# Quebec City, or: Canadians Duke It Out **URL:** \ **Category:** The BBQ Pit\ **Created:** [April 29, 2001, 11:11pm UTC](https://boards.straightdope.com/t/quebec-city-or-canadians-duke-it-out/63765 "2001-04-29T23:11:17Z")\ **Posts on this page:** 12\ **Page:** 2
**Author:** ![Badtz\_Maru](https://avatars.discourse-cdn.com/v4/letter/b/e36b37/32.png) [@Badtz\_Maru](https://boards.straightdope.com/u/Badtz_Maru)\ **Post date:** [May 1, 2001, 5:03am UTC](https://boards.straightdope.com/t/quebec-city-or-canadians-duke-it-out/63765/21 "2001-05-01T05:03:03Z")
> [@](#): > > I think that there might have been a decimal misplaced somewhere along the line. It is my understanding that the projection which the UN is betting on is for an increase of 0.1 to 0.2 degrees C per decade for the next few decades. That’s a seriously misplaced decimal point. Here’s a quote from one of your cites. > [@](#): > > The globally averaged surface temperature is projected to increase by 1.4 to 5.8º over the period 1990 to 2100. These results are for the full range of 35 SRES scenarios, based on a number of climate models. That’s not very much, and typical for natural change in climate. Only 18,000 years ago the world was 4º C cooler on average than it is today, and it will probably get warmer as we are [currently living in an ‘ice age’](http://www.museum.state.il.us/exhibits/ice_ages/when_ice_ages.html). Some scientists believe global temperatures were 6 to 12° Celsius lower. Sudden changes in climate within an ice age are normal - the average global temperature during the ‘Little Ice Age’ of 1550-1700 dropped 1 to 2 degrees. [Here](http://jrscience.wcp.muohio.edu/Weather/PaperProposalArticles/TheLittleIceAgewasitbigen.html) is an interesting site about those times and possible reasons for the dip in temperature. Average global temperatures have been as much as 10 degrees Celsius higher than current temperatures between ice ages in the past, so even if it did get 5.8 degrees warmer over the next 100 years it would not be abnormally hot for our planet, and not even close to being as hot as it has been. ---
**Author:** ![SuaSponte](https://avatars.discourse-cdn.com/v4/letter/s/67e7ee/32.png) [@SuaSponte](https://boards.straightdope.com/u/SuaSponte)\ **Post date:** [May 2, 2001, 2:49pm UTC](https://boards.straightdope.com/t/quebec-city-or-canadians-duke-it-out/63765/22 "2001-05-02T14:49:53Z")
Hey, **Upham** , where are ya, buddy? {b]Rickjay\*\* and I have posted some questions for ya. Please enlighten us. Sua ---
**Author:** ![matt\_mcl](https://avatars.discourse-cdn.com/v4/letter/m/7ab992/32.png) [@matt\_mcl](https://boards.straightdope.com/u/matt_mcl)\ **Post date:** [May 2, 2001, 6:34pm UTC](https://boards.straightdope.com/t/quebec-city-or-canadians-duke-it-out/63765/23 "2001-05-02T18:34:40Z")
The problem with the FTAA is that it is not about free trade. Contrariwise, its opponents are not in favour of protectionism. The problem is, in our experience of other free trade agreements and from what we know of the text - particularly the investor’s rights section and the GATS - it savages the ability of governments to regulate commerce for the good of their societies. Let’s look at some previous free-trade agreements, like NAFTA and Mercosur. > [@](#): > > Both NAFTA and MERCOSUR include measures to deregulate foreign investment and grant national treatment (non-discriminatory) rights to foreign investors. Both prohibit “performance requirements” whereby foreign investment must enhance the local economy and support local workers. > > And both are based on a model of trade and investment liberalization that locks in the Structural Adjustment Programs (SAPs) introduced earlier into Latin America by the World Bank and the International Monetary Fund (IMF). Under these programs, most developing countries were forced to abandon domestic industry in favour of transnational corporate interests; turn their best agricultural lands over to export crops to pay off their national debt; curtail public spending on social programs and abandon universal health care, education and social security programs; deregulate their electricity, transportation, energy and natural resources sectors; and remove regulatory impediments to foreign investment. > [@](#): > > The countries of Central and South America and the Caribbean are being given all sorts of promises about the FTAA: more liberalized trade and investment will create the biggest trade powerhouse in history, thereby spreading prosperity to the many millions of the region currently without work or hope, they are told. > > Latin Americans should examine these promises very carefully before jumping into this pact. > > The reality is that Latin America has been living under this FTAA model for over a decade. It is based on the Structural Adjustment programs of the World Bank and the IMF that Latin Americans know well. It was the deregulation and privatization imperatives of structural adjustment that forced most to dismantle their public infrastructures in the first place. In order to be eligible for debt relief, many dozens of the countries of the Americas were forced to abandon public social programs, allowing for-profit foreign corporations to come in and sell their health and education “products” to “consumers” who can afford them. > > Now these countries are allowed to maintain the most basic of public services only for the poor; but these services are so inadequate that the corporations aren’t interested in them, and many millions of people in the hemisphere go without the most basic of education and health services. Not surprisingly, Latin American countries are experiencing an invasion of U.S. health care corporations, like Aetna International and American International, who report a 20 percent growth in the region per year. > > Under the FTAA, this process will accelerate, wiping out traditional medicine, education and cultural diversity. In fact, worldwide economic and cultural harmonization is the goal, says one top U.S. WTO official, who adds, “Basically, it won’t stop until foreigners finally start to think like Americans, act like Americans