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Water definition at core of debate

December 31, 2009

In a Western Producer article discussing the possible impact of the North American Free Trade Agreement on Canada’s water supply, Steven Shrybman confirms that water is governed by NAFTA rules.

‘The fact is that water is an investment and a service category that is captured by the NAFTA,’ said Shrybman…

As an example, the bankrupt paper company AbitibiBowater is using Chapter 11 of NAFTA to sue the Newfoundland government over its decision to take back the company’s licence to have access to provincial water once it closed its plant, claiming loss of investment returns.

‘There is no argument that a NAFTA panel has jurisdiction to hear this case,’ Shrybman said in an interview. ‘Water is part of the agreement.’

The article notes that the real question is whether water will be considered a commodity that can be exported and to which American companies will be able to demand access under the national treatment provisions of NAFTA.

Shrybman said the jury still is out about whether water would be considered a commodity subject to export trade rules. There has never been a NAFTA case on the issue.

‘The simple answer is we don’t know if water would be considered a commodity, although it certainly is used as a commodity in business projects, in irrigation, in water bottles,’ he said. ‘The only way the issue will be resolved is by a trade dispute panel.’

Before that happens, he said Canada should try to negotiate a deal with the U.S. to specifically exclude water from NAFTA.


Steven Shrybman