environmental conditions, etc. These are the types of rules that had to be imposed on the market to increase the well-being of the average citizen, these are the rules that are threatened by free trade agreements such as the proposed FTAA. And these are the types of rules we will require if we are to advance to sustainability.

For proponents of the FTAA, the primary indicators of social and government success are the rate of growth of GNP and the return on investment. For people who care about people, the primary indicators of success include our levels of health and literacy, the fairness of the distribution of income and wealth, the health of our ecological life support systems, and the number of us actively participating in democratic decision making. In other words, the real indicators of success are sustainability, fairness, and justice. To that end the Canadian Labour Congress has two new initiatives: a Green Job Creation Project and a Just Transition Policy. Each of these, despite their good objectives will be frustrated by free trade rules as found in the NAFTA, the WTO, and likely in the FTAA.

Green Job Creation Project

We live in an unsustainable economy that is already starting to have a devastating effect on nature and human health, well-being and employment. We have to move to a sustainable economy, sustainable communities, and a sustainable environment. When this is done, the result is Green Job Creation. Society has to move to Green Job Creation for positive reasons in their own right: green jobs are secure, stable, quality jobs which are clean, healthy and stress free. Sustainability forms the background and context for green job creation. Green jobs are jobs in a sustainable economy. For example:

The need for Just Transition for workers during environmental change is clear. Workers and communities should not bear an unfair share of the burden of change. The key point about Just Transition is continuity of income and alternative employment, with the same or a different employer.

The FTAA is another manifestation of a very profoundly disturbing trend in modern society. It represents one more step in the subsuming of the citizen in the consumer, of the subsuming of society in the economy.

Free trade agreements are not part of a modern drive to create societies that meet the needs of people. Rather, they are part of a modern drive to mould people so that they conform with that misanthropic abstraction 'the rational economic person' (in economics it remains the rational economic man). It is a mould for one-dimensional people - consumers. It is not a mould for people with a sense of and desire for fairness, justice and cooperation -citizens. And thus, in the end, it is a mould for people possessing no conception of democracy.

Fair trade on the other hand is trade that enhances sustainability, fairness, and justice. It is trade governed by rules made by citizens, by people concerned for the public good. Such trade binds economic rules to democratically determined social ends.

3 TWO: FTAA lowers environmental standards

What the rules would say: In addition to the trade system feeding on the worst aspects of comparative advantage, and being unconcerned about the distribution of the wealth created or the social and environmental damage by trade, nations are pressured to keep their standards low and their markets for imports and exports open. This is the result despite the need for caution especially respecting the import of mad cow disease and biological agents and the export of exhaustible natural resources. Under both NAFTA and the WTO agreements, countries are required to meet certain scientific burdens of proof in setting their standards and to show that laws and regulations are "necessary." Trade rules do not provide a clear right to use the precautionary principle in setting standards or to insist upon the process and production methods used to produce goods or services for market entry.

Given the history, the burdens in trade agreements a willing national government must bear to go beyond the minimum standards issued by industry led organizations such as Codex Almentarius or the International standards Organization are obviously too great. For example, the TBT covering national standard setting for widgets as well as environmental, consumer and health and safety protection, only permit governments to set higher national standards, if the standard is deemed necessary, the least trade restrictive and not applied in an arbitrary or discriminatory manner where the same conditions prevail or as a disguised restriction on international trade. Importantly as well, the TBT Agreement does not permit technical standards to make distinctions between products based on how the product was produced. For traders a can of tuna is a can of tuna no matter how many dolphins were killed in the process. This gap offends yet another environmental, animal welfare and social policy ethic to care about the process and production methods associated with the product or service.

The requirements on national governments are even more burdensome to successfully restrict imports because of food safety, animal and plant concerns. The Sanitary and Photosanitary Measures Agreement (SPS) requires that in addition to all of the above burdens, national standards must also be based on scientific evidence and a risk assessment. While the SPS Agreement permits temporary precautionary restrictions while a nation seeks further scientific information for setting national standards, the emphasis on quantifiable scientific risk management over-looks the political process to determine what is an acceptable risk to society. In effect trade rules set limits on the level of safety a country can choose. While countries can set their own levels of risk tolerance, there is a presumption in favour of minimum international standards, were they exist.

As Michelle Swenarachuk of the Canadian Environmental Law Association explains, "the absence of international scientific opinion has become the necessary precondition for environmental regulation." The absence of such a consensus can then be asserted as prima facie proof that economic protection motives must underlie a purported concern for the environment and food safety. Furthermore, by assigning the task of standard setting to international technical bodies, such as Codex Alimentarius, the prerogatives of elected and accountable institutions are greatly diminished.

Trade rules completely ignore the heated scientific as well as ethical issues associated with biotechnology and genetically engineered (GE) foods. The ineffectiveness of the current exceptions for national standard setting and the presumptions in favour of low international standards will continue to matters of great concern. Not only are these trade rules fundamentally at odds with the precautionary principle, in fact the most accurate "science-based" approach, but they attempt to exclude ethical, social and economic considerations from the equation. The precautionary principle essentially says that protective measures should be taken in the absence of scientific certainty. The most important practical feature of incorporating the precautionary principle in trade agreements is that it would reverse the burden of proof in dispute settlements.

Morag Carter, trade and environment specialist: "The precautionary principle, first identified in international agreements during the seminal Rio conference in 1992, has been used extensively in domestic legislation and multilateral environmental agreements, often to justify policy choices for which there was emerging scientific evidence of harm, but no conclusive proof. However, senior trade bureaucrats in Canada speculated in the year 2000 that the use of the precautionary principle in domestic legislation would be ultra vires (counter) to WTO rules and disciplines." The Hemispheric Social Alliance recognizes this: "The elimination of non-tariff barriers to legitimate trade should not be confused with lowering sanitary and photosanitary barriers that protect the environment".

