Mr. Speaker, I rise pursuant to a question I asked of the Minister for International Trade in the House last week with respect to the decision taken by the government this summer having to do with the suit brought against the government by Ethyl Corporation under the conditions of NAFTA, whereby Ethyl was suing the government for $350 million on the basis that the government's decision to ban MMT, the gasoline additive, would cost Ethyl Corporation that amount of money in anticipated profits from the sale of MMT.
This was done pursuant to chapter XI of NAFTA in which we find one of the more insidious aspects of NAFTA, something that was not included in the Canada-U.S. Free Trade Agreement but which found its way into NAFTA. That is an investor state dispute settlement process whereby investors are able to directly sue governments in a way that they were never previously able to do with respect to trade disputes.
In the past, prior to NAFTA, a corporation, an American corporation in this case which felt that it had been unfairly treated by the Canadian government, would have had to persuade its own government to enter into a trade dispute settlement process with Canada. This now with NAFTA is not the case and Ethyl was able to proceed to sue the Government of Canada under chapter XI.
What happened this summer was that the government capitulated, settled out of court with Ethyl, paid $13 million and declared that it had been wrong on MMT.
This raises a couple of concerns. One is the environmental concern with respect to MMT, but the one that I am more concerned about today is the way in which the response of the government to the suit by Ethyl Corporation points out the weaknesses of NAFTA. I believe this is why the government settled out of court.
The government did not want it to go the full length of the process under chapter XI because had it gone the full length of the process and had the ruling gone against the government, as I think the government anticipated it might have, this terrible fundamental flaw in NAFTA would have been bared for all to see. It would have been revealed to be the kind of mistake that it truly is.
Instead of allowing this to proceed and having that revealed for all Canadians to see, the government decided to settle out of court, blame its decision on another ruling having to do with the internal trade agreement between the provinces in Canada and duck altogether the possibility that this terrible weakness in NAFTA would have been revealed.
I asked the minister of trade if in that light, having learned this about the agreement, he was now prepared to say that the government would not be pursuing a multilateral agreement on investment which included this investor state dispute settlement process because the MAI, as it is currently outlined, would extend this provision to investors in all OECD countries. Instead of just American corporations having the power to bring suit against the government, it would be all countries of the OECD.
What kind of answer did I get? The minister got up and said “This never went to a NAFTA dispute settlement panel” and then she sat down. I never said it went to a NAFTA dispute settlement panel. That is an entirely different matter, an entirely different aspect of the agreement.
What I said had to do with the investor state dispute settlement process and I never received a decent answer from the minister on that.