NAFTA - Chapter 11

"The Blackmail Government Provision"


The best way to understand NAFTA Chapter 11 is to read a couple of articles about it.  It would be completely incomprehensible that trade negotiators for the United States would agree to Chapter 11.  However, once one understands that the NAFTA agreement - and all subsequent 'free trade' agreements were negotiated against U.S. domestic interests for the purpose of breaking our nation, it makes perfect sense.  It gives foreign corporations and the governments of Canada and Mexico the ability to sue our government for interference with their profit-making endeavors.  They don't sue in a U.S. court, they sue in front of a kangaroo court - NAFTA Tribunal. 

This treasonous (IMO) provision of NAFTA is the mechanism that is being used to breakdown U.S. National Sovereignty by allowing corporations to overturn our environmental, labor, public safety and citizen protection laws. 

NAFTA's Investor "Rights" - A Corporate Dream, A Citizen Nightmare

NAFTA Chapter 11 Investor-to-State Cases: Bankrupting Democracy, Public Citizen

NAFTA Tribunals Stir US Worries, Adam Liptak, NY Times

Trading Democracy: The Other Chapter 11, Bill Moyers

Treatment of SPS Matters Under NAFTA  (Difficult reading but there are very important statements in it regarding interpretations of international agreements by tribunals.)


Case in Point - Cross Border Trucking

While doing some research for the section on Harmonization of laws between Mexico, Canada and the U.S., I went back to the 107th Congress in 2001 to search for information the opening of the border for Mexican trucks beyond a 20 mile border area.   Apparently a NAFTA tribunal ruled that the U.S. border between Mexico and the U.S. must be opened for cross-border trucking.  

With the above as background, the significance of Vincente Fox's Address to Congress in the House of Representatives on September 6, 2001 becomes crystal clear.  The NAFTA Agreement, Chapter 11 gave Vincente Fox - and in fact all foreign firms the power to bankrupt our country through the Kangaroo Court process of the NAFTA tribunals.


Vincente Fox:

"Years ago, the United States Congress faced a difficult decision and chose to vote in favor of a greater integration with Mexico through the North American Free Trade Agreement.

   The partnership between Mexico and the United States is still incomplete. There remain many unresolved issues that must be dealt with in order to achieve our common goals as partners. One of these goals is an issue which this great body will soon consider and which entails an important obligation under NAFTA; it is the issue of access to the United States for Mexican trucks. For this, as in many other items of our common agenda, we need your trust. Trust will allow both countries to comply responsibly and maturely with their obligations to one another."


Fox got what he wanted from the U.S. Congress as it pertains to Mexican Trucking despite U.S. laws on truck and driver safety because of a decision by a NAFTA Chapter 11 tribunal.




From Senator Byron Dorgan's testimony - Congressional Record - Pages S7297 & S7298


   The North American Free Trade Agreement, which went into effect in January 1994, stipulated that the longtime U.S. restrictions on Mexican trucks be lifted.

   Under NAFTA, by December 1995, Mexican trucks would be allowed to deliver loads all

[Page: S7298]
over the four U.S. border states--California, Arizona, New Mexico and Texas--and to pick up loads for their return trip to Mexico. U.S. trucking firms would get similar rights to travel in Mexico. And by January 2000, Mexican trucks would be allowed throughout the United States.

   However, bowing to pressure from the Teamsters union and the insurance industry, President Clinton blocked implementation of the NAFTA provisions. The Mexican government retaliated by imposing a similar ban on U.S. trucks.

   As a result, the longtime status quo continues: Trucks from either side must transfer their loads to short-haul "drayage'' truckers, who cross the border and transfer the cargo again to long-haul domestic trucks.

   The complicated arrangement is time-consuming and expensive. Mexico estimates its losses at $2 billion annually; U.S. shippers say they have incurred similar costs.

   In 1998, Mexico filed a formal complaint under NAFTA, saying the U.S. ban violated the trade pact and was mere protectionism. The convoluted complaint process lasted nearly six years, until a three-person arbitration panel finally ruled Feb. 6 that the United States must lift its ban by March 8 or allow Mexico to levy punitive tariffs on U.S. exports.