A. Consumer's Right to Know the Process and Production Methods

Trade policy continues to resist conditioning market access and comparing with a label products based on their methods of production, including those based on genetic engineering. As Elizabeth May of the Sierra Club of Canada describes: "Canadians will find it very offensive to know that its trade delegations are leading the charge to even avoid meaningful labelling so that consumers can enjoy the right to know what is in their food." With labelling consumers can choose goods based on the production methods used to produce the product avoiding, for example, rugs produced by exploitive child labour.

Like the anticipated FTAA, the WTO TBT deals with technical assessment requirements such as certification and labelling. The traders are attempting to extend the reach of the TBT Agreement beyond government sponsored schemes of eco-labelling to cover those developed by "non-traditional bodies", including NGOs. This expansion would presumably include private environmental initiatives such as the Forest Stewardship Council, organic growers and cooperative organizations both here and in developing countries. Isn't it ironic that traders would impose duties on NGOs yet providing no rights?

Relevant FTAA Negotiating Groups

FTAA Market Access Group: Standards and Technical Barriers to Trade. The goal of this group is "to eliminate and prevent unnecessary technical barriers to trade in the FTAA."

FTAA Working Group on Agriculture (Argentina) is responsible for negotiations on market access, sanitary, phytosanitary and health application measures and other agricultural trade rules.

FTAA Working Group on Subsidies, Antidumping and Countervailing Duties (Brazil): The purpose of this group is "to achieve a common understanding with a view to improving, where possible, the rules and procedures regarding the operation and application of trade remedy laws in order to not create unjustified barriers to trade in the Hemisphere" while going beyond WTO measures if necessary.

FTAA Working Group on Competition policy (Peru). The purpose of this committee is "to guarantee that the benefits of the FTAA liberalization process not be undermined by anti-competitive business practices." The objective is: To advance towards the establishment of juridical and institutional coverage at the national, sub-regional or regional level, that proscribes the carrying out of anti-competitive business practices.

Discussion

There are three principal areas of discussion in the FTAA negotiating group on agriculture: market access, sanitary and phytosanitary measures (SPS), and subsidies and other trade distorting practices. The market access component of the negotiation will be handled primarily by the market access negotiating group. All regulations and disciplines will be arranged by market access, however, agriculture will be given the final say in decisions made about its various sectors. Moreover, it remains the discretion of the agriculture group to identify and negotiate supply-managed sectors.

The second major aim is to ensure that SPS measures are not applied in an arbitrary and discriminatory manner, nor that they are used to disguise an intentional restriction to international trade: "Consistent with the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS), said measures will only be applied to achieve the appropriate level of protection for human, animal or plant life or health, will be based on scientific principles, and will not be maintained without sufficient scientific evidence". The WTO would become the sole arbiter of legitimate prohibition, restriction, or licensing requirement on imported agricultural products.

By using such a standard, the FTAA would effectively limit the grounds under which member countries can impose trade-restrictive SPS measures to protect the environment or health and safety. The WTO standard is stricter even than that in NAFTA, requiring that an importing country bears the burden of proof in showing that an SPS measure is scientifically justified. The FTAA/WTO model shows no support for the use of the precautionary principle in making such determinations. Both the United States and Canada explicitly support increased free trade in "new agricultural technology."

According to ART, the U.S. tends to use sanitary and phytosanitary (SPS) inspections to reject about a third of all Latin American agricultural exports inspected. Those standards of quantified risk assessment can be met by few exporters in countries whose SPS budgets have been crippled by Structural Adjustment Program-mandated reductions in government budgets, including SPS infrastructure.

The third leading point of discussion involves the elimination of agricultural export subsidies affecting trade throughout the hemisphere. This is a most sensitive issue. Developed nations use subsidies to support the domestic farm industry, while developing nations tend to use tariffs to support theirs (their creditors would probably not let them use direct support even if they could). In addition to subsidies, the negotiation group is to identify all other trade-distorting practices and work to bring them under tighter discipline. This includes ensuring that programs such as state trading, domestic support, and food aid do not become a substitute for export subsidies.

B. Threats to the Family Farm and Food Security

"Agri-business", the practise of growing food for export and profit, has come to replace traditional farming practices. Massive, corporately owned "cropping monocultures" are overrunning family farms, which are dependent on chemical fertilizers, agrochemicals, and genetically engineered seeds. The FTAA promotes this type of farming, especially in Latin America, where most of the farming population (more than 20% of the total population) is small farmers, threatening the family farm and food security.

C. Food Standards and Genetic Engineering

Of considerable debate is the issue of genetically engineered foods and seeds (GE). Restrictions based on public health and global environmental concerns are seen as offending the WTO SPS Agreement and a technical barrier to trade. But attempts to impose the WTO lowest common harmonized standards is a particularly sensitive issue with Europe and the South tending to adhere to the precautionary principle when discussing GEs and food standards in general.

It is no surprise that the Miami Group, including Canada, the US, Argentina and Chile hope that the FTAA will provide for better market access in GE foods and seeds, benefiting the interests of TNCs at the expense of the poor and environmental protection. It was this group that tried to derail the successful International Biosafety Protocol to the Convention on Biodiversity established in Montreal January 2000 to restrict the transboundary movement of GE products.

i) The Tomato Story

Tomasita the Tomato By Deborah Barndt, Environmental Studies, York University, Toronto

The story of Tomasita the tomato begins in Mexico on land acquired by US-based agribusinesses when structural adjustment reforms facilitated the take-over of indigenous land by multinational corporations. Indigenous women who once worked the land communally for subsistence are now salaried workers in cash crop production for an agro-export economy.

In globalized food production, the production process jumps back and across the borders. The story perhaps more accurately begins in Davis, California, where transnational corporation Calgene has developed a hybrid seed from a Mexican strain of tomato. Biogenetic intervention has brought us the more packable square tomato, one that will travel over time and space, and ripen after arrival at markets.

Then the story moves to St. Louis, Missouri, where the Monsanto Corporation produces the pesticides used to fumigate the Mexican plantations. And finally, the hazardous waste from the pesticides production is dumped in the world's largest landfill in Emelle, Albama, an African American community facing environmental injustice. Not coincidentally, women workers in these same regions of the US have lost their jobs due to plants closing and moving to Mexico. At the same time there has been a burgeoning influx of Mexican migrant workers who have come north to work as seasonal labourers harvesting tomatoes.

