NAFTA+chapter+11

**__NAFTA Ch. 11__** In 1989 Canada and the U.S started the Free Trade Agreement (FTA), it was an agreement not only about trade but also a way of protecting certain larger corporations from loss of product. Then in 1994 Mexico joined to create NAFTA, the North American Free Trade Agreement. NAFTA was created as a way of increasing Economic Globalization, where these three countries would trade “without boarders”, so that they could enforce corporate rights globally and lower taxes and tariffs between one another.
 * NAFTA**
 * Background**

Chapter 11 of NAFTA gives corporations or individuals the right to sue Mexico, Canada, or the United States for money lost if the government enforces laws— whether federal, provincial or state, or municipal—that affect the productivity of that company. This means that if a government stops the sales a product because of bad labour practices, bad environmental practices, unsafe materials and the company loses profit, it can sue the governments for the money they lost.
 * Chapter 11:**

There have been many cases where chapter 11 has been enforced upon governments with the outcome of them paying millions of dollars to specific companies.
 * Cases:**

In 1997, the Canadian government banned the import of MMT, a chemical that is toxic to humans. The U.S company that makes MMT, Ethyl Corporation, used NAFTA to sue Canada for $250 million for their profit losses. This resulted in Canada not only removing the ban but paying Ethyl Corporation $19 million.
 * Example One-**

A Mexican municipality refused a construction permit for the area of Guadalcazar, San Luis Potosi, which would create a hazardous waste landfill even after the construction had already been approved by the federal government. This resulted in Metaclad, an American corporation, being awarded with $15.6 million from Mexico when the NAFTA panel found that the municipality did not have the authority to ban the construction.
 * Example Two-**

While quite often countries end up having to pay corporations, sometimes the corporations lose the case. In December of 1999 the Canadian corporation, Methanex, sued the U.S for $970 million for the loss of profit from the State of California’s ban on “MTBE” — a harmful gasoline additive that pollutes well water  — that was to be legally effective on 31st of December 2002. The claim, however, was rejected and Methanex was forced to pay the U.S government $3 million.
 * Example Three-**

Whether the effects of NAFTA chapter 11 have been positive or negative has been highly debated since it was established, however most agree that with the ideas of today the chapter 11 has more negative impacts. Today we live in a world that is slowly turning “green”. Environmental concerns have started to shape our consumer economy. This means more pressure on the three governments to be “green” as well. However, governments can no longer make decisions easily when it comes to environmental or human rights laws for fear of being sued. Since there is little room for governments to act upon social issues they become reliant on the corporations to make good decisions. Corporate Social Responsibility is evident in some corporations but usually not in the big ones. Therefore the three countries end up in a sticky situation having to deal with the better product laws that the pubic wants and what NAFTA chapter 11 will allow them to do.
 * Effects**:

Chapter 11 is able to undermine efforts to make our countries better in term of human health and the environment.One major health and environmental concern is for the limited amount of fresh water left on the Earth. Since Chapter 11 has made it so hard for governments to improve laws on banning harmful toxins and chemicals (some of which end up in the water) it causes a serious threat to the fresh water. Since the implementing NAFTA the amount of maquilliadoras in Mexico have rose 15%. Through NAFTA corporations are encouraged to demonstrate poor labour practices. While some companies may benefit from NAFTA, it has been seen that Mexican farmers lose money when they try to keep up with the companies that continually lower their prices, which ultimately continues the race to the bottom.

NAFTA was used as a blueprint for the creation of the WTO, an even more powerful organization. The idea of the NAFTA courts was copied to make the Kangaroo Courts.
 * Other impacts: **