[Congressional Record Volume 145, Number 114 (Thursday, August 5, 1999)]
[Extensions of Remarks]
[Pages E1762-E1763]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               ``NAFTA''

                                 ______
                                 

                      HON. JAMES A. TRAFICANT, JR.

                                of ohio

                    in the house of representatives

                        Thursday, August 5, 1999

  Mr. TRAFICANT. Mr. Speaker, I would like to have printed in the 
Record this statement by Nicholas Trebat from the Council on 
Hemispheric Affairs. I am inserting this statement in the Congressional 
Record as I believe that the views of this man will benefit my 
colleagues.

                         Corporate Sovereignty

                          (By Nicholas Trebat)


           Research Associate, Council on Hemispheric Affairs

       Its critics argue that the recent dispute between the 
     Methanex corporation and the U.S. government is a good 
     illustration of how NAFTA principally serves the interests of 
     the business sector even at the cost of the general public. 
     This may be evident in the manner in which the treaty's 
     Canadian, Mexican and American negotiators narrowly 
     determined what constituted a ``threat'' to national 
     sovereignty when the pact was forged in 1994. Granting 
     corporations the power to challenge national laws and 
     regulations that conflicted with their profit-making 
     strategies was apparently never considered as posing a 
     serious challenge to federal autonomy. Affirming labor 
     rights, conversely, seems to have been perceived as 
     tantamount to abdicating nationhood.
       Methanex, based in Vancouver, Canada, is the world's 
     largest producer of methanol, a key ingredient in the fuel 
     additive MTBE. The chemical allows gas to burn more 
     efficiently, but it also raises a potential hazard to the 
     nation's water supplies. On July 27, the Environmental 
     Protection Agency (EPA) formally recommended that MTBE usage 
     be heavily reduced.
       Much to Methanex's chagrin, the EPA was simply reiterating 
     findings previously reached by the state of California. Last 
     spring, its regulators stunned the company by threatening to 
     phase out the use of MTBE by 2002. Its scientists concluded 
     that MTBE had contaminated municipal reservoirs throughout 
     the state.
       Methanex, however, may be able to overturn the ban on the 
     product, or at least obtain substantial compensation (it is 
     demanding nearly one billion dollars) if California is able 
     to uphold its regulations. Chapter 11 of the NAFTA charter 
     could conceivably be interpreted by friendly parties as 
     giving the company the authority to do so, by stating that 
     any ``expropriation'' of ``investments,'' foreign or 
     domestic, is unlawful and subject to severe punitive 
     measures. Private corporations in the past have proven how 
     malleable this NAFTA provision can be. The most outrageous 
     incident involved the U.S.-based Ethyl corporation, which 
     intimidated Ottawa into repealing a ban on the gas additive 
     MMT, a substance proscribed in virtually every other country 
     in the world.


       Immediately following the Ethyl case, Canada, under the 
     threat of a lawsuit from the American chemical-treatment 
     company S.D. Myers, revoked a ban on the export of PCB-
     contaminated waste. In Mexico, another U.S. company, 
     Metalclad, sued authorities for introducing a zoning plan 
     that would force the corporation to relocate its waste 
     disposal facility, even though the facility's original 
     location endangered local water resources.
       One might assume from these cases that the three NAFTA 
     signatories no longer cherish their sovereignty. But this, as 
     the history of the North American Agreement on Labor (NAALC) 
     reveals, is only half true.
       That accord, signed in 1994 as a ``labor side'' codicil to 
     NAFTA, is awash in its concern for ``national sovereignty.'' 
     The agreement creates institutions that assess violations of 
     labor rights in the NAFTA countries. Out of fear that these 
     monitoring institutions would infringe upon domestic laws, 
     they were given only ``review and consultation'' status, with 
     no authority to adjudicate or even investigate individual 
     cases.
       It comes as no surprise, therefore, that of the 19 claims 
     of labor violations brought forward for review under the 
     NAALC, not one has resulted in a fine against the accused 
     country. Contrast this with the five claims filed by 
     corporations against NAFTA governments since 1996, which have 
     resulted in one major fine and two revocations of federal 
     health laws, with three of these cases still pending.
       In assessing the implications of NAFTA's impact on 
     ``national sovereignty,'' one has to recognize the duplicity 
     with which the trade pact's advocates have invoked this 
     phrase. In the trade agreement, devised almost in its 
     entirety by economists and business leaders, it is clear that 
     the term, at least in operational terms, largely has been 
     given short shrift. But in the NAALC charter, a commitment to 
     ``Affirming respect for each Party's constitution and law,'' 
     is found.
       This seeming doublespeak actually reveals with singular 
     clarity that NAFTA was created primarily to initiate a 
     gradual transfer of substantive authority from the public to 
     the private sector. Therefore, NAFTA's and its labor side 
     agreement's profound pro-corporate tilt should come as no 
     surprise.
       Perhaps it is for this reason that the Methanex case has 
     provoked no thunderous ukases from the White House, nor press 
     releases denouncing the lese majeste that private 
     multinationals are raising against traditional federal and 
     state autonomy. Let us

[[Page E1763]]

     hope that this silence does not persist, for not only are one 
     billion dollars worth of taxpayer funds at stake, but, more 
     importantly, the belief that the nation's laws should reflect 
     the needs of its citizenry, and not only the immoderate 
     demands of a few self-serving corporations.

     

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