Back in Mexico, farm workers are paid $2.40 a day to work the fields. With no gloves or masks, and no access to health care, they have little protection from the pesticides. The practice of mono-agriculture and use of genetic seeds also threaten environmental protection. When the tomatoes are harvested, they're packaged in plastic and cardboard, and transported to northern markets. It is unlikely that women who have produced these tomatoes will consume them, they are exported for or canned in the low-pay maquilas, or free trade zones, to generate foreign exchange to pay off debts.

Whether shipped in cans or packed in ozone depleting refrigerated trucks emitting greenhouse gases, Mexican tomatoes make their way to the markets of Toronto. Tomasita the tomato may end up in a fast food burger, squashed between Central American beef and lettuce imported from California. Women, especially young women make up the greatest portion of the workforce in fast food restaurants. As women and consumers, women also find themselves buying fast food and thus imported tomatoes, for themselves and their children, in response to a variety of pressures including time and cost.

C. The FTAA and the Threat to Animal Welfare

Founded in Canada in 1969, the International Fund for Animal Welfare (IFAW) is now one of the largest animal welfare organizations in the world, with offices in 12 countries. IFAW works to improve the welfare of wild and domestic animals throughout the world by reducing commercial exploitation of animals, protecting wildlife habitats, and assisting animals in distress. IFAW seeks to motivate the public to prevent cruelty to animals and to promote animal welfare and conservation policies that advance the well being of both animals and people.

IFAW is determined that liberalized trade regimes, such as the FTAA, should not erode existing protections for animals, nor impede the formulation of new protections. In their present form, however, the FTAA and other trade agreements pose an enormous threat to animals and animal habitats worldwide..18

GATT, WTO & NAFTA rulings that have impacted on Animal Welfare

The FTAA is continuing a trend whereby the legitimacy of current and future legislation that seeks to protect animals and the environment is questionable in the context of free trade. To date, free trade under the auspices of GATT, the WTO and NAFTA has had a devastating impact on animal and environmental protection legislation. Whenever a nation has challenged an animal protection regulation, the relevant authority has ruled that regulation to be an illegal trade barrier. The nation that has enacted the offending rules must either change its law or pay a heavy financial penalty. Most of these animal welfare issues affected by free trade relate to the method of production (the processes by which animals are raised, trapped, transported etc.), the so-called production and process methods (PPMs). In the eyes of the WTO, dolphin friendly tuna is indistinguishable from tuna caught by encircling dolphins, and, shrimp caught by boats with turtle excluder devices is the same as shrimp caught without turtle conservation methods. There are many examples ranging from the use of hormones in cattle to cosmetic testing on animals, all with a common thread: animal welfare sacrificed in the name of free trade.

Despite the WTO ruling in the Beef Hormone dispute above, the EU to its credit continues to ban hormone treated beef. The US therefore has been authorized to apply retaliatory trade measures to EU imports. For nearly a decade now, the EU has paid a costly economic price to maintain precautionary health safeguards for its citizens.

STEEL JAW LEGHOLD TRAPS

The EU banned the use of the steel-jaw leghold trap in 1995. The United States and other fur-exporting countries were given notice that as of January 1, 1996, furs and fur products from thirteen commonly trapped species would not be accepted for import into the EU unless the exporting country had banned the use of steel-jaw leghold traps or adopted internationally agreed-upon humane trapping methods. The US and Canada, pressured by local commercial interests, threatened a WTO challenge to the EU ban if it was implemented against imports. As the EU did not believe it could successfully defend the ban against a WTO challenge, it considerably weakened the effect of its ban. The EU then tried to negotiate humane trapping standards with the US and Canada. However, the final agreement allowed, for the foreseeable future, the import of fur caught with steel-jaw leghold traps. This is yet another example of how commercial interests have used the WTO to undermine legitimate environmental and animal protection legislation.

DRIFTNET FISHING

In December 1991, the United Nations General Assembly passed a resolution calling for a global moratorium on all high-seas driftnet fishing in the world's oceans. To implement this resolution, the US enacted the 1992 High Seas Driftnet Fisheries Enforcement Act, which, among other things, prohibits the import of fish from countries that continue to illegally driftnet. As a result of the US Driftnet Act, several countries ceased high-seas driftnet fishing. Italy, however, did not, and as of 1998 still had nearly 600 driftnet vessels on the high seas. However, Italy continues to export fish into the US. The WTO dispute resolution rules, and the subsequent environmental losses as a result of WTO panel rulings, have all had a chilling effect -- in this case, on the enforcement of US environmental and animal protection legislation. Despite nearly a decade of persistent urging by animal and environmental advocates, two lawsuits, and the fact that the United Nations calls annually for the cessation of high seas driftnet fishing, the US has yet to actively enforce the Driftnet Act.

EGG LABELLING

In 1992, the European Commission, fearing a WTO challenge, dropped a proposal to require mandatory labelling of all eggs on the basis of animal welfare criteria. More recently, the European Commission put forward a proposal to modify the conditions in which laying hens are kept in the EU, in particular by increasing the size of cage space for each hen. The proposal recognizes that these improvements in animal welfare will result in higher costs, which will make EU eggs more expensive than eggs from other countries where animal welfare standards are lower. Unfortunately, the WTO does not allow distinction among products based upon methods of production, and forbids the use of trade barriers that favour domestic industry. Thus, the net result of this proposed legislation will be local "humane" egg producers losing market share to foreign "inhumane" egg producers..19

PUPPY MILLS

Canada enacted legislation with the intention of protecting consumers from purchasing US bred puppies with congenital defects. The US puppy mill industry challenged the legislation under NAFTA, which led to a compromise on Canada's part, whereby shipments of puppies into Canada would be checked for signs of health problems at the border. If any animals showed signs of illness the entire load would be denied entry. Unfortunately the compromise kneecapped the original intent of the legislation as most congenital defects only manifest themselves at later stages in the animal's life, and will not be picked up by a cursory border inspection.