and - most of all - shop like Americans.” > > The last decade of trade and investment liberalization has already caused great suffering in Latin America. Interest rates on debt payments have soared from 3 percent in 1980 to over 20 percent today. Latin America, as a region, has the highest rate of inequitable income distribution in the world. After swallowing its free market medicine, it now has a poverty rate higher than it was in 1980 and the buying power of Latin American workers is 27 percent lower. Eighty-five percent of all job growth has been in the precarious sector with no benefits or protections. > > Mexico, eight years into NAFTA, now has record-high poverty rates of 70 percent; the average minimum wage lost more than three quarters of its purchasing power in those years. Ninety million Latin Americans are now indigent and 105 million have no access to health care whatsoever. Child labour has grown dramatically; there are now at least 19 million children working in terrible conditions. Massive environmental degradation has resulted from the region’s desperate rush to exploit its natural resources and the use of pesticides and fertilizers has tripled since 1996; there are now 80,000 chemical substances produced and used in the Americas. > > The exploitation of Latin America’s natural resources by Canadian and U.S. corporations now taking place would dramatically increase under a hemispheric pact. Transnational mining, energy, water, engineering, forestry and fisheries corporations would have new access to the precious resource base of every country and the investor-state right to challenge any government that tried to limit their access to them. The ability of governments to protect the ecology or set environmental standards regarding the extraction of natural resources would be greatly reduced, as would the right to ensure local jobs from any activity of foreign corporations. > > Joining the FTAA under these circumstances would be “tantamount to suicide,” says the coalition of trade unions of the Southern Cone countries. In December 2000, the major unions of Argentina, Brazil, Paraguay and Uruguay held the MERCOSUR Trade Union Summit where they called upon their governments to submit the FTAA to national plebiscites, which they believe would result in its defeat. The FTAA process is deepening the already growing poverty of the region, the union leaders said, putting “limits on national institutions that should decide the future of each country, while pushing aside the mechanisms that allow society to ensure a democratic administration of the state.” As for the environment: > [@](#): > > The FTAA draft, as it now stands, contains no safeguards for the environment. The original mandate for the FTAA, drawn up at the first Summit of the Americas in Miami in 1994, contained a promise to promote economic integration of the hemisphere in such a way as “to guarantee sustainable development while protecting the environment.” A major Summit on Sustainable Development was held in Bolivia in 1996 in order to ensure that the principles of the 1992 Rio Earth Summit would be integral to the FTAA process. Out of that meeting (at which civil society groups and environmentalists were notably absent), came 65 initiatives know as the “Santa Cruz Action Plan,” and a new body, the OAS Inter-American Committee on Sustainable Development. > > However, the whole process was badly underfunded and had no clear mandate for action; it has been widely regarded as a failure. As a consequence, the whole goal of sustainable development was completely dropped from the FTAA’s new mandate at the Santiago Summit in 1998, and the tracks of trade and environment were completely separated. With George W. Bush now in the White House, it is even more certain that environmental concerns about the hemispheric free trade deal will be set aside. Taken from: Barlow, M. [The Threat of the Free Trade Are of the Americas.](http://www.canadians.org/campaigns/campaigns-tradepub-ftaa2.html) Council of Canadians. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [May 2, 2001, 9:20pm UTC](https://boards.straightdope.com/t/quebec-city-or-canadians-duke-it-out/63765/24 "2001-05-02T21:20:04Z")
> [@](#): > > \*Originally posted by matt\_mcl \* > \*\*The problem with the FTAA is that it is not about free trade. Contrariwise, its opponents are not in favour of protectionism. > > The problem is, in our experience of other free trade agreements and from what we know of the text - particularly the investor’s rights section and the GATS - it savages the ability of governments to regulate commerce for the good of their societies. \*\* Proof of this assertion? For all the ranting I’ve heard about NAFTA, for all the literature I’ve read, this assertion remains unsupported. “savages the ability of governments to regulate commerce?” Bullshit, Matt. That’s sheer nonsense. The government retains ENORMOUS power to regulate commerce. Incredible power. Every aspect of commerce is subject to governmental approval. Just have them audit your business and see how powerless you think they are. > [@](#): > > \*\*Both NAFTA and MERCOSUR include measures to deregulate foreign investment and grant national treatment (non-discriminatory) rights to foreign investors. Both prohibit “performance requirements” whereby foreign investment must enhance the local economy and support local workers. \*\* I would like to see a cite for this. Specific references, please. Repeating someone else’s assertion is not a cite. Of course, it IS true that NAFTA prohibits discrimination, to a limited extent (the governments retained many exceptions, of course) against investors based on national origin (as long as they’re Canadian, American, or Mexican.) What’s wrong with that? What conceivable disadvantages are there to this, aside from maybe causing a .01% reduction in cronyism? > [@](#): > > **And both are based on a model of trade and investment liberalization that locks in the Structural Adjustment Programs (SAPs) introduced earlier into Latin America by the World Bank and the International Monetary Fund (IMF). Under these programs, most