U.S. Water News Online
MONTPELIER, Vt. -- A Canadian company wants to open a new
plant in Claremont, N.H., to bottle fresh water from a source in
But if Vermont wants to limit how much water the company takes, it
may run afoul of the North American Free Trade Agreement.
States around the country are growing increasingly worried about
the threats posed to their laws and regulations by the secret
tribunals that resolve disputes in international trade. Experts say
everything from environmental rules to the licensing of nurses and
other professionals could be affected.
"Free trade agreements are to state sovereignty and economic
development what global climate change is to the environment and
natural resources," said state Sen. Virginia Lyons, D-Chittenden. "I
think it's a really significant issue for our state, and for every
state in the country."
Vermont is one of seven states to establish committees to study
the possible impacts of international trade on their laws.
Assistant Vermont Attorney General Elliot Burg said NAFTA and
other trade agreements have opened up a path for international
companies that want to circumvent state laws they don't like.
"The issue is not really fair treatment or equal treatment" of
domestic versus foreign companies, Burg said. "It's really, `We don't
like the laws you're passing."'
States are beginning to take notice.
Vermont, New Hampshire, Maine, Massachusetts and New Jersey trade
officials recently huddled in Portsmouth, N.H., to discuss the issue.
The National Conference of State Legislatures, which represents
all 50 state assemblies, issued a policy paper in August saying it
was concerned about lack of state input on international trade
In one famous case, California sought to ban the gasoline additive
MTBE in 1999 after the chemical was found to have contaminated
groundwater. A Canadian firm called Methanex filed a $970 million
claim with a NAFTA tribunal, saying the figure represented the money
it stood to lose from lost sales in the state.
Methanex lost on that one; in fact, Peter Riggs, director of the
nonpartisan Forum on Democracy and Trade, based in New York and
Washington, said no trade tribunal has ruled against a U.S. state law
to date. But Riggs said some states have pulled back from passing
aggressive environmental and consumer protection laws for fear of
One trade dispute in which a private company won targeted the
Mexican state of San Luis Potosi and the town of Guadalcazar, which
wanted to shut down a toxic waste dump that had been bought by a U.S.
company, Metalclad. Metalclad argued it had won permission from the
Mexican federal government to reopen the dump and resume using it.
The trade agreements have the potential to affect a wide range of
state laws, experts said:
-- Product protection: Vermont, America's top maple producer, has
strict laws governing the purity and grading of maple syrup. They
could be construed as interfering with a Canadian firm's desire to
sell its own syrup in the state.
-- Professional licensing: Licensing requirements for registered
nurses, for example, are not the same everywhere. If a state sought
to block a traveling nurse company from bringing in foreign-trained
nurses on the grounds their training didn't meet state requirements,
that, too, could be ruled out of bounds by a trade tribunal.
-- Government purchasing: Some states have laws that call on their
agencies to shop in-state for food for state cafeterias, paper or
other products. Such laws could be ruled discriminatory by an
international trade tribunal. Even state Medicaid "preferred drug
lists," aimed at securing lower prices for the pharmaceuticals bought
by public health programs, could be a target.
Riggs said that when different jurisdictions disagree about
trade's impact on local decision-making, it makes it harder to adopt
laws as tough as the local jurisdictions might want.
In the case of the Canadian firm's plans to take Vermont water,
neither officials with Ontario-based Ice River Springs nor the owner
of Stockbridge-based Pristine Mountain Springs -- the company that
would sell the water to it -- returned calls seeking comment.
Concern has been growing in Vermont in recent years about taking
of groundwater by bottled water companies. The Legislature passed an
interim law in 2006, and is expected to consider further tightening
regulations during the session that begins in January.
If such an effort ends up impinging on Ice River Springs' plan,
Riggs said. "That would be the basis for a possible claim" before a
NAFTA tribunal. "That is not to say that the claim would necessarily
succeed, but that would be the basis for a claim."
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