COSMETIC TESTING

In response to public demand, EU legislation was adopted in 1993 to prevent the use of animals in cosmetic testing from 1998 onwards. However because the measure was thought to be incompatible with the WTO, it was not implemented. On April 3, 2001, the European Parliament voted to ban sales of all new cosmetic products tested on animals. Pending approval from the 15 European Union member nations, the legislation would immediately prohibit animal tested cosmetics for which alternative testing exists. By January 2005, the ban also would apply to all new cosmetics using animal-tested ingredients, even if alternative tests have not been developed. The ban also would apply to imported products. While this legislation is welcomed, it is a greatly diluted version of the original proposal adopted in 1993 by the EU. This weakened legislation is due entirely to the WTO.

The FTAA's Potential Impact on Animal Welfare

Given that the FTAA, as currently proposed, contains many of the same provisions as the above-mentioned free trade regimes, this Agreement has the potential to undermine all existing national animal protection legislation in the Hemisphere, and impede the adoption of further protections. For example, Canadian laws that deal with animals and the environment are potential casualties if Canada joins the FTAA. The Species at Risk Act (SARA), currently under consideration by the Canadian government, appears to be in the process of being weakened by the Department of Foreign Affairs and International Trade (DFAIT) to ensure it's compliance with the WTO before it has even been enacted. The FTAA will present even more stringent compliance problems. As further examples, The Meat Inspection Act and The Health of Animals Act deal with the design and condition of slaughterhouses; slaughter procedures; goads and electrical prods and their usage; care of animals prior to slaughter; export, import and transportation of animals that are infirm, ill, injured or fatigued; food, water, rest and care during transport etc. Many aspects of these two Acts that deal with the humane care of farm animals can be challenged under the FTAA as barriers to trade. IFAW is not opposed to trade, however trade at the expense of animal and environmental legislation and standards is unacceptable. The FTAA in its existing form presents a very real threat both to existing and future animal and environment protection legislation and efforts. Consequently an extensive reworking of this agreement is in order, with a primary focus on harmonizing it with existing national legislation that strives to protect animals, the environment and people from harm. The public places a high priority on the proper treatment of animals and the FTAA should reflect this priority.

4 THREE: FTAA trade rules are Enforceable, MEA's are not

The third green reason to oppose the FTAA concerns the stark imbalance in the political energy to negotiate and implement regional and multilateral environmental agreements (MEA), compared to that of trade and investment agreements. Trade agreement have all the tools of enforcement, international agreements to protect human rights, labour standards and the environment do not. Trade rules not only tend to undermine the enforcement of MEAs but also to undercut their underlying goals and objectives.

It is generally agreed that the relationship between international trade rules and MEAs ought to be mutually supportive. In practice, however, the two regimes often contain incompatible provisions and avoiding clashes remains a controversial ad hoc task. Often regarded as emblematic of the trade-environment debate, the 1991 GATT Tuna-Dolphin Dispute was the first to test the legitimacy of using environmentally-unfavourable process and production methods (PPMs) as justification for trade restrictions. The case revolved around a US embargo on Mexican tuna caught using purse-seine nets that incidentally trapped a high number of dolphins.

Because of the similarities between Tuna-Dolphin, Shrimp-Turtle and now Chilean Swordfish the cases need to be understood together. What is remarkable about the Swordfish dispute, however, is it pits a regional conservation agreement in the Americas against the trade claims of the northern European fishing fleets. The roles and interests of the players are in fact reversed from the Tuna-Dolphin dispute!

US- Restrictions on Imports of Tuna, 1991, GATT (now the WTO)

In addition to undermining MEA enforcement tools, undisciplined free trade also undercuts MEA goals and objectives. For example, current trade rules do not address the issue of traditional/indigenous knowledge. Civil society organizations from the south and north have demanded the primacy of the Convention on Biological Diversity (CBD) over other Intellectual Property Regimes (IRP). The CBD gives national states sovereign rights over their biological resources and allows the protection of indigenous knowledge and rights. Intellectual property rights give TNCs with a patent in one country the monopoly marketing rights to the item throughout the region. Moreover, companies are encouraged to "bioprospect" and lock down patents for traditional medicines that are considered "traditional knowledge," effectively robbing indigenous people of their cultural heritage to fatten corporate wallets.

What the rules would say: In comparison to the WTO TRIPS agreement, the U.S. FTAA proposal would narrow the categories or products for which a country may decide not to issue patents, undercutting the goals of the CBD, for example. According to ART the U.S. proposal does not include a provision permitting countries not to provide patents on plants or animals. Rather the US supports a strict standard in the FTAA of "serious prejudice" to life or health before a country is able to refuse patentability or revoke a patent. There is no statement that refusing a patent can be done to implement CBD obligations or to protect the environment, human, plant or animal life or health.

Relevant FTAA Working Groups

There are no provisions to deal with the relationship between an FTAA and regional or multilateral environmental agreement. The trade rules around market access, the process and production methods of products as well as the current design of intellectual property rights continue to represent fundamentally good green reasons to oppose the FTAA. See Reason # One above.

FTAA Working Group on Intellectual Property Rights (Venezuela). According to the FTAA, the purpose of this group is "to reduce distortions in trade in the Hemisphere and promote and ensure adequate and effective protection to intellectual property rights"..21

In contrast, the Hemispheric Social Alliance in its "Alternatives for the Americas" document states that in the event of a conflict, internationally recognized human, labour and environmental rights must take precedence over trade rules. For example the ILO Convention 169 ensures the inalienable right of peoples to full autonomy over their traditional habitat and biodiversity.

A. What the evidence shows: Trade Rules Undermine MEA enforcement

In what many observers believe could become an important trade- environment dispute, the EU recently filed a complaint at the WTO over Chile's bans on access to its ports to foreign fishing vessels catching swordfish inside and outside its 200-mile exclusive economic zone. The case demonstrates the continuing lack of balance between trade rules and effective conservation and management of natural resources.

