CAFTA, NAFTA, Mad Cows and Capter 11 Rules

In a new report, NAFTA Chapter 11 Investor-State Cases: Lessons for the Central America Free Trade Agreement, Public Citizen describes how Canadian cattle producers are using NAFTA to demand $300 million in compensation from U.S. taxpayer funds, claiming that the Canadian cattle import ban instituted after mad cow disease was found in Canada violates their NAFTA rights. In addition, a Canadian tobacco company is using the private NAFTA tribunals to attack the U.S.tobacco settlements. The report is available here...
These claims are among the 42 cases filed thus far by corporate interests and investors under NAFTA’s “Chapter 11” investor provisions, which grant foreign interests more expansive legal rights and privileges than those enjoyed by U.S. citizens or corporations. With only 11 of the 42 cases finalized, some $35 million in taxpayer funds have been granted to five corporations that have succeeded with their claims. An additional $28 billion has been claimed from investors in all three NAFTA nations. The U.S. government’s legal costs for the defense of just one recent case topped $3 million. Seven cases against the United States are currently in active arbitration.
“It’s unbelievable that the Bush administration is pushing a NAFTA expansion to Central America that would expose the United States to yet greater liability, given the grim track record of successful attacks on the most basic health protections and government functions and millions in taxpayer funds already paid out to special interests under the NAFTA-style investment model,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.