Since the writing of "Seven Years of NAFTA," Phillip Morris has joined the ranks of corporations threatening to sue under the investor "protection" provisions of NAFTA's Chapter 11. Phillip Morris' threat illustrates the new vulnerability of public health and environmental regulations. Phillip Morris has been subject to government restrictions on cigarette advertising for years, but now NAFTA offers a way to block such restrictions. In response to a proposal by the Canadian government to ban the words "mild" and "light" from cigarette packaging, Phillip Morris has warned that it may sue for damages. The Canadian and the U.S. governments have both been considering such a ban, because of evidence that mild and light cigarette brands confuse or mislead consumers into believing that these are safer than other types of cigarettes. Although Phillip Morris has not yet filed a suit, the threat alone may be enough to discourage implementation of the ban.

How did democracy come to such a pass? It may seem astonishing that the NAFTA member governments so seriously compromised their ability to regulate in the public interest, on matters of vital importance like health and safety. In the case of the U.S, part of the explanation certainly lies in the process through which congress approved NAFTA. Congress severely limited its ability to deliberate on the contents of NAFTA when it gave approval in 1993, by first agreeing to fast track legislation. Fast track is a mechanism created during the Nixon administration that allows the executive branch to push international trade agreements through the legislature quickly, by allowing a maximum of only 20 hours of debate. In the whirlwind of fast track, congress accepted the rationale that strong investor protections were needed to prevent expropriation of U.S. companies by the Mexican government, apparently without fully appreciating the ramifications for the U.S. In his October 15th article in The Nation, "The Right and U.S. Trade Law: Invalidating the 20th Century," William Greider explores, in-depth, the story behind the adoption of NAFTA. Greider finds evidence that the corporate interests involved in the drafting of NAFTA were fully aware of the wider implications of Chapter 11, and pushed for the agreement's radical re-definition of property rights in order to force all three member governments, not just Mexico, to be more hesitant when it comes to regulations that interfere with corporate profits.

What can be done? The Canadian government has become sufficiently alarmed to propose an amendment to NAFTA that limits the extent of investor protections in Chapter 11. The U.S. federal government has yet to respond in kind, but state governments in the U.S. are mobilizing in response to the threat to state sovereignty highlighted by cases like Methanex vs. U.S, in which the Canadian company Methanex is suing for $970 million over California's ban on the toxic gasoline additive MTBE.

Beyond the obvious need to fix NAFTA, there is the need to prevent the same mistake being made on a larger scale with the FTAA, which will extend NAFTA to the entire western hemisphere. The mainstream media should recognize this impulse in its coverage of protests against the FTAA. President George W. Bush has been pushing for fast track for the FTAA. This fall, fast track will be in the House for a second time, and there is a good chance that it can be defeated with sufficient public opposition.

-- David Huffman

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Albion Monitor September 5 2002 (http://albionmonitor.net)

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