   The planned border opening to Mexican trucks will pose a big challenge to U.S. inspectors, who will check to be sure that trucks from Mexico abide by stricter U.S. truck-safety regulations. Here are some of the differences:

   Hours-of-service limits for drivers--In U.S.: yes. Ten hours' consecutive driving, up to 15 consecutive hours on duty, 8 hours' consecutive rest, maximum of 70 hours' driving in eight-day period; in Mexico: no.

   Driver's age--In U.S.: 21 is minimum for interstate trucking; in Mexico: 18.

   Random drug test--In U.S.: yes, for all drivers; in Mexico: no. Automatic disqualification for certain medical conditions in U.S.: yes; in Mexico: no.

   Logbooks--In U.S.: yes, standardized logbooks with date graphs are required and part of inspection criteria; in Mexico: a new law requiring logbooks is not enforced, and virtually no truckers use them.

   Maximum weight limit (in pounds)--In U.S.: 80,000; in Mexico: 135,000.

   Roadside inspections--In U.S.: yes; in Mexico: an inspection program began last year but has been discontinued.

   Out-of-service rules for safety deficiencies--In U.S.: yes; in Mexico: not currently, program to be phased in over two years.

   Hazardous materials regulations--In U.S.: a strict standards, training, licensure and inspection regime; in Mexico: much laxer program with far fewer identified chemicals and substances, and fewer licensure requirements.

   Vehicle safety standards--In U.S.: comprehensive standards for components such as antilock brakes, underride guards, night visibility of vehicle; in Mexico: newly enacted standards for vehicle inspections are voluntary for the first year and less rigorous than U.S. rules.


From the Congressional Research Service:

The NAFTA tribunal gave Congress a choice:  Either pay Mexico $2 BILLION dollars or pass legislation to allow Mexican trucks into the U.S. despite the driver and truck safety issues.  

The issue with Mexican cross-border trucking is only one small issue.  Every American law and regulation is under attack or potentially under attack.  So why wouldn't Congress cancel the NAFTA agreement?   Even Pollyanna would be able to figure this one out.  Consider the level of corruption in Congress over the past 6 years - one Congressman in jail, another one or two others on the way, $100,000 found in a freeze of one, and that's not all.  Also consider the use of earmarks as buy-offs for Congressional votes.  

Now consider what Senator John McCain put a statement into the record describing what's happening in congress with the Conference committees.  Conference committees resolve the differences between House passed legislation and Senate passed legislation to produce a single bill for consideration.      

John McCain's statements in the Congressional Record:  

Congressional Record



Mr. McCAIN. Mr. President, I ask my colleagues, how much longer are we going to let the appropriators subordinate the jurisdiction and responsibilities of the authorizers? Didn't most of us think the multi-year highway funding legislation, known as TEA-21, would essentially be the law of the land through fiscal year 2003 with respect to highway funding formulas and state apportionments? I guess we were wrong, given the appropriations reprogramming maneuvers.

   Let me again quote from the Wall Street Journal:  "The negotiators made wholesale changes in the priorities set in the highway act, substituting projects they favor for the ones preferred by the House and Senate transportation committees that wrote the highway law.'' This is precisely why no projects should be earmarked by either the authorizers or the appropriators and we should instead allow the states to fund the projects that meet the legitimate transportation needs of their states.

   Mr. President, the Revenue Aligned Budget Authority--RABA--funds mentioned in the article are to be distributed proportionately to the states through formula apportionments and to allocated programs. This conference report represents a fundamental departure from that approach.

   To pay for some of the report's many earmarks, $423 million will be redirected from state apportionments, meaning the states lose 10.7 percent of RABA funds from the regular formula program. Further, another $423 million will be redistributed from allocated programs in a manner in which the appropriators have selected programmatic winners and losers. In fact, 24 of 38 highway funding programs will receive none of the funding under RABA they were to receive before the appropriators' stroke of pen. But again, if you have the good fortune to reside in a state with a member in a leadership position on the DOT Appropriations Subcommittee, you are among the winners in this appropriations bill lottery. I ask unanimous consent that two charts prepared by the Federal Highway Administration to show the impact on each state and the allocated programs through the RABA redistributing work of the appropriators be printed in the RECORD at this point.

   There being no objection, the material was ordered to be printed in the RECORD, as follows:

Note the amount slipped in by the Conference Committee for "National Corridor Planning & Devel. & Coord. Border Infrastructure Pg.


