ON JAN. 1, 1994, the governments of the United States, Canada and Mexico implemented a new policy known as the North American Trade Agreement in order to regulate trade between the three nations. Though it swore a devotion to the environment and humanitarian concerns, NAFTA soon ruled to fine Mexico for the country's refusal to allow a toxic waste disposal company to open a facility in San Luis Potosi. With this decision, NAFTA began to contradict its ideals and use its laws to act against the very people that it claimed to protect.
In January 1997, the U.S.-based waste disposal company Metalclad attempted to reopen an old facility in San Luis Potosi Mexico that had a history of contaminating local water. This was less than appealing to the local government for obvious reasons, and soon the governor of San Luis Potosi declared the sight in question part of a 600,000 acre ecological zone, and on these grounds denied Metalclad the opportunity to open their facility.
Metalclad jumped to defend itself, claiming that this zoning constituted a seizure of their company property. In accordance with NAFTA, the Mexican government is held fiscally responsible for any losses incurred by Metalclad due to the denial of land.
Though Metalclad was not awarded the $90 million it requested, a NAFTA tribunal did elect to grant them $16.7 million in compensation. Mexico appealed this ruling with the support of Canada in February of this year, and a final ruling on this appeal has yet to be reached.
Metalclad needs to be held accountable for neglecting to investigate the area's environmental conditions. Instead, the special rights awarded to these corporations and their investors could result in the Mexican government being forced to carry the risks and costs of a financial endeavor with which they essentially are unaffiliated.
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Demanding that the Mexican government make financial compensation to Metalclad because it refused to let the corporation dump toxic waste in the country sends a signal to the world that NAFTA favors profits over both the environment and the people that live in these areas. When examining this ruling, one cannot help but note a certain implicit strain of that good old American elitism, as Mexico is viewed as an acceptable dumping ground for the waste left behind by American corporations. Furthermore, the people of this region are given no say in a decision that could have an astronomical and negative effect on their lives. Although the Metalclad facility is unlikely to open and these particular people are most likely safe, there's nothing to ensure that this will happen next time. By awarding money to Metalclad, NAFTA is sending a message that the behavior displayed by this corporation is acceptable. It is not.
NAFTA's ruling to award money to Metalclad is a flagrant injustice, and the American public cannot merely sit back and allow it to occur without at least voicing dissent. Although it is a common assumption that individuals have no power to influence the decisions of high-ranking politicians, letters and petitions written to government officials are taken into account by many of our politicians who - let's remember - were elected to represent us. The Metalclad case is still in the process of appeal, and it is time for the American public to make a statement and stand up for the rights of those whom our country is helping to punish unfairly. The largest problem with our government today is that too few citizens are active in it. The United States is a democracy for a reason, and its people need to exercise their right to free speech.
The first step that NAFTA needs to take is to grant a full repeal of its ruling that demands Mexican payment to the Metalclad corporation. NAFTA also needs to review the objectives that it set out at its start, and from there revise its policies to bring its action into alignment with its ideals and prevent this kind of injustice from occurring in the future.
Free trade is a wonderful thing and needs to have an organization like NAFTA to support and regulate it. But this organization needs to have a moral foundation as well as an economic one, and the needs of business can no longer be placed above all environmental and human considerations. NAFTA is not the evil policy that the political left makes it out to be. However, this situation exposes crucial weaknesses and flaws in its make-up. These issues need to be confronted if it is to continue to be permitted to govern trade in North America.
(Laura Parcells is a Cavalier Daily viewpoint writer.)
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