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North American Free Trade Agreement (NAFTA)

Extracts from this document...

Introduction

POLS 2910: Final Essay By: Nina Dhawan, Student number (206241053), TA Travis Fast January 1, 1994 marks the date in which North American Free Trade Agreement (NAFTA) was formerly implemented, creating the largest free trade zone in history. NAFTA advocates maintained that in the North American context through the implementation of the agreement thousands of new high wage jobs would be created, living standards would be elevated, environmental conditions would be improved and that Mexico would be transformed from a developing country to a "booming market" for US exports1. Ten years after the implementation of NAFTA, this calculation would prove to be overtly false as wages have drastically declined, thousands of jobs have been lost as companies relocated to Mexico, democratic law making is threatened and environmental standards are practically non-existent. Chapter eleven of NAFTA is at the heart of the controversy that surrounds the agreement. Critics of the investor chapter of NAFTA suggest that corporate interests have distorted the "shield" that chapter 11 intended to protect their interest and coerced it into a "sword" whereby they assault the autonomy of signatory countries2. Democracy has fell victim to Chapter eleven in the countries of North America, as national sovereignty and the ability to engage in democratic law-making processes are increasingly threatened because governments have to access the impacts of foreign corporation in the large part of the decisions that they make in order to avoid millions of dollars in potential compensation. Civil society, views this investment chapter as merely an extension of the broad goals of the NAFTA agreement in that they want to prevent the governments from doing what they are elected to do- serve the interest of the people instead of enslaving themselves to corporate economic desires. ...read more.

Middle

D. Myers case challenges this notion. S.D. Myers, an Ohio based waste management company used this article to sue Canada for 20 million dollars in compensation during the 16 months that Canada suspended the export of polychlorinated biphenyls(PCB) for disposal in its' plant located in Ohio10. At the time of the suspension, Canada had a legal obligation to get the approval of the EPA before exporting such a substance to the US for disposal coupled with the fact that Canadian laws that were in place at the time favored the local disposal of PCB's. Nonetheless, S. D. Myers won the case as they were able to skew the legal realities of the case by suggesting that its' company was treated "less fairly" because of the fact that it was not a Canadian company. The minimum international standards treatment article provides guidelines by which host countries must treat foreign investors in a "fair and equitable" manner that provides full protection and security to the given entity. In the Metalclad case, a California-based toxic waste company utilized this article to sue Mexico on the grounds that it was unfairly treated when it was denied authority to expand its' operations only on the grounds that it failed to obtain a construction permit. In the end, the tribunal found Mexico guilty because it "failed to provide a transparent, predictable, framework for business planning and investment, and demonstrated a lack of orderly process and timely disposition in relation to an investor."11 The interpretation of this article was in the broadest of terms and provides proof of the means in which NAFTA tribunals systemically favor corporate interests. The goal of the prohibition of performance article 1106, is to restrain a host government from imposing measures on an investor that would interfere with its' ability to achieve maximize economic efficiency and profits. ...read more.

Conclusion

1 Public Citizen. NAFTA: Undermining Sovereignty and Democracy. Washington: Public Citizen, 2004. (pg1). 2 Jones, Ray. "NAFTA Chapter 11 Investor-to-State Dispute Resolution: A Shield to be Embraced or A Sword to be Feared?" Brigham Young Law Review. (2002): pg 528. 3 Public Citizen. NAFTA: Undermining Sovereignty and Democracy. Washington: Public Citizen, 2004. (pg3). 4 Public Citizen. Bankrupting Democracy: NAFTA Chapter 11 Investor-to-State Cases. Washington: Public Citizen, 2001. (pg iv) 5 Public Citizen. Bankrupting Democracy: NAFTA Chapter 11 Investor-to-State Cases. Washington: Public Citizen, 2001. (pg iv) 6 International Institute for Sustainable Development. Private Rights, Public Problems. Winnipeg: International Institute for Sustainable Development, 2001 (pg 105). 7 Bottari, Mary. "NAFTA's Investor Rights: A Corporate Dream, A Citizen's Nightmare." Multinational Monitor. April 2001 (pg28). 8 Dawson, Laura ed. Whose Rights: NAFTA and the Chapter 11 debate. Ottawa: Centre for Trade Policy and Law, 2002. (pg 7) 9 Public Citizen. Bankrupting Democracy: NAFTA Chapter 11 Investor-to-State Cases. Washington: Public Citizen, 2001. (pg 2-3) 10 International Institute for Sustainable Development. Private Rights, Public Problems. Winnipeg: International Institute for Sustainable Development, 2001. (pg 27) 11 International Institute for Sustainable Development. Private Rights, Public Problems. Winnipeg: International Institute for Sustainable Development, 2001 (pg 74). 12 Public Citizen. Bankrupting Democracy: NAFTA Chapter 11 Investor-to-State Cases. Washington: Public Citizen, 2001(pg 3). 13 International Institute for Sustainable Development. Private Rights, Public Problems. Winnipeg: International Institute for Sustainable Development, 2001 (pg 31). 14 Bottari, Mary. "NAFTA's Investor Rights: A Corporate Dream, A Citizen's Nightmare." Multinational Monitor. April 2001 (pg27). 15 International Institute for Sustainable Development. Private Rights, Public Problems. Winnipeg: International Institute for Sustainable Development, 2001 (pg 38). 16 International Institute for Sustainable Development. Private Rights, Public Problems. Winnipeg: International Institute for Sustainable Development, 2001 (pg 54). 17 Bottari, Mary. "NAFTA's Investor Rights: A Corporate Dream, A Citizen's Nightmare." Multinational Monitor. April 2001 (pg 32). 1 ...read more.

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