Canoe

Tuesday, May 1, 2001

Canada's summit position not clear

OTTAWA (CP) -- Canada still has not established a firm position on a contentious element of the Free Trade Area of the Americas agreement that would require governments to treat foreign companies the same as domestic ones.

The clause, known as Chapter 11, is contained in the current North American Free Trade Agreement.

Confusion has reigned over Ottawa's position on such a clause in the FTAA, the expanded hemisphere-wide agreement under negotiation.

Trade Minister Pierre Pettigrew has said Canada could never accept such a clause in an expanded hemisphere-wide deal. Yet Prime Minister Jean Chretien has said it's worked "remarkably well."

Canada's chief FTAA negotiator told the Commons foreign affairs committee Tuesday that officials will consult their U.S. and Mexican partners toward "clarification" of the controversial clause.

"Once we have achieved those objectives we will reflect that in the FTAA," Claude Carriere, director of the trade policy bureau at the Foreign Affairs Department, said.

"We are developing specific ideas to engage in a discussion with our partners to clarify certain elements of Chapter 11."

In response to questions from New Democrat MP Svend Robinson, Carriere said a second round of talks with Mexico and the United States is scheduled in Washington next week.

Under Chapter 11, corporations have sued governments for lost revenues -- past and future -- over what they argue are discriminatory policies.

United Parcel Service is suing the Canadian government for funding Canada Post's parcel delivery, for example. In another case, Ohio-based S.D. Myers sued Canada for $10 million US for killing a deal to destroy PCBs from Alberta. Using Chapter 11, S.D. Myers argued Canada unfairly discriminated against it and a NAFTA tribunal agreed. Damages have yet to be assessed.

Said Robinson: "It's absolutely appalling that after the lengthy consultation the government says they went through, they still don't have a position."

Chretien has said the clause will have to be looked at in the context of FTAA, the hemisphere-wide agreement now being negotiated.

-- Rachel Gibson (rgibson@hotmail.com), May 01, 2001