Xref: utzoo can.politics:1810 ont.general:607 Path: utzoo!yunexus!stpl!yunccn!john From: john@yunccn.UUCP (John Hummel) Newsgroups: nccn.economic,can.politics,ont.general Subject: Effects of Free Trade on First Nations Keywords: 'Free'Trade Message-ID: <547@yunccn.UUCP> Date: 9 Nov 88 10:27:48 GMT Article-I.D.: yunccn.547 Organization: York University, Toronto Canada Lines: 190 Free Trade Threatens Native Government by Murray Klippenstein Those in favour of the Canada-U.S. Free Trade Agreement (FTA) frequently speak of the dangers of Canada getting "sideswiped" by U.S. protectionist measures aimed at other countr- ies. Canada's First Nations know the feeling. First Nations failed to get constitutional protection for their status in the post-1982 First Ministers' Conferences. This protection was again denied them in the Meech Lake Accord. The type of threat they tried to defend against has now materialized with a vengeance. The FTA is likely to seriously shrink the possibility for native self-government and will do so in a much more permanent way than mere federal legi- slation. It will do so without input from ? First Nations. Native organizations like the Assembly of First Nations have recognized that the FTA broadly harms their interests by extending the rule of the market in North America. Another serious concern includes the effect that in- creased energy exports will have on native land claims. A look at the specific terms of the deal shows that the Tories have hijacked native governments with their own free market agenda, in a way that harms native aspirations for self-government. The key relevant provision of the Agree- ment is Article 103. In it, the federal gover- nment promises to "ensure that all necessary measures" are taken "by provincial and local governments" to give effect to the Agreement. This textual virus, which the government-publi- shed summaries of the deal fail to mention, will infect the whole agreement. First Nations organizations have always maintained that they retain their inherent right to self government. The federal govern- ment usually insists that any authority that ? native bodies have is delegated from the fed- eral government, much like a municipality. If court decisions so far are any indication, there is a very real risk that native govern- ments may be found to be "local governments" for purposes of the agreement. Therefore, the federal government might be obligated to force native governments to act in certain specific ways - an obligation the feds would gleefully accept. While Article 103 also cuts into the juri- sdiction of the provinces and their creations, the municipalities, the provinces know they have a strong division of powers argument to rely on in a court challenge. The First Na- tions have no such defence. The Constitution clearly gives the federal government jurisdic- tion over Indians and land reserved for Indi- ans. It may be that s.35 of the Constitution protecting aboriginal rights will offer some protection, but how much is anyone's guess. It is therefore quite possible that in the future the federal government will be making compli- ance with the FTA a specific compulsory clause ? in all agreements with First Nations. This could cover the spectrum from the standard funding arrangement for the construction of the local reserve community centre, to the struc- turing of the largest comprehensive land claims agreement (including, incidentally, the possi- bly imminent Northwest Territories deal, which will not be signed until after the FTA is ef- fective). What exactly will natives be required to do? The most serious risk is that the FTA provisions dealing with investment, services, and government procurement will prevent First Nations governments from favouring the commer- cial enterprises of their native members. Art- icles 1402 and 1602 prohibit discrimination against American investors and providers of certain services. Although native preference is not the same as discrimination against Amer- icans, it usually includes it. Furthermore, such provisions violate the general intention of the FTA to expand the application of market principles (Article 102). The FTA's catch-all enforcement provisions, discussed below, fur- ? ther increase the likelihood that such native preference measures would be barred. Should native preference measures violate the agreement, the effects on First Nations self-government would be very serious. The ability to protect and encourage native wild- life, fur, fishing, tourism and natural resou- rce enterprises could all but vanish. There are also lesser, but more certain dangers than those above. One such impediment will be Article 2010, the anti-monopoly sec- tion. This article applies to the future crea- tion (by the federal government or a native body), of any "entity" that is the sole "provi- der" (which is extremely broadly defined) of a product or one of the services covered by the FTA. The article requires, for each and every such move, that the U.S. be notified and con- sulted and that an attempt be made to "elim- inate any nullification or impairment of benef- its under this Agreement". Most comprehensive land claims agreements include an exclusive or preferential right to harvest wildlife for members of First Nations. ? That right is usually administered by a complex system of quasi-governmental corporations. Such harvesting rights are of extreme impor- tance, but it is possible that they could be attacked under the anti-monopoly clause of the FTA. The actual enforcement provisions of the FTA only accentuate fears that the Agreement could be used to hinder or stop attempts by First Nations to exercise control over their local economies. An important part of the structure is Article 2011. This is lifted straight from the General Agreement on Tariffs and Trade (GATT), where it is the main enfor- cement clause. Various GATT experts have lab- elled the wording of this clause "shadowy" and "extremely inadequate". The article gives the U.S. the right to complain about any measure defined as "any law, regulation, procedure, requirement or practice" that "causes nullifi- cation or impairment of any benefit reasonably expected...directly or indirectly under the provisions of this Agreement...". As if this were not broad enough, this article sails to ? the far reaches of the twilight zone by prohib- iting such a measure "whether or not such meas- ure conflicts with the provisions of this Agre- ement"! The dispute settlement procedure itself is anything but comforting for First Nations. Disputes about native measures will be decided by a five member panel which will include two Americans and the proceedings will be confiden- tial. The interests of the natives in attemp- ting to preserve self-government will not be argued by natives themselves, but by none other than the federal government. One might be tempted to take desperate comfort in the fact that only the U.S. govern- ment and not private parties can initiate com- plaints, making it difficult for smaller U.S. interests affected by First Nation measures to actually bring pressure to bear. Unfortunat- ely, experience in GATT has shown that a sub- stantial number of complaints initiated by governments have rather little commercial im- portance. U.S. and Canadian experience has further shown that anti-native political senti- ? ment is easy to mobilize when economic inter- ests are at stake. Had First Nations achieved more protection in the 1982 Constitution, or a "distinct soc- iety" clause in the Meech Lake Accord, or even a specific exemption in the FTA, free trade would still have posed an indirect threat be- cause of the homogenization of the North Ameri- can market. Nevertheless, natives would have been left with at least some policy tools to direct their own future. As it stands, the deal is one more example of the feds' "hit and run". Murray Klippenstein practices litigation and native law with Iler, Campbell and Associates, Toronto.