EU vs. Chile - conflict over threatened swordfish

According to Chilean authorities, the 1991 landing and import bans under their fisheries law are needed to conserve threatened migratory swordfish stocks and their spawning grounds. Since 1952 members of the Permanent Commission for the South Pacific - Colombia, Ecuador, Peru and Chile -have taken the lead in regulating the 200 mile Exclusive Economic Zone from their coasts. In 1999 members reached a regional MEA - THE GALAPAGOS AGREEMENT - to enable the enactment of conservation measures for marine living resources in the high seas, including highly migratory species.

Chile has responded to the EU complaint that these measures are permitted under general trade exceptions allowing WTO members to adopt and enforce measures "necessary to protect human, animal or plant life or health" or "relating to the conservation of exhaustible natural resources". The measures include regulating the gear, catch size and number of fishing permits, mostly issued in favour of artisanal fishers.

Despite the conservation effort, the EU insists upon its trade rights to pry open the Chilean ports in light of GATT's Article V (Freedom of Transit) that seeks to guarantee the free transit of goods and vessels when the "passage across (other member's) territory is only a portion of a complete journey beginning and terminating beyond the frontier (of the transit territory). Chilean measures render also impossible the importation of the affected catches into Chile. EU mainly Spanish vessels in international waters capture swordfish, unload in Chilean ports either for warehousing or to tranship them onto other vessels for export to the U.S. market.

In turn, Chile has requested a formal specialised arbitration at the International Court of Justice under the UN Convention on the Law of the Sea (UNCLOS). The controversy opens a complex debate over the applicable law regarding port access. The International Court of Justice in the 1986 Nicaragua case noted that it is "by virtue of its sovereignty that the coastal state may regulate access to its ports". Thus there will be at least two jurisdictional fora hearing the case in parallel, increasing the risk of contradictory and incompatible results. In this context, the head of trade policy in the Chilean Ministry of Foreign Affairs' WTO Department remarked, "even the EU's internal legislation says that when there is a clash between trade and environmental legislation they are required to privilege environment over trade. They are violating their own laws."

Chile-Measures Affecting the Transit and Importation of Swordfish, WTO, 2000.

The case is all the more compelling as this is the first time at the WTO where a developed party will be questioning the trade effects of an environmental law taken as a precaution by a developing member. Will the Galapagos Agreement setting out the process and production methods provide a legitimate basis for discriminating against illegal and unregulated fisheries operating in the high seas to catch straddling stocks near coastal waters? The EU complaint seems to also highlight the lack of swordfish conservation laws in the US similar to those in Chile. Australia, Canada, Ecuador, India, New Zealand, Norway, Iceland and the US reserved their third-party rights. Is the Canadian government supporting Chile or the EU in this dispute?

The biggest losers in this dispute are of course the swordfish, the marine turtles, the sharks and other threatened species by-caught and discarded, as well as the local fishers dependent on fish protein for food security and livelihoods. Compare the results of the Tuna Dolphin and Unprocessed Salmon and Herring case above to predict the likely outcome of this trade dispute.

shrimp and sea turtles

The WTO ruled against the legitimacy of a partial U.S. import ban under the US Endangered Species Act on shrimp caught in the wild in countries with-out sea turtle conservation measures. The Act required the U.S. government to certify that all shrimp imported to the country were caught with methods that protected marine turtles from incidental drowning in shrimp trawling nets. Under the Act, shrimp-importing countries with sea turtles in their waters must demonstrate that mechanically-harvested marine shrimp are caught by means that allow sea turtles to escape as efficiently as the turtle excluder devices (TEDs) mandatory on all U.S. shrimp nets. According to the National Marine Fisheries Service of the U.S. Department of Commerce, proper use of TEDs reduces the number of turtles caught in shrimp nets by some 90%. Farm-harvested shrimp or shrimp caught by annually-hauled nets may be imported without restrictions. While the law applied to all countries, its enforce-ment was first (in 1993) limited to the Atlantic coasts of 14 Caribbean and Western Atlantic countries.

Also in 1996 some 40 nations concluded an agreement on the Inter-American Convention for the Protection and Conservation of Sea Turtles (twenty-four countries participated in at least some of the negotiations). The United States signed the treaty, which prohibited the use of WTO-inconsistent trade measures but according to the U.S. State Department; the agreement required the use of TEDs on virtually all shrimp trawling vessels operating in the Western Hemisphere.

Despite the regional environmental agreement, non-parties mostly Asian brought a successful trade complaint at the WTO centering on the US application of a unilateral trade measure, involving the extension of domestic laws and standards beyond national borders (extra-territoriality) to the global commons. In addition, WTO rules again did not allow discrimination on the basis of the methods of production. According to the traders, shrimp caught that kills sea turtles is the same product as shrimp that does not!

United States Import prohibition of certain shrimp and shrimp products, WTO, 1999

Compare the enforcement tools in trade agreements with the experience under MEAs.

C. Trade Rules Undercut MEA Goals and Objectives

i) Climate Change, Trade and A fatal Addiction to Energy

by Yuill Herbert, Sierra Youth Coalition

Under the sunny skies of Miami, representatives of 34 nations resolved 'To Promote Prosperity Through Economic Integration and Free Trade' and 'To Guarantee Sustainable Development and Conserve Our Natural Environment for Future Generations'. The fact that these two notions are mutually exclusive seems unlikely to have crossed their mind.

In 1994, the United Nations Framework Convention on Climate Change entered into force. 175 nations have committed to the treaty except for the US, responsible for 25 percent of greenhouse gas emissions. The ultimate objective of this [treaty]... "is to achieve... stabilization of greenhouse gas (ghg) concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system'.

The January, 2001 the third assessment report was released by the Intergovernmental Panel on Climate Change showing the global average surface temperature has increased over the 20th century by about 0.6oC and global-average sea level rose between 0.1 and 0.2 metres during the 20th century. Dramatic changes are occurring to the climate with implications for life on the planet. By 2100, carbon cycle models project atmospheric CO2 concentrations of 540 to 970 ppm (90 to 250% above the concentration of 280 ppm in 1750). Because of these dramatic changes, scientists are calling for 50 to 60 percent reductions in ghg by 2010 to stabilize the climate.

