U.S. chemical giant, Dow Agrosciences, has filed the first round of NAFTA Chapter 11 paperwork to sue Canada over a recent province-wide ban on residential use of pesticides.
Embassy Magazine reports:
Dow Agrosciences insists Quebec's province-wide ban on the residential use of weed-killing chemicals breaches legal protections owed by Canada to U.S. investors under the NAFTA.
The U.S. company, which has an extensive manufacturing and sales operation in Canada, wants to be compensated by the Feds for losses incurred to its star product, 2,4-D, one of the most popular chemical ingredients used in commercial pesticides.
Canadian radio station, CJAD shares reactions:
It's repugnant," says Kathleen Cooper of the Canadian Environmental Law Association, who argues the company is taking advantage of the NAFTA clause Chapter 11 to try to circumvent the courts and to try to stop pesticide bans from spreading.
"This is legislation that's been put in place by democratically elected governments."
"If they are successful, they may be able to force Quebec to overturn the law."
This use of NAFTA's Chapter 11 to challenge domestic regulations would by no means be new. Canada is still defending itself against a $100 million Chapter 11 investor claim brought by U.S.-based Chemtura Corporation. We recently posted information about a coming U.S. investor challenge to Canada’s health care policies. Public Citizen issued a report examining 50 such NAFTA “investor-state” cases brought in Canada, the United States, and Mexico.
Embassy reporter Luke Eric Peterson shares his take on the motivations behind the recent increase of U.S. industry challenges to Canadian domestic regulations:
Such regulatory moves [Ontario following Quebec’s lead in banning certain pesticide use] will eventually draw wider attention and scrutiny in other jurisdictions—including the far more lucrative U.S. market. If the U.S. chemical industry hopes to avert a domino effect, it may need to borrow a page from the War on Terrorism tactics book: fighting tougher regulation abroad, so they don't have to fight it on the homefront.