developing countries were forced to abandon domestic industry in favour of transnational corporate interests…** “Based on a model” is a vague and meaningless statement. The IMF has its own problems to worry about, but here we are discussing NAFTA and FTAA. What specific part of NAFTA causes governments to “Abandon domestic industry”? How, specifically, does NAFTA cause the same problems as the IMF’s debt relief programs? > [@](#): > > **turn their best agricultural lands over to export crops to pay off their national debt; curtail public spending on social programs and abandon universal health care, education and social security programs…** Obviously irrelevant scare tactics. NAFTA does not force Canada, Mexico or the United States to pay off debt, curtial public spending of any kind, or abandon social security programs. Or can you provide specific evidence that NAFTA calls for these things? > [@](#): > > **The reality is that Latin America has been living under this FTAA model for over a decade. It is based on the Structural Adjustment programs of the World Bank and the IMF that Latin Americans know well.** Cite examples, please. How, specifically, is the FTAA agreement based on SAPs? What _Specific_ provisions of FTAA are the same? How are they the same? > [@](#): > > **Now these countries are allowed to maintain the most basic of public services only for the poor; but these services are so inadequate that the corporations aren’t interested in them…** What specific provisions in the FTAA will force governments to abandon public services? > [@](#): > > **Under the FTAA, this process will accelerate, wiping out traditional medicine, education and cultural diversity.** I guess this is a completely separate debate, but I happen to believe this is an absurd crock of shit. Aside from the dubious value of “Traditional medicine,” I see absolutely no evidence whatsoever that trade reduces cultural diversity, and the proliferation of McDonald’s outlets is not a reduction in cultural diversity. Culture grows and recedes at a pretty steady pace no matter what trade barriers or deals we might sign, and anyone who thinks otherwise is a fool. Canada’s had lots of free trade among its own parts for better than a century and we still have a thriving francophone culture that enthusiastically traces its roots to before the days of Thomas Jefferson. > [@](#): > > \*\* In fact, worldwide economic and cultural harmonization is the goal, says one top U.S. WTO official, who adds, “Basically, it won’t stop until foreigners finally start to think like Americans, act like Americans and - most of all - shop like Americans.”\*\* But of course. An anonymous quote. That’s solid proof. :rolleyes: > [@](#): > > **The last decade of trade and investment liberalization has already caused great suffering in Latin America. Interest rates on debt payments have soared from 3 percent in 1980 to over 20 percent today.** How does the second sentence follow from the first? More to the point, how does NAFTA or FTAA cause interest rate to climb or fall? OR how does it cause Latin American countries from spending money they don’t have? I’m all for Third World debt relief (with conditions) but it’s obvious to me FTAA hasn’t anything to do with it. Latin American countries have been crushed under debt loads and shitty economies since before NAFTA was a glint in anyone’s eye. > [@](#): > > **Mexico, eight years into NAFTA, now has record-high poverty rates of 70 percent;** Bullshit. Or provide a cite, please. This figure, I suspect, is just made up; I keep seeing people say “Seventy percent! Seventy percent!” and I’ve never seen it supported with verifiable evidence, which suggests to me that one person made a claim and everyone’s just parroting it. The poverty rate in Mexico DID climb after the collapse of the peso in 1995, and it took until 1993 to get inflation down from the previous financial crisis in 1982 - but this would have happened with or without NAFTA, and to assign purchasing power drops that were caused by the peso’s devaluation to NAFTA is deceitful. But 70%? The poverty rate before in 1998, guessing high, was 27%. It’s gone up more than double in two years? I’d like to see some evidence for that. I cannot find any resource, anywhere, that places Mexican poverty races anywhere near half of your claim. While we’re on the subject, according to the United Nations, the poverty rate in Latin America declined sharply from 1990 to 1998; I can’t find data for 1999 or 2000. See [here.](http://www.un.org/rio+10/web_pages/prepcom1documents/sgreppoverty.pdf) I am as doubtful of Maude Barlow’s other claims as I am of this 70% figure. [QUOTE] \*\*As for the environment: [quote] The FTAA draft, as it now stands, contains no safeguards for the environment. > [@](#): > > \*\* Neither does the Charter of Human Rights and Freedoms. Neither does the Criminal Code of Canada. Neither do the Official Rules of Baseball. FTAA isn’t an environmental pact. ---
**Author:** ![matt\_mcl](https://avatars.discourse-cdn.com/v4/letter/m/7ab992/32.png) [@matt\_mcl](https://boards.straightdope.com/u/matt_mcl)\ **Post date:** [May 2, 2001, 9:33pm UTC](https://boards.straightdope.com/t/quebec-city-or-canadians-duke-it-out/63765/25 "2001-05-02T21:33:55Z")
SOURCES Free Trade of the Americas, Canadian Government Release: Canada’s Proposals for the FTAA Agreement, Department of Foreign Affairs and International Trade, December 13, 2000, Ottawa. The State of the FTAA Negotiations at the Turn of the Millennium, Paper prepared for the conference, “Trade and the Western Hemisphere,” organized by Southern Methodist University, Dallas, Texas, March 25, 2000, by Sherri M. Stephenson, Deputy Director for Trade, Organization of American States. Report to the Trade Negotiations Committee, Restricted Document by the FTAA Negotiating Group on Services outlining its mandate, leaked in October 2000. Services and Trade in the Western Hemisphere: Liberalization, Integration and Reform, Collection edited by Sherri. M. Stephenson, Brookings Institute, Washington, 2000. Social Exclusion, Jobs, and Poverty in the Americas, Paper prepared