Tuesday,
NAFTA's Long Reach: National Laws Are Overturned
Anthony DePalma New York Times Service
Their meetings are secret. Their members are generally unknown. The decisions they reach need not be fully disclosed. .
Yet the way a small group of international tribunals handles disputes between investors and foreign governments has led to national laws being revoked, justice systems questioned and environmental regulations challenged. .
It is all in the name of protecting the rights of foreign investors under the North American Free Trade Agreement. .
The corporations - American, Canadian and Mexican alike - that directly invest in neighboring countries are thrilled that NAFTA provides some protection. Foes of the trade pact say some of their worst fears about anonymous government have become reality. .
As Western economies move toward more free trade and globalization, environmentalists, consumer groups and anti-trade organizations are increasingly worried about how the tribunals influence the enforcement of laws. .
These groups are gearing up for a fight at the Summit of the Americas next month in Quebec, where President George W. Bush will be pushing a vast new Free Trade Area of the Americas, which would provide for similar tribunals. .
Protesters will attack the sweeping powers and broad impact of the tribunals, along with their very nature - ad hoc panels drawn from lists of academics and international lawyers almost unknown outside their highly specialized fields. .
"What we're talking about here is secret government," said Joan Claybrook, president of Public Citizen, a consumer watchdog group in Washington that has been critical of NAFTA and other trade agreements. .
Ms. Claybrook said the 16 NAFTA cases that have been filed so far in the United States, Canada and Mexico showed how corporations were using NAFTA not to defend trade but to challenge the functioning of government. .
"This is not the way to do the public's business," she said. .
"There is no doubt," said Professor Andreas Lowenfeld, an international trade expert at the New York University School of Law, "that these measures represent an expansion of the rights of private enterprises vis-a-vis government. The question is: Is that a good thing?" .
The tribunals have been used in NAFTA disputes for only a few years, but the complaints they have handled have had many repercussions, including these: .
•The Canadian government lifted restrictions on manufacturing of an ethanol-based gasoline additive that it considered hazardous after an American manufacturer said that the ban hurt its business. .
•A tribunal ordered Mexico to pay an American company $16.7 million after finding that local environmental laws prohibiting a toxic-waste-processing plant that the company was building were tantamount to expropriation. .
•United Parcel Service, the package-delivery company, has filed a complaint contending that the very existence of the publicly financed Canadian postal system represents unfair competition that conflicts with Canada's obligations under NAFTA. Critics worry that if the tribunal upholds the UPS claim, government participation in any service that competes with the private sector will be threatened. .
Officials who oversee the tribunals say that they understand concerns about the less-than-public aspects of the panels' work but that anything that opens up the proceedings would undermine the promise of confidentiality. That, they say, would undermine the primary purpose of the arbitration mechanisms - to help foster commercial development.
