Canada Tries to Block WTO Jurisdiction Over its Water

by Mark Bourrie

Last week the government announced that it would put a ban on the export of Great Lakes water into the International Boundary Waters Treaty Act, legislation that created the Canada-U.S. International Joint Commission on Boundary Waters.

Concern over the possibility of WTO rules forcing Canada into allowing water exports has been growing here since the warmer weather of the last decade reduced the levels of the Great Lakes to record lows -- about three feet below those of 1980.

Earlier this year, the International Joint Commission, made up of U.S. and Canadian representatives, called for a moratorium on Great Lakes water exports.

"Canadians are very concerned about the future of this country's fresh water," Foreign minister Lloyd Axworthy said.

"They expect this important natural resource to be protected. The amendments that we have tabled today on the international front are fully consistent with these desires to keep our water resources safe from bulk water removal. And it does so in a way that is comprehensive, environmentally sound, and consistent with international trade obligations.

"We know there are some people who believe that an outright export ban would be the way to protect fresh water. Frankly, this is simplistic and wrong.

" In fact, if one was to follow that particular recourse, it would make the resource of water more vulnerable, not less vulnerable. It would make it harder, rather than easier to protect. This approach basically ensures that fresh water is protected before it becomes an issue of exporting."

Yet, the same day that the new legislation was announced, the federal government lashed out at British Columbia for clinging to a ban on water exports, saying the approach makes Canada vulnerable to trade challenges at the WTO.

An outright ban on the export of bulk water is "simplistic and wrong in its approach," Axworthy said.

"Much of our nation's history and prosperity stems from the extraction of natural resources," environment minister David Anderson said, "But there has always been a distinction, a line drawn, as far as our fresh water supplies are concerned.

"How do we prevent narrow commercial interests from undermining the goals of Canadians? Canada needs to shut off the taps of bulk removals at their source, and not at the border. Our rivers, lakes and watersheds are at the heart of our national identity."

On Nov. 29, federal and provincial ministers of the environment will meet in Kananaskis to discuss methods of protecting Canada's fresh-water resources.

The Canadian government will ask the provinces to sign a voluntary "national accord" that reads, "We agree: To prohibit the bulk removal of water from major drainage basins, including for the purposes of export.Each jurisdiction will determine its own approach."

Maude Barlow, chairwoman of the Council of Canadians, an anti- globalization group based in Ottawa, says the Canadian federal government "is trying to pass the buck on its responsibility.

"A voluntary accord would be just that -- voluntary -- and would not bind any province in any meaningful way to protect its water resources now or in the future.

"As well, although responsibility for fresh water comes largely under provincial jurisdiction, international trade is the exclusive domain of the federal government. Only the federal government has the jurisdiction to impose a meaningful national ban on water exports and only the federal government can deal with the trade threat it has unleashed on the provinces," she said.

"The WTO also poses a risk to Canada's water. Article XI of GATT specifically prohibits banning the export of a tradable commodity. GATT does have a provision to allow countries to use certain measures, such as export taxes, to protect natural resources, but these are prohibited under NAFTA," she said.

"Once you start exports of water, bulk exports, there is no turning off the tap," he said. "If you start that, you have to have a clear idea of what the situation may be 50, even 100 years hence and the impact upon Canadian interests at that time."

The federal government is now defending itself against a 10.5- billion dollars lawsuit brought by U.S.-based Sun Belt Inc., under provisions of the North American Free Trade Agreement. Sun Belt's Canadian partner was one of six companies licensed to export water by the government of British Colombia province during the 1980s when a drought in California made tanker shipments down the coast financially viable.

However, after a change in government, British Colombia imposed a moratorium on water exports before any could be shipped and the U.S. firm is now trying to win damages for lost business opportunities.

Another firm, Gisborne Lake Water Exports, is considering suing the Canadian government for working with the provincial government in Newfoundland to kill its plan to set up a tanker terminal and water bottling factory to tap a lake on the southeast part of the island.