Increasing consumption of energy to further trade

There is nearly consensus amongst economists that trade will be one of the major factors driving economic growth in the 21st century. As the governments stated in Miami, "A key to prosperity is trade without barriers, without subsidies, without unfair practices, and with an increasing stream of productive investments. Eliminating impediments to market access for goods and services among our countries will foster our economic growth."

A free trade area that spans the Americas means that instead of serving the populations of each country, companies will serve the population of a hemisphere. Under FTAA, the promise is that goods and services will be cheaper, allowing people to purchase larger quantities of goods and services thus resulting in economic growth. The main reason for the cheap goods and that trade will result in an increase in economic growth is because environmental and social costs are not included.

For example, the production of ghg is free. Companies can spew CO2 into the atmosphere at will, without any impact on their bottom line. Despite the cost that increasing concentrations of ghg are imposing on society, costs which Munich Re, the German re-insurers company has estimated will be $300 billion by the year 2050, the market and the majority of economists continues to turn a blind eye. Today's economic growth is fundamentally dependent, albeit to a progressively lesser degree, on energy, energy which is primarily derived from exhaustible fossil fuels. Economic growth means increased production and consumption levels, which in turn leads to more factories, (albeit more efficient ones), more cars, people with more goods. All of the 'stuff' that is produced has an energy cost and consequently a climate cost.

A fatal addiction

Trade is addicted to transportation. And unlike other addictions, trade ceases to exist without its fix of trucks, planes, trains and boats. In Canada, transportation is the single largest source of ghg, accounting for 25 percent of the total emissions. Natural Resources Canada projects emissions from the transport sector to increase dramatically, exceeding 1990 levels by 32 per cent in 2010 and 53 per cent by 2020, if current trends continue..24

When a transport plane or ship picks up its cargo in one country and drops it off in another, the resulting emissions are neither the responsibility of country of departure nor the responsibility of the country of arrival. In fact under international rules, neither country has to include these emissions in their national calculations. This is the tragedy of the commons on the grandest scale. If the balance sheet of trade reflected real energy and climate change costs of transportation, countries would be looking to other means to achieve economic growth, as it would be apparent that shipping vegetables from California to Ottawa is not cost effective. As the climate cost of trade is not considered by policy makers, they assume that trade can increase infinitely while the global environment can be improved.

The example of agriculture

In one of its released positions on the FTAA, Canada has proposed the elimination of export subsidies in agriculture as soon as possible. Such a proposal would increase national specialization of food production, as countries will concentrate on those items which can be grown most efficiently in the current economic system. The globalization of food production and trade in agriculture proves even more problematic than trade in general. Agricultural commodities are not only transported long distances, but they must be processed and packaged to survive the journey. In addition to sacrificing quality and variety for durability, this system of agricultural trade requires enormous inputs of energy and will substantially increase consumption and use of fossil fuels. As a result, when account is taken of the energy inputs that support modern agricultural production (just as one example, nearly 50 per cent of all consumer packaging is used for food products), agriculture is probably the world's biggest business, and in North America has historically used more energy and consumed more fossil fuel than any other industrial sector. It is clear then that by encouraging global food production, current trade policies will actually increase the energy demands of agricultural production and trade.

Cementing energy consumption into trade law

NAFTA, which is generally considered the blue print for the FTAA, creates a structure that assures this increasing demand for energy is satisfied, irrespective of national and local ecological limits. The proportional sharing provision of NAFTA entitles the US to an on-going share of Canadian energy resources in perpetuity, or until those resources are entirely exhausted. Further, NAFTA exempts government subsidies for oil and gas exploration and development from trade challenge and prevents countries from imposing energy prices on North American exports that are higher than domestic prices. If trade is fatally addicted to transport, transport is addicted to fossil fuels, and the government is promoting increased trade, the consequence is an inevitable increase in the rate of production of greenhouse gases, that remains completely unaccountable. On one hand, the government is committed to meeting the Kyoto target of ghg emissions, while the other hand calls for increased trade, thus severely impeding its ability to address climate change. To reiterate, the logic is simple:

The FTAA equals increased trade

And: increased trade equals increased production and increased transportation;
And: increased transportation and increased production equals increased fossil fuel consumption;
And: increased fossil fuel consumption equals increased climate change;
And: Canada has agreed to reduce emissions by 6 percent of 1990 levels by 2010;
And: Canada will be 20 percent above 1990 levels by the year 2010;
And: Scientists are calling for fifty to sixty percent reductions by 2010 simply to stabilize the climate
Therefore: In order to address the global climate crisis, Canada needs to limit trade, encourage local production and pull out of FTAA negotiations.

5 FOUR: FTAA Investor Rights Pay the Polluter

A. Free Trade in Investment

Current NAFTA investor protection rights undermine the sovereign right of nations to take proactive measures to ensure that investment serves national development and environmental sustainability goals. The thrust of these policies is to elevate the rights of investors above other interests, with the ultimate goal of facilitating capital movement.

The U.S. position within the FTAA Investment group is to promote obligating FTAA countries to "strive to ensure that environmental and labour laws are not relaxed to attract an investment." This position expands the scope of a similar provision in NAFTA Chapter 11, which covers environmental and domestic health laws, but not labour laws. But according to ART, it appears that the USTR is not proposing that there be any type of enforcement mechanism for this provision and is not even asking FTAA countries to ensure that these laws will not be relaxed but only to "strive to ensure."

