NAFTA: A Familiar Hurdle for California's Environmental Regulators
Last Thursday, California, yet again, proved itself to be a laboratory of innovation, by becoming the first state in the nation to require low-carbon fuels.
The Associated Press reports:
California state legislator Fran Pavley led the fight to reduce emissions in California by introducing the Global Warming Solutions Act (AB 32) which Governor Schwarzenegger signed into law in 2006. However, the Bush administration stalled implementation of this legislation with a variety of obstacles and it wasn’t until January 2009 that California was given the green light to fully implement the Global Warming Solutions Act.
International Business Times reports that Canadian trade lawyers are beginning to grumble about these new environmental measures possibly violating NAFTA and the WTO.
However, the state may have no business imposing such rules on oil produced in other countries, a Canadian lawyer said, and the provisions may violate international trade treaties.
"There's definitely a NAFTA case and a WTO case. There's no doubt in my mind about it," said Simon Potter, a partner at the McCarthy Tetrault law firm whose practice includes trade and competition law.
If a Canadian company were to, as Potter hints, file a NAFTA case, it would be the third major NAFTA investor case launched against California environmental regulations. The first major suit was in response to California’s ban on a harmful gasoline additive MBTE that was leeching into the water system. After five years, the case was finally settled with California’s ban intact. The California Attorney General’s office is yet again helping the federal government fend off a suit brought by Canadian mining company Glamis Gold over California’s mining regulations.
State legislators in California have objected in the past to the kind of backdoor preemption of state regulations encouraged in current trade agreements and have urged the federal government to consult with state legislatures about new trade commitments that could compromise states’ ability to regulate. This legislative session, Assembly Member Nancy Skinner introduced AB 1276 which would add more oversight to the process by which state commits to comply to certain provisions of future trade agreements.