Statement of Lori Wallach, Director of Public Citizen’s Global Trade Watch, on the Preliminary Decision in the NAFTA Chapter 11

Statement of Lori Wallach, Director of Public Citizen?s Global Trade Watch, on the Preliminary Decision in the NAFTA Chapter 11 Methanex Case Against California?s Ban on MTBE

(Today, a three-person North American Free Trade Agreement (NAFTA) trade tribunal released its preliminary ruling in a trade investment dispute between the Canadian company Methanex and the state of California. Methanex has filed a NAFTA claim for $1 billion over California?s decision to phase out the gasoline additive MTBE, which has contaminated California?s ground and surface water. The tribunal refused to make a final determination in the case but instead told Methanex to file additional information so it could make a decision. While the tribunal did not award Methanex the compensation it demanded, it also failed to uphold California?s right to safeguard its water.)

We have predicted for a year that the panel would throw the case in the name of political expediency to prevent it from boomeranging back upon NAFTA and the Free Trade Area of the Americas (FTAA), thus blowing them to smithereens. Yet when the panel had the opportunity, it did not chuck out this whole outrageous claim, but left the door open — not only in this case but, more important, for other corporations in other cases that could come before a different panel. This case is the very reason why we have fought so hard to rewrite NAFTA?s investment privileges for foreign corporations and oppose their expansion to the FTAA. Even if the Methanex panel eventually throws out this claim, until the NAFTA investment rules are changed, the threat of these attacks continue. Indeed, given all the political pressure, the panel sent a bad signal by not throwing out the entire case. (The narrow technical basis for the decision is especially alarming. The claim was not upheld immediately in part because Methanex does not produce MTBE itself, but rather makes one of its major constituent parts, forcing Methanex to show a higher standard of discrimination. The panel?s preliminary ruling implies that if Methanex had produced MTBE itself, it already might have won this outrageous case.)

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