Unlikely Nafta battleground
NOVA Scotia, a farflung peninsula in the North Atlantic seems an unlikely place for an international trade dispute. But an American company’s scuttled plans to build a quarry here have turned these quiet fishing grounds into a case study of the kind of thorny disputes that threaten to derail the North American Free Trade Agreement.
Digby Neck was chosen by a Delaware company, Bilcon, to be the site of a large stone quarry in 2002. Lured here by the government of Nova Scotia, Bilcon planned to blast the basalt, then load 40,000 tonnes of it onto a ship that would and head to New Jersey, where it would be mixed into concrete for roads, bridges and other projects.
The quarry was expected to operate for 50 years and create about 30 local jobs in Digby Neck. Instead, the project was killed by the Canadian government after a years-long review concluded it would damage the environment. But Bilcon, which had invested significant sums trying to get the project underway, seized on an obscure Nafta provision allowing foreign companies to sue gov- ernments for unfair treatment.
Bilcon sued Canada – and won. The company is seeking as much as $443 million, plus costs. While the Canadian government can fight to lower that sum, Nafta provides no appeal mechanism to reverse the underlying legal decision.
The ability of foreign companies to sue governments is one of the most contentious issues in the clash among the United States, Mexico and Canada over how to rework Nafta. The Trump administration views that section of Nafta as impinging on national sovereignty, saying it undermines government decision-making. The United States is pushing for dramatic changes in that provision that would roll back the ability of companies to bring cases under Nafta. Those changes are fiercely opposed by businesses, Mexico and Canada.
It is the latest in a series of demands by the United States that have pushed the trade talks to the brink of collapse. President Trump campaigned on reworking the pact, and negotiators are meeting every two weeks to hammer out changes to the deal. But as recently as last week, Trump continued threatening to walk away from the pact, an outcome that could disrupt corporate supply chains that span the continent and put at risk millions of jobs that are supported by commerce among the three nations.