for the Americas Civil Society Forum, November 1999, Toronto, by the Hemispheric Social Alliance and Common Frontiers-Canada. Forgotten Promises and Forgotten Lessons: The OAS, the FTAA and Environmental Protection, Paper prepared for the International Centre for Democratic Development Workshop, Windsor, June 5, 2000, by Christine Elwell of the Sierra Club of Canada. Navigating NAFTA, A Concise User’s Guide to the North American Free Trade Agreement, Barry Appleton, Carswell, Toronto, 1994. MAI, The Multilateral Agreement on Investment and the Threat to Canadian Sovereignty, Tony Clarke and Maude Barlow, Stoddart, Toronto, 1997. Whose Trade Organization? Corporate Globalization and the Erosion of Democracy, Lori Wallach and Michelle Sforza, Public Citizen, Washington DC, 1999. GATS: How the World Trade Organization’s New “Services” Negotiations Threaten Democracy, Scott Sinclair, The Canadian Centre for Policy Alternatives, Ottawa, Ontario, 2000. The World Trade Organization, A Citizens’ Guide, Steven Shrybman, The Canadian Centre for Policy Alternatives, Ottawa, Ontario, and James Lorimer and Co. Ltd, Halifax, Nova Scotia, 1999. Invisible Government, the World Trade Organization: Global Government for the New Millennium? Debi Barker and Jerry Mander, International forum on Globalization, San Francisco, 2000. ---
**Author:** ![matt\_mcl](https://avatars.discourse-cdn.com/v4/letter/m/7ab992/32.png) [@matt\_mcl](https://boards.straightdope.com/u/matt_mcl)\ **Post date:** [May 2, 2001, 9:48pm UTC](https://boards.straightdope.com/t/quebec-city-or-canadians-duke-it-out/63765/26 "2001-05-02T21:48:44Z")
> [@](#): > > \*Originally posted by RickJay \* > \*\* > > > [@](#): > > > > \*Originally posted by matt\_mcl \* > > \*\*The problem with the FTAA is that it is not about free trade. Contrariwise, its opponents are not in favour of protectionism. > > > > The problem is, in our experience of other free trade agreements and from what we know of the text - particularly the investor’s rights section and the GATS - it savages the ability of governments to regulate commerce for the good of their societies. \*\* > > Proof of this assertion? > [@](#): > > The investor-state dispute mechanism allows foreign corporations to sue governments directly whenever they think their “rights” have been violated by a particular government measure… > > Key to the investor-state provision is NAFTA’s extremely broad definition of “expropriation.” By narrow legal definition, expropriation means the actual “taking” of private property, almost always land. But a well-organized effort by corporations in the US during the Reagan era led to a series of Supreme Court decisions that expanded this narrow legal definition to include what is now called “regulatory taking.” This Fifth Amendment definition now includes any government regulatory action (law, regulation, rule or policy) that reduces the commercial value of an investment or the expected profit from an investment - including future profits. This new definition of expropriation has found its way into NAFTA’s Chapter 11. > > In effect, Chapter 11’s dispute settlement provisions give foreign corporations the right to directly enforce an international treaty signed by sovereign governments, under which the corporations have absolutely no obligations. This underlines the fact that these trade agreements are primarily aimed at restricting governments from regulating or controlling corporations. > > These suits, whose decisions go to the heart of government policy-making and national sovereignty, are treated exactly as if they are narrow, contractual disputes between commercial enterprises. Thus they are shrouded in complete secrecy from the beginning of the process to the end. > > Because they are presumed to be simply about commercial matters, they explicitly exclude from the proceedings any other public interests potentially affected by the case. Tribunals are not even obliged to publicly announce their decisions. Governments do not have the right to appear at these star chamber events to defend the laws and regulations that are being challenged, but have to ask for intervener status if they wish to present arguments. > > Decisions are made not by judges of the domestic judicial system (who are obliged to take account of the broad public interest) but by a tribunal of trade arbiters who are naturally biased in favour of facilitating trade. Most are trade lawyers, often with firms that serve corporate clients. While their decisions may have a profound effect on health and environmental matters, the tribunal members have no expertise in any area other than trade law. The country being sued chooses one of the tribunal members, as does the country that is the home base of the challenging corporation. The third member is mutually agreed to or appointed by an arbitration body. > > There is no way of knowing how many Chapter 11 challenges have actually been launched. But the ones that have been made public - usually by the company making the claim - number fifteen. Each has in common a challenge to a democratically proclaimed law or regulation passed in the public interest. And even if the measure is acknowledged to be in the public interest, compensation is mandatory if it is deemed by a tribunal to be “inconsistent” with NAFTA. -[from the CoC website.](http://www.canadians.org/campaigns/campaigns-tradepub-ftaa-bigbrother.html)Following are accounts of several cases under the investor-state provisions of NAFTA, including Ethyl Corp’s suit against Canada, Metalclad’s against Mexico, UPS’s against Canada Post, and seven others. In each case, a corporation sued either a government service (such as Canada Post) or a government for laws democratically established in the public interest, which interfered with the value of the company’s investment. ---