Moreover, this type of provision would be virtually meaningless in countries where environmental and labour laws are already weak. It also does nothing to strengthen enforcement of existing labour and environmental standards or to promote a lifting of these standards across the Americas. Again according to ART, the United States has not adopted a clear position in favour of deference to environmental and public health laws similar to the general exceptions listed in the GATT. While GATT Article XX itself is inadequate, the lack of any such across-the-board exceptions for environmental protection in the investment proposal is extremely troubling.

i) Investor-State Disputes

by Steven Shrybman, Sa k, Goldblatt and Mitchell, Ottawa

The investment Chapter of NAFTA includes enforcement procedures that are in many ways more powerful than any enforcement mechanism ever built into the framework on an international trade agreement. Because foreign investors, i.e. corporations, have the right to invoke these procedures directly - NAFTA investor-state suits have emerged as a powerful new tool to attack environmental and conservation measures that stand in the way of greater corporate profits.

Under these rules foreign corporations can sue NAFTA governments for damages to enforce the exclusive rights the treaty accords them. In most cases these broad investor "rights" have no domestic analogue, and could not be enforced before national courts. Moreover, when claims are made, they are determined by a secretive international arbitral tribunals, which operate entirely outside the framework of domestic law, courts, or constitutional guarantees of fairness, due process, fundamental justice, and equality.

But notwithstanding these profound implications for a democratic society, until efforts to negotiate the Multilateral Agreement on Investment (the MAI) drew public attention to NAFTA and similar investment treaties, few outside of an inner cadre of trade officials and corporate lawyers had any understanding of these international agreements. Indeed, even federal Liberal MPs have described the government's approach to negotiating these treaties as one of "stealth." While efforts to establish the MAI were turned back by public opposition, the prototype for that treaty remains firmly entrenched in the NAFTA and may now be expanded if the FTAA initiative proceeds.

What is Wrong with NAFTA Investor-State Procedures?

By allowing countless foreign investors to invoke international binding arbitration to enforce expansive investment rights, NAFTA and other investment treaties represent a dramatic departure from the norms of international law in two important ways. First, by giving corporations the right to directly enforce an inter-national treaty to which they are neither party nor under which they have any obligations - i.e. rights, but no responsibility. Second, foreign investors may invoke private and secretive international commercial arbitration processes to determine claims that involve important issues of public policy and law - i.e. to use private procedures to resolve public disputes.

The result has placed a coercive international enforcement regime at the disposal of countless foreign investors who may use it freely to challenge public policies and laws they oppose. Not surprisingly a growing number of foreign corporations are taking advantage of this opportunity to claim substantial damages from governments that have allegedly failed to respect the constraints imposed on their authority by NAFTA rules. The targets of these claims have included water export controls, fuel additive regulations, hazardous waste export controls, and most recently public services. Often, just the threat of litigation is sufficient to warn governments off regulatory initiatives such as requiring plain packaging of cigarettes, or sustaining a ban on the use of a neurotoxic fuel additive.

The first arbitral awards favouring foreign investors have been made against Mexico and Canada. Both cases involved US hazardous waste companies. In the Metalclad case, Mexico was ordered to pay more than $US 16 million because a small municipality refused to issue a construction permit to a US company wanting to establish a hazardous waste treatment facility on land already seriously contaminated by toxic wastes.

That decision has now been appealed to the British Columbia Supreme Court. Because that case has far reaching implications of the regulation of environmental services, from waste management to water, by provincial, state and local governments, the Canadian Union of Public Employees sought intervenor standing before the BC Court. Unfortunately the court said no to CUPE's application rejecting a critical opportunity to acknowledge the broad public interest that exists in such proceedings.

In the SD Myers case, Canada has been found in breach of its obligations under NAFTA by refusing to allow PCB exports to the US for a brief period in the mid 1990s, even though importing PCBs was illegal under US environmental law and notwithstanding Canada's obligations under the Basel Convention to minimize the export of such wastes. The company is claiming more than $US 10 million US in damages, which have yet to be assessed. Canadian courts have now been asked to set aside both of these awards.

In a testament to just how oblivious these tribunals are to any non-commercial reality, in both SD Myers and Metalclad, the tribunals concluded the issues before them weren't really environmental after all. This refusal to acknowledge even hazardous waste management as an environmental issue is reminiscent of Canadian and US denials during the free trade debate of the 1980's that the environment had even come up during the negotiations.

This award too has been appealed. In this case, by Canada to the Federal Court of Appeal, but on much narrower grounds than Mexico's Appeal. Moreover, when the Sierra Club of Canada, Greenpeace, and the Council of Canadians argued for standing in the Federal Court - not only did our government refuse to support the intervention, as Mexico had done in CUPE's case, but actually argued against a consideration of most the issues the groups wanted to raise.

The US has also felt the sting of this mechanism in several cases. The most important being a challenge by Canada based Methanex Corporation to a ban on the use of a fuel additive by the State of California. That claim seeks damages of almost $1US billion, and is only now in progress.

B. Free Trade in Services

The mandate of the FTAA Negotiating Group on Services is meant to be compatible with the General Agreement on Trade in Services (GATS) - the WTO services negotiations now in progress. The common goal of Europe, the U.S. and Canada is to reach a general WTO agreement by December 2002.

As Scott Sinclair of the Canadian Centre for Policy Alternatives explains: "Essentially, the GATS is mandated to restrict government actions in regards to services through a set of legally binding constraints backed up by WTO-enforced trade sanctions". Its most fundamental purpose is to constrain all levels of government in their delivery of services and to facilitate access to government contracts by TNCs in a multitude of areas, including energy, water.27 services, and environmental protection services. Will developing countries see potential in providing environmental services such as carbon sinks, eco-tourism and biodiversity conservation to address the ecological debt owed by the north?

The FTAA services agreement could even more sweeping than the GATS. As well as incorporating "comprehensive rights and obligations," it will apply to "all measures [defined by Canada as 'laws, rules, and other official regulatory acts'] affecting trade in services taken by governmental authorities at all levels of government." As well, it is intended to apply to "all measures affecting trade in services taken by non-governmental institutions at all levels of government when acting under powers conferred to them by government authorities." This scope purports to cover eco-labelling by NGOs.

