No 1239 Posted by fw, January 24, 2015
“The study notes that ‘Canada has been sued more times and faces more active claims than any other NAFTA party. Indeed, according to the latest figures on ISDS claims from the United Nations Conference on Trade and Development (UNCTAD) Canada is now the most sued developed country in the world. This dubious distinction is entirely due to lawsuits under NAFTA chapter 11.’” —National Union of Public and General Employees
The study referred to above, just released by the Canadian Centre for Policy Alternatives, notes that Canada is moving in the opposite direction to most global public opinion opposed to Investor-State Dispute Resolution. ISDS, as George Monbiot sardonically pointed out, “means allowing corporations to sue governments over laws which might affect their profits.”
And as a SEE ALSO reference at the bottom of this post notes, Michigan billionaire Matty Moroun, owner of the Ambassador Bridge connecting Windsor to Detroit, is claiming damages from Ottawa in connection with Canada’s plan to help build a second bridge linking Ontario to Michigan at Detroit. His company has asked a NAFTA arbitration tribunal for $3.5 billion in damages from Ottawa. Matty is well-known in the Windsor-Detroit region: for years he has tried every trick in the book to derail the construction of the new bridge. NAFTA may prove to be a godsend.
A question not addressed in the following article but worthy of investigation is this: Are NAFTA lawsuits just the cost of doing business, more than offset by the economic benefits? A 2014 study by the US Congressional Research Service notes on page 13:
U.S. imports from Canada increased from $110.9 billion in 1993 to $332.1 billion in 2013, also a 200% increase (see Table A-1). After falling off during the recession of 2001, total trade with Canada reached a new high of $596.5 billion in 2008, only to fall victim to the financial crisis in 2009 when it fell to $429.6 billion. In 2011, total trade had returned to 2008 levels at $597.3 billion.
Doubtless other studies are available that would contest the CRS findings.
Click on the following linked title to read the original story. Alternatively, below, the story is cross-posted.
Lawsuits against Canada under NAFTA’s Chapter 11, investor-state disputes, are making Canada, according to the United Nations Conference on Trade and Development, the most “sued country in the developed world.” —Canadian Centre for Policy Alternatives, NAFTA Chapter 11 Investor-State Disputes to January 1, 2015
Ottawa (15 Jan. 2015) — A new study released by the Canadian Centre for Policy Alternatives (CCPA) reports that Canada has been sued under NAFTA more times than either the United States or Mexico. The [41-page] study, prepared by Scott Sinclair, is entitled Democracy Under Challenge: Canada and Two Decades of NAFTA’s Investor-State Dispute Settlement Mechanism.
Of the 77 known NAFTA investor-state dispute settlement (ISDS) claims up to January 1 2015, 35 have been against Canada while 20 have targeted the U.S., and 22 have been against Mexico.
Hundreds of millions of dollars in penalties and legal fees
Canada has paid out NAFTA damages totaling over C$172 million, while Mexico has paid damages of US$204 million. The U.S. has yet to lose a NAFTA Chapter 11 case.
All three governments have incurred tens of millions of dollars in legal costs to defend themselves against investor claims.
Canada most “sued developed country in the world”
The study notes that “Canada has been sued more times and faces more active claims than any other NAFTA party. Indeed, according to the latest figures on ISDS claims from the United Nations Conference on Trade and Development (UNCTAD) Canada is now the most sued developed country in the world. This dubious distinction is entirely due to lawsuits under NAFTA chapter 11.”
Since 2005, Canada has been the target of over 70 per cent of all NAFTA claims. Currently, Canada faces nine active claims challenging a wide range of government measures that allegedly interfere with the expected profitability of foreign investments. Foreign investors are seeking over $6 billion in damages from the Canadian government.
These claims include challenges to a ban on fracking by the Quebec provincial government and a decision by a Canadian federal court to invalidate a pharmaceutical patent on the basis that it was not sufficiently innovative or useful.
Is Canada an easy mark?
[Report author] Sinclair asks whether Canada is an “easy mark” when it comes to ISDS complaints.
“Canada is a favoured target of foreign investors and their lawyers. But it is reasonable to conclude that the federal government’s ideological commitment to ISDS and its demonstrated willingness to settle and pay compensation encourages investor-state claims against Canada.”
Despite track record federal government continues to push ISDS
Despite “a bruising experience under NAFTA chapter 11, Canada is moving in the opposite direction to much of the world and global public opinion on ISDS,” Sinclair writes.
The report also points out that
The report also notes that including ISDS in trade agreement pacts with the European Union, China and South Korea will likely increase the number of ISDS claims against Canada.
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