**Author:** ![SuaSponte](https://avatars.discourse-cdn.com/v4/letter/s/67e7ee/32.png) [@SuaSponte](https://boards.straightdope.com/u/SuaSponte)\ **Post date:** [May 3, 2001, 12:33am UTC](https://boards.straightdope.com/t/quebec-city-or-canadians-duke-it-out/63765/27 "2001-05-03T00:33:06Z")
Thanks, **matt**. I had written out a detailed response, but I lost my connection, and now lack the time to re-create it. Just a few quick points: 1. The author you quote simply assumes that NAFTA is responsible for Mexico’s economic troubles. He provides no evidence of that, and provides no evidence as to whether Mexico’s economic conditions would be better, worse, or the same had NAFTA not been inplemented. A more definsible position is that Mexico’s current condition is a result of the peso crash in '94. That wasn’t caused by NAFTA, but by the traditional problem of a government spending more money than it had. The IMF required the Mexican government to exercise fiscal restraint (i.e., stop spending more money than it had), as a condition of receiving a bail-out. While that is painful, it’s pretty obvious - if you go bankrupt, you would have to spend less money then you had previously. Which leads to – 2. How the hell are the IMF’s and World Bank’s programs related to FTAA? Last I checked, neither organization will be a party to FTAA, and the FTAA concerns trade rules, not a government’s fiscal policies. 3. The author is still engaged in the magical thinking that Latin America’s economic problems were imposed from the outside, under the guise of, well, whatever the guise the author thinks (see #2 above). They weren’t. a. Latin America has had massive inequities in income distribution throughout its history, certainly throughout the 20th Century. b. Dismantle **what** public services infrastructure? Throughout the 20th century, Latin America has suffered from abysmal public services in health and education, particularly education. These conditions existed well before whatever cut-off date the author is using (I guess 1980). One of the biggest problems Latin America has had with economic development was the lack of spending on education, and therefore an over-small educated workforce. c. Has Barlow ever heard of the Latin American “debt bomb”? Almost every nation in Latin America emerged from the 70’s and early 80’s with huge debts. The problems Barlow attributes to “free market medicine” were actually caused by the fact that the governments borrowed too much and had to cut back massively on spending to repay the loans. Further, the Latin American countries ran up their huge debts when (a) they weren’t democracies, and (b) during the protectionist, capital-controls era of the 60’s and 70’s. I can more easily argue that these problems wouldn’t have occurred had Latin America had true free markets back then than Barlow can argue that “free market medicine” caused these problems. A few factual points. 1. Barlow’s assertion that U.S. health care corporations are growing 20% in the region, even if such growth was conceded to be a bad thing, is a useless statistic if he don’t know the base from which it is growing. 2. I believe that Barlow’s assertion that interest rates in Latin America were 3% in 1980 is a flat lie, for two reasons. First, the prime rate in the U.S. during that period was over 10%; I strongly doubt Latin America had lower rates. Second, 1980 was still in the era of hyperinflation in Latin America - when prices were increasing at a rate of 3% a day, I strongly doubt anyone was loaning money at 3% a year. That’s a fantastic way for a bank to go bankrupt. 3. Has Barlow considered that the increase in the use of fertilizers might be because the population has increased while the amount of arable land hasn’t (or not as quickly)? 4. When farmers switch over to export crops, not only does the government make more money in taxes, but the farmer makes more money. Is that a bad thing? Next, Barlow’s comments about the environment make no sense. If the Santa Cruz plan is underfunded, the solution is to fund the Santa Cruz plan, not kill FTAA. A final point - I found your reference to Metalclad’s suit against Mexico as an attack on “a government for laws democratically established” to be quite amusing. The claim was filed in 1997, and Mexico has been a democracy for less than a year. Sua ---
**Author:** ![matt\_mcl](https://avatars.discourse-cdn.com/v4/letter/m/7ab992/32.png) [@matt\_mcl](https://boards.straightdope.com/u/matt_mcl)\ **Post date:** [May 3, 2001, 2:15am UTC](https://boards.straightdope.com/t/quebec-city-or-canadians-duke-it-out/63765/28 "2001-05-03T02:15:04Z")
> [@](#): > > _Originally posted by SuaSponte \* > A final point - I found your reference to Metalclad’s suit against Mexico as an attack on “a government for laws democratically established” to be quite amusing. The claim was filed in 1997, and Mexico has been a democracy for less than a year._\* I or someone else will respond to the rest of your points a little later, but I’d just quickly like to point out that the democratic laws in question were passed not by the federal government in México DF, but by the local government with strong popular support. ---
**Author:** ![SuaSponte](https://avatars.discourse-cdn.com/v4/letter/s/67e7ee/32.png) [@SuaSponte](https://boards.straightdope.com/u/SuaSponte)\ **Post date:** [May 3, 2001, 12:08pm UTC](https://boards.straightdope.com/t/quebec-city-or-canadians-duke-it-out/63765/29 "2001-05-03T12:08:20Z")
> [@](#): > > \*Originally posted by matt\_mcl \* > I or someone else will respond to the rest of your points a little later, but I’d just quickly like to point out that the democratic laws in question were passed not by the federal government in México DF, but by the local government with strong popular support. Oh, for that I’ll definitely need a cite. If the PRI was in charge of the local government, you will never convince me. If San Luis Potosi was one of the few PAN states (IIRC, PRD only actually won local office in Mexico DF), you may have a point. Sua ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [May 3, 2001, 2:03pm UTC](https://boards.straightdope.com/t/quebec-city-or-canadians-duke-it-out/63765/30 "2001-05-03T14:03:15Z")