 Michigan as Canada's Dump


  Background From Michigan State University

The Wasting of Michigan

In 1986, a waste treaty between Canada and the U.S.signed by American lawmakers concerning the Transboundary Movement of Hazardous Waste.  Under the terms of this treaty, the EPA is to receive notification of these shipments, and then would have 30 days to consent or object to the shipment. Since 1986 Canada has shipped its garbage to Michigan to be dumped into landfills and the provisions of this treaty have never been enforced.  But now is the time for them to be enforced and stop the importing of Canada's garbage.

As of January 1, 2003, the Canadian city of Toronto, Ontario started to ship one hundred percent of its garbage into the landfills of Michigan.  In 2003, Toronto exported garbage at a rate of 7.2 tons per minute.  Garbage trucks from Toronto run seven days a week twenty-four hours a day, so at the rate of 7.2 tons per minute it works out to be that Michigan imports 10,368 tons of Toronto's garbage per day.  But it wasn't always like this, Governor John Engler and his administration turned garbage into a growth industry.  The state lowered the liability standards for landfill owners and also provided tax-free financing for new facilities.  The result of these changes lead to too many landfills and not enough garbage to fill them.  So the landfill owners lowered their prices and searched even harder for garbage. Today, Michigan's private landfills charge ten to fifteen dollars per ton to dump while other landfill owners in neighboring states charge twenty five to fifty dollars per ton.  Toronto did the math and realized that it is cheaper to haul its garbage 300 miles and dump it in Michigan then it is to dump it close to home. And on top of that, Michigan has eliminated funds for recycling initiatives and is now the third largest importer of trash.  Toronto's trash isn't being dumped in a remote part of the state either.  Carleton Farms Landfill in Sumpter Township in southwest Wayne County, where the population is 11,856, receives one hundred percent of Toronto's garbage.  Our laws that Michigan implies on our garbage do not imply on Toronto's garbage.  Our laws prohibit us from discarding bottles and cans but allow Toronto and others from out of state to do it. Another problem with importing trash is the havoc it wreaks on our roads.   Toronto does not pay so much as a nickel for repairing the roads that it destroys. The constant flow of trucks creates both noise and air pollution and also lowers property values.  Although American lawmakers have decided to enforce the treaty from 1986, politicians in Lansing, Michigan and Washington still have not found a way to ban imported waste that doesn't violate the international treaty or does not unconstitutionally restrain trade.

Inspections of the garbage trucks, however, have been stepped-up since January 1, 2003.  The Department of Environmental Quality conducts inspections at the border, which include radioactive detecting equipment, and follows the trucks to the dump to ensure proper disposal.  Since September 2003 seven trucks have been turned back because equipment detected radioactive material in the waste.  One truck, which was dripping blood, was found to be illegally taking medical waste to Carleton Farms Landfill.  The Drug Enforcement Agency reported one of the largest drug busts in Michigan in September 2003.  A garbage truck was discovered to be smuggling substance, including one ton of illegal drugs valued at nine million dollars, from Toronto to Michigan.  Also, in September 2003, the Asian Long-Horned beetle was found in Woodbridge, Ontario.  The beetle is extremely destructive to hardwood trees, particularly maple, poplar, and willow trees.  The Michigan Department of Environmental Quality found that more than twenty-five percent of trash being imported from Toronto contained yard waste.  The Asian Long-Horned beetle could present a serious threat to Michigan and the tourist business if let free to roam in the wilderness of Michigan.  Citizens all around Michigan have joined in the battle to stop the importing of trash.    Over 165,000 Michigan residents from all of the 83 counties have signed the online petition to stop Toronto's trash.  In Sumpter Township, residents have started a group called REACT- Residents Enraged Against Canadian & out-of-state Trash.  REACT have asked Governor Granholm with urgent appeal for a few things to start: a posted and enforced 35 mph on the road leading to the Carleton Farms Landfill; a posted and enforced no passing zone; and an increased enforcement on the weight limits of the trucks.