According to ART, while the USTR position pays lip service to not having the FTAA negotiations promote privatization of social services-including education and health care services-it does not propose to carve out these services. Instead it relies on the deeply flawed exemption for government services in GATS. This exemption only applies when a service "is supplied neither on a commercial basis, nor in competition with one or more service suppliers." But many government services include fees, such as park entry fees, which could fall under the "commercial basis" prohibition. Also almost no government service is provided as an exclusive monopoly so there is competition with other service suppliers. Combined with proposed local coverage, this provision would leave all local, provincial and federal laws pertaining to public and private services vulnerable to corporate challenges by the service providers as well as their investors.

The USTR proposal includes energy services, which are excluded from the NAFTA services chapter. In the GATS context, the USTR goal is: "To realize fully the benefits of an efficient, competitive energy sector, we need to consider the entire chain of activities involved in resource identification, preparation/production and conversion, transmission and transportation and distribution, sales and marketing (both wholesale and retail), and information management." This expansive definition of energy services could have serious environmental implications.

Relevant FTAA Working Groups

FTAA Working Group on Investment (Costa Rica) objective is: "To establish a fair and transparent legal framework to promotes investment through the creation of a stable and predictable environment that protects the investor, his investment and related flows, without creating obstacles to investments from outside the hemisphere". The FTAA Negotiating Group on Services (Nicaragua) is to "establish disciplines to progressively liberalize trade in services under conditions of certainty and transparency." It has requested the organization of national inventories of measures affecting/ inhibiting the free trade in services. FTAA Working Group on Government Procurement (United States of America): As of July 2000, in the Americas, only the US and Canada have signed the WTO Agreement.

ii ) Case Study on Free Trade in Services and Hazardous Waste

"...Trade agreements impose constraints on the ability of governments to act freely. In the interest of promoting free trade, and thereby enhancing prosperity and economic choice, trade agreements limit the ability of governments to make certain decisions. Concerns have been expressed from many quarters - various advocacy groups, academic commentators, even governments - about the extent to which NAFTA already tips the balance too heavily in favour of freer trade and against the ability of governments to regulate in the public interest."

(Dr. Brian Schwartz, Concurring Separate Opinion, SD Myers vs. Government of Canada, November 2000, Paras 10-11)

The GATS/FTAA model focuses on discipling the process and substance of government regulation, including second-guessing whether it is necessary, that is "not more burdensome (on trade) than necessary to ensure the quality of the service". "Quality of service" should be understood relatively narrowly, i.e., the reliability, accuracy and safety (to the consumer) with which the service product performs its intended function. It seems unlikely that a dispute panel would interpret the term broadly to include upstream, downstream or other quality considerations such as protection of environmental quality. To do so would likely be seen as reintroducing the very kind of broader social policy considerations traders intend to exclude.

As in the case of goods, free trade in services would presume the necessity of regulation if in conformity with international standards and provided other member's "equivalent" standards are accepted. Absent provision otherwise, the necessity for the governmental measure, the adequacy of whatever due notice and process was afforded, and the rationale for deviations from international standards or for determinations of non-equivalency would all be "disputable", i.e., arbitrable by trade panels.

For example a hazardous waste shipper could successfully challenge regulations aimed at:

Most of these examples are already regulated by established and ratified multilateral environmental agreements. But as the new regime has demonstrated, MEAs are vulnerable to being undermined by panels convened by the dispute settlement mechanisms in trade agreements. Any of these examples could been deemed by trade tribunals to be more burdensome than necessary, thus "nullifying or impairing" the benefit of the services national treatment obligation. Another example is a gasoline retailer challenging a local or federal MTBE ban - a toxic gas additive -on its "necessity" given alternative, albeit perhaps more expensive, methods to protect groundwater.

In addition to national treatment and necessity, free trade in services focuses on discipling "market access". The domestic market is one of the four markets defined by GATS and presumably the FTAA, to which "market access" disciplines apply. The "market access" disciplines are absolute and quantitatively oriented: governments may not, for example, limit the number of service suppliers by quota, monopoly or exclusive service rights; limit the number of service operations or the quantity of service output by quota; or limit the number of employees in a sector or needed by a service supplier by quota.

Given this reading, domestic regulations that effectively limit the number of hazardous waste sites or treatment providers in a market or community would be inconsistent with service market access obligations.

- are all open to trade and investment disputes.

Can you trust governments and corporations to protect the PUBLIC INTEREST in these forums?

6 FIVE: FTAA removes public participation and democracy

What the rules would say: At the 1996 Bolivia Summit on Sustainable Development governments "strongly supported the full integration of civil society into the design and implementation of sustainable development policies and programs at the hemispheric and national levels". Governments conferred responsibility on the OAS Unit for Sustainable Development to formulate a strategy but left it with no resources and no momentum. Instead the traders offered a FTAA Committee of Government Representatives on Civil Society that turned out to be little more than an electronic mail box.

We know that the NAFTA is as much an investment agreement as it is a trade liberalization agreement. We have the experience under NAFTA Chapter 11 with investor-state dispute settlement behind closed doors that assault environmental and public health laws. And despite the unified voice of Canadians opposed to these investment protection rules in the absence of investor responsibility, the Canadian government continues to seek strong investor protection provisions in an FTAA, despite its vague public comments to the contrary.

Relevant FTAA Working Group

The FTAA Dispute Settlement Group (Chile) is: "to establish a fair, transparent and effective mechanism for dispute settlement among FTAA countries and "to design ways to facilitate and promote the use of arbitration and other alternative dispute settlement mechanisms, to solve private trade controversies in the framework of the FTAA". ART advocates for provision to allow public complaints to be brought against private parties who are responsible for substantive rights violation. Currently Multinational firms that are implicated in violations of the labour rights provisions under the NAFTA labour side agreement, for example, do not even bother to appear at the hearings because it is not possible for them to be held responsible. This is a crucial matter if we expect companies to be accountable.

We support the call of Common Frontiers and the Hemispheric Social Alliance for a face to face, summit to summit, consultation at Quebec City to review the growing evidence that the current design of undisciplined trade agreements is contrary to notions of conservation, ecological protection and environmental justice. To ensure a sustainable future for the planet, we must also attain social justice and human rights at home and around the globe.