Matt, you’ve given me two replies here. One is a list of publications and I’m not quite sure what to do with that because it’s just a list of publications without any reference to which one you pulled which point out of. So for now I’ll just reply to your post with all the arguments from the CoC. > [@](#): > > \*Originally posted by matt\_mcl \* > \*\*The investor-state dispute mechanism allows foreign corporations to sue governments directly whenever they think their “rights” have been violated by a particular government measure… \*\* Hyperbole does not constitute proof, and that’s all this is. You know as well as I that NAFTA does not “Allow” corporations to "sue governments whenever they think their “`rights’ have been violated.” That may look good as propaganda on the CoC website but it doesn’t work as a logical argument. First off, corporations can sue the government anytime they want, so NAFTA doesn’t “Allow” them to do that. There’s no special legal right being granted here. Secondly, what NAFTA actually does is allow investors to apply for _arbitration_ if they feel the government has violated a specific part of NAFTA. Not “whenever they feel their rights have been violated.” And it’s not something just reserved for corporations, either. Now, I don’t really know what the problem is with holding the government to a deal, but perhaps you can elaborate. > [@](#): > > **Key to the investor-state provision is NAFTA’s extremely broad definition of “expropriation.” By narrow legal definition, expropriation means the actual “taking” of private property, almost always land. But a well-organized effort by corporations in the US during the Reagan era led to a series of Supreme Court decisions that expanded this narrow legal definition to include what is now called “regulatory taking.” This Fifth Amendment definition now includes any government regulatory action (law, regulation, rule or policy) that reduces the commercial value of an investment or the expected profit from an investment - including future profits. This new definition of expropriation has found its way into NAFTA’s Chapter 11.** I found this to be the most interesting argument in your post. **It is a complete and total falsehood.** 1. What the Supreme Court of the United States says about the definition of “Expropriation” is obviously not relevant outside of the United States, so this has zippo to do with NAFTA. These alleged decisions don’t affect us, don’t affect the NAFTA treaty, don’t affect anything. If the SCOTUS has cast too wide a net, that’s Congress’s problem to solve, not ours. 2. **There is no definition of “Expropriation” in Chapter 11!** This “new definition has found its way into NAFTA” stuff is just a lie. (Yes, I know it isn’t you saying it.) Go ahead, read [Chapter 11 of NAFTA.](http://www-tech.mit.edu/Bulletins/Nafta/11.invest) It isn’t there. So how has this definition “found its way” into NAFTA? Matt, no offense, but I get the sense you haven’t read NAFTA and are just going on what others are telling you. > [@](#): > > **In effect, Chapter 11’s dispute settlement provisions give foreign corporations the right to directly enforce an international treaty signed by sovereign governments** That’s half falsehood and half misdirection. Of course nothing in NAFTA gives corporations the right to “Directly enforce” NAFTA. Do you realize what “directly enforce” literally means? As a matter of fact, there’s very little “enforcement” of NAFTA at all. NAFTA pretty much relies on the participating countries to willingly go along with it; if they don’t, the treaty is pretty much a dead letter. The only level of “enforcement” in NAFTA is directly enforced by the countries themselves, and amounts to just erecting trade barriers of equal force in similar industries. See [Section 2018.](http://www-tech.mit.edu/Bulletins/Nafta/20.dispute) As to the general concept, though, assuming “directly enforce” was just an error, what’s wrong with holding governments to deals they sign? > [@](#): > > **under which the corporations have absolutely no obligations. This underlines the fact that these trade agreements are primarily aimed at restricting governments from regulating or controlling corporations.** Again, more misdirection. Of course NAFTA places no obligations on corporations. It doesn’t place any obligations on anyone except the parties who signed it - Canada, the USA, and Mexico. That’s how international treaties work. They’re agreements between nations. > [@](#): > > \*\*These suits, whose decisions go to the heart of government policy-making and national sovereignty, are treated exactly as if they are narrow, contractual disputes between commercial enterprises. Thus they are shrouded in complete secrecy from the beginning of the process to the end. \*\* Gosh, the misdirection and lying here is appalling. To get the absurd stuff out of the way first, if these decisions are “Shrouded in secrecy from beginning to end,” why can you get a complete list of them [here?](http://www.nafta-sec-alena.org/english/index.htm) And why was it so easy for me to find the case Methanex filed? Doesn’t seem all that secretive to me. But perhaps you can post more evidence or clarify this claim. As to the misdirection, I’m not sure precisely what the CoC means when they say this “Goes to the heart of government policy-making and national sovereingty,” that being a pretty nebulous argument. I’ll say this, though; the frequently floated argument that NAFTA reduces our sovereignty is a complete crock. NAFTA doesn’t reduce our sovereignty one iota, not a smidgen. We entered NAFTA freely as a sovereign state and we can leave it or ignore it anytime we want. Canada _chooses_ to live by its principles and requirements, and can choose at will to abandon it. There’s nothing about this deal that is any different from Canada’s acceptance of ICJ jurisdiction or recognition of the Geneva Conventions and the War Crimes Tribunal. Those things all submit us to extranational courts and arbitrators. We can leave those agreements whenever we choose, too. Why don’t I see people protesting the ICJ? > [@](#): > > \*\*Because they are presumed to be simply about commercial matters, they explicitly exclude from the proceedings any other public interests potentially affected by the case. \*\* That is a falsehood. There is no explicit exclusion of anyone in the dispute settlement mechanism of NAFTA. > [@](#): > > **Tribunals are not even obliged to publicly announce their decisions. Governments do not have the right to appear at these star chamber events to defend the laws and regulations that are being challenged, but have to ask for intervener status if they wish to present arguments.