While there are numerous arguments in opposition towards importing garbage from Canada, there are arguments that support it also.  The import/export of garbage is a two-way street.  Michigan imports garbage from Canada and in return we export our hazardous waste to Canada.  In 2001, Michigan exported 53,000 tons of hazardous waste to Canada.  Some politicians say that we need to be careful in what we ask for because we may just get it.  Another argument is that the recently increased inspections of the trucks importing garbage from Toronto have indicated that Canada's garbage is cleaner than the garbage generated by Michigan residents.  Canada's garbage contained less prohibited hazardous wastes and had a lowered rate of recyclable materials.  Ontario has a more efficient way of sorting out garbage for recyclable materials than Michigan.  These inspections demonstrate that the landfills filled with Canada's garbage are generally less contaminated.  Importing garbage from Canada is wrong.  A country that makes the garbage should also be responsible for the disposal of that garbage.  The U.S., and especially Michigan, should not be responsible for disposing of Canada's garbage at our expense.  The taxpayers are repairing the roads that are being prematurely destroyed by trucks hauling garbage that is not ours.  It is our water and air that is being polluted by the hundreds of Canada's garbage trucks and millions of tons of Canada's garbage.  We will soon no longer need Canada to dispose of hazardous waste due to the proposition of using the Yucca Mountains in Nevada as a dump site.  And as for saying that Canada's garbage is cleaner than ours, who cares it is still garbage.  The U.S. needs now more than ever to enforce the treaty that was signed in 1986.  Since January 1, 2001, there has been a 40% increase in the amount of garbage that is being imported from Toronto.  Michigan should not be the dumpsite for another countries garbage.  Michigan's air and water are being polluted by garbage that is not ours.  American lawmakers need to stop the two-way street that is destroying the Great Lakes state.      



Michigan's Landfills

"Our state legislators can stop cloning, but not incoming trash due to NAFTA trade policies"

In Michigan, criticism grows over Toronto's export of trash

"The United States and Canada have a free-trade agreement that nearly erases the border for commerce. The US Supreme Court has repeatedly ruled that garbage is a commodity to be treated like any other commercial product."


Trash has migrated from Toronto to this three-stoplight town for years. Until this month, Sumpter shared the load with another Detroit-area landfill and one in Vaughan, Ontario. But when the Ontario site was closed, Toronto signed a new agreement with Republic Services, the owner of the landfill here, and the number of trucks that come here has almost quadrupled .

The landfill, Carleton Farms, will be getting about 1.2 million tons of trash a year. The added trash is likely to be enough to move Michigan to second place among states that import trash, up from third, ahead of Virginia and behind Pennsylvania.

...But little can be done. Under the North American Free Trade Agreement, the movement of trash across the border is little different from the interstate movement of trash, which courts have ruled is protected by the Constitution's interstate commerce clause.

One way out, Mary Dettloff, a spokeswoman for the governor, said, may be a suggestion by some environmental groups that the Toronto trash meet the same standards required of Michigan trash. Unlike Toronto, Ms. Dettloff said, "we compost all yard clippings and we have a mandatory bottle and can law here."

...There is money in trash for Sumpter, for Republic and even for Bill Gates, Microsoft's co-founder and Republic's largest shareholder.

For Mr. Gates, trash has been a good hedge in a bear market. Since the beginning of 2000, while Microsoft stock has fallen 52 percent, Republic stock has gone up 45 percent. Another high-profile shareholder is Wayne Huizenga, the Miami Dolphins owner and one of the founders of Republic, which was started in the mid-1990's. Mr. Huizenga was Republic's chairman until last month.


U.S. firm suing over failed Toronto trash plan

"A Pennsylvania investor has served notice that he plans to use NAFTA to sue Canada for $355 million, alleging Ontario unfairly shut down a plan to have a mine serve as a landfill site for Toronto garbage.

Vito G. Gallo alleges the Ontario government's 2004 move to ban dumping at the Adams Mine site in Kirkland Lake was tantamount to expropriation, The Globe and Mail reports.

"The intent of Bill 49 was clear and beyond dispute: to shut down the Adams Mine property as a solid waste landfill site and to put the Enterprise out of business," the NAFTA filing says in documents served on the office of Canada's deputy attorney general several months ago.

Gallo argues Canada breached a NAFTA clause that allows investors in Canada, Mexico and the U.S to sue other NAFTA members if their investments have been unfairly damaged by law or regulation."


The investors in any country that has a 'free trade' agreement with the United States is free to dump on the United States - both figuratively and literally.  And U.S. investors can dump on them.  Is it any wonder that our government is preparing for a long war on terrorism?