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Great Lakes Article:

THE TAKING OF CANADA'S WATER--THE FINAL CHAPTER: Our water won't be safe unless it's exempted from NAFTA
By Wendy R. Holm, P.Ag.

posted 12/22/2002

What Canada does over the next six months or so in the water/trade debate will forever define us as a people and as a nation.

Water is the most critical policy arena of the century. Our water resources have been under threat ever since former Prime Minister Brian Mulroney appointed Simon Reisman as Canada's chief trade negotiator in January 1986.

Reisman had previously been a lobbyist for the proposed Great Recycling And Northern Diversion (GRAND) Canal project. His appointment came a scant eight months after his speech to the Ontario Economic Council in which he said that the price of free trade with the United States was the massive development of Canadian water exports. He said that he had "personally" suggested the idea to leaders of government and business on both sides of the border, and that he had "been greatly heartened by the initial response."

Following his appointment as Canada's trade negotiator, Reisman said, "In my judgment, water will be the most critical area of Canada-U.S. relations over the next hundred years. How quickly this issue develops and how much attention is paid depends on how critical the American water shortage is."

Reisman's U.S. counterpart at the trade table was Clayton Yeutter, a man with an extensive background in international agriculture, a Ph.D. in international water law, and a long-standing interest in Canada's water. Yeutter was closely associated with Richard Nixon during the U.S. Army Corps of Engineers' covert mapping of Canada's northern water resources and a member of the Committee to Re-elect the President in 1972.

The U.S. House Speaker at the time was Jim Wright, a Texas Democrat and one of the most influential politicians in the U.S. In his 1966 book, The Coming Water Famine, Wright noted: "There is to the north of us a stupendous supply of water...enough to satisfy our predictable wants for years to come. We need the water. We need to develop a means of getting that water."

Mulroney kept assuring Canadians that water wasn't even mentioned at the trade table, but it wasn't until John Crosbie took over as Trade Minister that the web of deception was spun in earnest.

The first lie remains a source of confusion to this day: "Water's not part of the agreement," said Crosbie in the spring of 1988, "and just to assure Canadians of that fact, we have introduced an amendment to the free trade legislation to specifically prohibit bulk water exports."

Slippery words. The free trade legislation Crosbie was referring to was not the free trade agreement, but merely the domestic enabling legislation that each party to the international treaty had agreed to enact "to give full force and effect" to the terms and conditions of the treaty. Neither country vetted the other's domestic enabling legislation, and nothing in either country's domestic enabling legislation changed the terms of the international trade treaty. Crosbie's "amendment" did nothing to address the problem.

In response, 14 knowledgeable Canadians, including me, jointly wrote the book Water and Free Trade (Lorimer, Toronto, 1988), released two weeks before the November federal election.

We were optimistic. But the rhetoric was heavy and the boys from Bay Street (the BCNI's Tom d'Aquino and friends) had lots of money and weren't afraid to lie. So Canadians were understandably confused. The Tories won the election. And the Free Trade Agreement (FTA) was enacted.

Then, several years later, came NAFTA. Same problems. Same results. This time, the U.S. chimed in, in the person of Clayton Yeutter, who made his now infamous contribution to the discussion:

"Water in Canada's free flowing rivers and lakes," he asserted, "is not subject to the trade agreements. But, once water becomes a good of commerce and enters into international trade, all of the terms of the trade agreement apply, including national treatment."

What Yeutter meant was that, each time water becomes a good of commerce, all terms of the trade agreement apply to each export contract so entered into. For example, trees standing in a forest are not subject to the trade agreements, but a wooden chair made in Vancouver and sold to a buyer in Seattle is. If chairs were only manufactured by the provincial government, and if American buyers wanted to purchase chairs, the Canadian government couldn't discriminate against them in favour of a Canadian buyer; we would have to give the Americans equal access to the chairs; that's what national treatment is all about. It's a simple concept that applies equally to water, particularly so because water licenses (including those for irrigation) are issued by governments for compensation.

Yeutter's candid statement should have exposed NAFTA's threat to our water, but instead it spawned the feds' silly "as-long-as-we-don't-call-water-a-good-it-won't-become-one" claim, and the equally absurd reassurance that our water is safe "as long as we don't export the first drop."

The truth is that water is "in" the FTA and NAFTA because it's not "out" (not explicitly exempted, as are raw logs and certain species of fish from the Maritimes), and because "water"--all natural water other than sea water, including ice and snow--appears as Item 22.01.9 of the Harmonized Commodity Coding System of the GATT, to which the FTA and NAFTA refer for their definition of "goods." The rights are there, and the tap is open. In perpetuity. Period.

Eight years ago, a colleague of mine, a lawyer in Alberta, was told by an executive with one of the large pipeline construction companies that they were laying two parallel pipelines.

"What for?" she asked.

"One for natural gas and one for water," was the prompt reply.

Last May, Bill C-6 (An Act to Amend the International Boundary Waters Treaty Act, the federal government's only response to the water/trade crisis) received second reading. When implemented, C-6 will establish water export permits at the pleasure of the Minister of International Trade, setting the stage for transcontinental water sharing.

A few days before the G-8 Summit in Genoa, U.S. President George W. Bush finally said he wanted to talk about water. "I look forward to discussing this with the Prime Minister," he said, adding he would be open to "any discussions" about a possible continental water pact--along the lines of the talks now under way between Canada, the United States and Mexico on energy--to pipe Canadian water to the parched American southwest.

* * *

There is only one solution to the water/trade problem, and that is for the Canadian government to demand an exemption for water under the goods, services and investment provisions of NAFTA--and threaten to withdraw from the deal if we don't get it.

Trust me: the Americans will grant the exemption before they walk away from NAFTA. But only if we make it their only option.

(Wendy R. Holm, an agrologist, agricultural economist and journalist who lives on Bowen Island, British Columbia. She was recently named Agrologist of the Year 2000, in part for her work on the water/trade issue. She has written and spoken extensively on the policy implications of water's inclusion in the trade agreements for over a decade. She originally wrote a longer version of the foregoing essay for B.C.'s Country Life magazine.)

Taken from The CCPA Monitor, October 2001

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