** What nonsense. In fact, any one of the three NAFTA signatories has an unrestricted right to be represented before a panel, even if they aren’t a direct party to the case (section 2013.) There has to be at least one hearing before a panel makes a decision, and the parties must be allowed to submit at least one round of written rebuttals after the hearing (section 2012(1).) There is no requirement for the countries involved to “Ask for intervener status.” They’re part of the process automatically. > [@](#): > > **Decisions are made not by judges of the domestic judicial system (who are obliged to take account of the broad public interest) but by a tribunal of trade arbiters who are naturally biased in favour of facilitating trade. Most are trade lawyers…** Evidence for this assertion, please? While I certainly see a lot of logic in referring matters of trade to people who actually some some experience in trade, there is no requirement in NAFTA for panel members to be trade experts; the agreement specifically lays out areas of expertise they should have, and international trade is only one possibility. Another is - get this - the laws of the respective countries. Another is expertise in any area affected by NAFTA rulings. Now, it might be that the pool of panel members right now is dominated by trade experts. Not sure how that’s a bad thing, but perhaps you can demonstrate that it’s true. > [@](#): > > **The country being sued chooses one of the tribunal members, as does the country that is the home base of the challenging corporation. The third member is mutually agreed to or appointed by an arbitration body.** This is pathetic. They can’t even get the simple facts right. Panels (not “tribunals.” Decisions are made by panels.) have FIVE members, not three. The countries involved must agree on a chair or have the chair chosen by lot. They then select two more panelists **who are citizens of the other country involved,** except where a third country jumps into the fray, in which case the country being complained against selects one person from each of the two complaining countries. See section 2011. > [@](#): > > **There is no way of knowing how many Chapter 11 challenges have actually been launched. But the ones that have been made public - usually by the company making the claim - number fifteen.** There are more than thirty active cases listed at [the link I provided earlier](http://www.nafta-sec-alena.org/english/index.htm), plus scores and scores more listed as completed. Every decision can be reviewed in exacting detail in the format of your choice. Whoever wrote this must have balls the size of Toyotas to say that something is “Secretive” and a “Star chamber” that can be found on the Web in about thirty seconds by typing “NAFTA” into any search engine. > [@](#): > > \*\* Each has in common a challenge to a democratically proclaimed law or regulation passed in the public interest\*\* Well, except for the ones that aren’t challenges to laws at all. (Not every action the government takes is a law, you know. Many NAFTA decisions relate to product dumping.) Or the ones that are challenges to actions that obviously weren’t taken in the public interest. That’s up to the panel to decide, but let me just point out that anyone who thinks government does most of what it does out of concern for the public interest is pretty damned stupid. Matt, the person you are quoting here is either astonishingly dishonest or is simply not acquainted with the facts. You might want to find better resources or do your own research, but there are so many errors of fact, outright lies, misunderstandings and absurd distortions I’m surprised the CoC has the guts to put it on their Web site. ---
**Author:** ![system](https://global.discourse-cdn.com/straightdope/original/2X/e/e489c3b7d8fce19c4b355dd4fc3f88cc39c34b87.png) [@system](https://boards.straightdope.com/u/system)\ **Post date:** [May 3, 2001, 2:44pm UTC](https://boards.straightdope.com/t/quebec-city-or-canadians-duke-it-out/63765/31 "2001-05-03T14:44:32Z")
Hmm, this attracted my attention. > [@](#): > > \*Originally posted by SuaSponte \* > > 1. The author you quote simply assumes that NAFTA is responsible for Mexico’s economic troubles. He provides no evidence of that, and provides no evidence as to whether Mexico’s economic conditions would be better, worse, or the same had NAFTA not been inplemented. Let me amplify on this. In common with many anti-Free Trade attacks, there appears to be no effort to decompose gains and losses. Bad things are assigned willy-nilly to NAFTA influences, good things to prior economic practices, ipso facto. The logic escapes me insofar as prior economic practices are what got Latin American countries in trouble to begin with (generalizing). Some vague talk of international corporate exploitation strikes me as largely unexamined importing of old fashioned marxist thinking and analsys. And as Sua says below, magical thinking which ignores other fundamental problems such as population growth. > [@](#): > > That wasn’t caused by NAFTA, but by the traditional problem of a government spending more money than it had. The IMF required the Mexican government to exercise fiscal restraint (i.e., stop spending more money than it had), as a condition of receiving a bail-out. While that is painful, it’s pretty obvious - if you go bankrupt, you would have to spend less money then you had previously. Again let me agree with Sua here. At some point if your debt funded spending has not been efficient in creating new wealth and new productive capacity, you hit a wall. This has happened all over the developing world with state-centered development plans. I know of no successful example of state centered (as opposed to state assisted but free market centered) development. Critics of the IMF presume that it is the bad guy. While one can say that not every IMF policy has been well-concieved in terms of getting the proper responses from either the state in question, or the society at large, one has to ask the question, why is the country going to the IMF to begin with? Because they spent beyond their means, debts accumulated and now they can no longer fund deficits. If not the IMF there would be two choices – private banks which charge yet higher interest rates, and who may simply refuse to lend if they fear default or no borrowing period. Meaning economic collapse. > [@](#): > > 1. The author is still engaged in the magical thinking that Latin America’s economic problems were imposed from the outside, under the guise of, well, whatever the guise the author thinks (see #2 above). They weren’t. Precisely. Deep-rooted structural inefficiencies are the real source of the problems. One can profitably ask where those inefficiencies come from but certainly it would be empty blame NAFTA or free trade per se. Rather, as Sau has noted there are (a) historical inequalities (b) failed state-centered development schemes of the 1970s and 1980s which led to a run up of debt without the creation of productive capacity – but plenty of graft, white elephants and wasted time and resources. Now as to these specific claims (I think they are meant to be critiques: > [@](#): > > abandon domestic industry in favour of transnational corporate interests I take this to mean abandon protection. Well, opening up to competition as opposed to subsidizing uneconomic industries is positive. Now, there is a critique to be made about the capacity for some economies to adjust rapidly enough, in which case transitions to international free market exchanges will have to be taken step wise, but on the other hand the pressure towards those steps can only be largely positive in terms of domestic efficiency. > [@](#): > > turn their best agricultural lands over to export crops to pay off their national debt I believe this really means encouraging and assisting farmers to respond ot export opportunities insofar as the state does not in a free market framework order production. > [@](#): > > curtail public spending on social programs and abandon universal health care, education and social security programs Well, this falls under the rubric of reduction of government spending. Typically the issue in re the IMF (which is not of course NAFTA but no matter) is the IMF asks country X to reduce government spending and identifies areas where cuts can be made. A menu of choices. As no sovereign nation can be compelled to do anything in particular, the choices are subject to negotiation. Politics and life being what they are, “national security spending” – read spending on police and military forces – usually is right out of consideration for cuts. Guess what that leaves? True, in the past IMF could have pressed harder and been more supportive of some kinds of spending, but on the other hand, cuts have to be made. > [@](#): > > deregulate their electricity, transportation, energy and natural resources sectors Usually this means denationalize, not ‘deregulate’ in the sense of what North Americans may typically think. That is generally a good thing given the horribly inefficient service most highly politicized ministries provide. > [@](#): > > remove regulatory impediments to foreign investment And finally this is hard to concieve of as bad. Again, while this is going to be specific to each country, more liberal capital controls should generally be a good thing. Frankly, they are a way to (a) stem capital flight, which is what has happened under closed systems anyway (b) encourage the entry of foreign capital to partly offset (a). ---
**Author:** ![SuaSponte](https://avatars.discourse-cdn.com/v4/letter/s/67e7ee/32.png) [@SuaSponte](https://boards.straightdope.com/u/SuaSponte)\ **Post date:** [May 3, 2001, 10:03pm UTC](https://boards.straightdope.com/t/quebec-city-or-canadians-duke-it-out/63765/32 "2001-05-03T22:03:06Z")
**Collounsbury** amplified on something I wrote, now I’d like to return the favor. > [@](#): > > \*Originally posted by Collounsbury \* > Now as to these specific claims (I think they are meant to be critiques: > > > [@](#): > > > > abandon domestic industry in favour of transnational corporate interests > > I take this to mean abandon protection. Well, opening up to competition as opposed to subsidizing uneconomic industries is positive. Now, there is a critique to be made about the capacity for some economies to adjust rapidly enough, in which case transitions to international free market exchanges will have to be taken step wise, but on the other hand the pressure towards those steps can only be largely positive in terms of domestic efficiency. > > and > > > [@](#): > > > > remove regulatory impediments to foreign investment > > And finally this is hard to concieve of as bad. Again, while this is going to be specific to each country, more liberal capital controls should generally be a good thing. Frankly, they are a way to (a) stem capital flight, which is what has happened under closed systems anyway (b) encourage the entry of foreign capital to partly offset (a). **matt** , how do you think the U.S. and Canada developed modern economies that (largely) provide a good standard of living for their citizens? At root, it was due to large inflows of capital investment from Great Britain, from the 1870s on. Those damned foreign investors created, in large part, the economic foundations on which our countries’ prosperity now stands. [If you want cites, I’ll be happy to provide them.] Both nations would have accumulated the capital themselves eventually, but free foreign investment, at a WAG, advanced North American economic development about 20 years. Had it not been for this investment, the U.S. and Canada would probably be, well, like Latin America now. And, of course, there were no labor or environmental restrictions on that investment. Sua [Previous page](https://boards.straightdope.com/t/quebec-city-or-canadians-duke-it-out/63765.md?page=1)