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Will the renegotiation of NAFTA include bulk water exports?

During the recent U.S. presidential election, Donald J. Trump described the North American Free Trade Agreement (NAFTA) as “the single worst trade deal ever approved” by the United States. Shortly after Trump’s upset win on November 8, Prime Minister Justin Trudeau stated, “I think it’s important that we be open to talking about trade deals. If the Americans want to talk about NAFTA, I’m more than happy to talk about it.” The Canadian ambassador to the United States has also noted, “We’ve got some things I think we’d like to see, and happy to have that discussion with him when he settles in.”

Trump will be settling in very soon. He will be sworn into office on January 20, 2017. And Politico reports that a Trump transition team document suggests the Trump administration could trigger NAFTA’s six-month exit clause as quickly as 200 days after taking office. That would be around August 9, 2017. While Trump’s threat to leave NAFTA may not come to fruition, this all suggests that there could be a very intensive period of NAFTA talks from January to August. Exploratory talks between the Trudeau government and the Trump administration are likely even beginning now.

Trudeau is not signalling what he’ll concede to keep the deal with the United States, nor do we know what specific changes Trump may be seeking.

But The Globe and Mail’s national business correspondent Barrie McKenna has commented, “Most provinces currently allow widespread bulk withdrawals of fresh water for industrial use, without tolls or adequate conservation measures in place to protect waterways. Given the near absence of limits on withdrawals inside the country, Canada’s trading partners could make the case that banning exports is an illegal trade barrier because foreign buyers are treated differently. That might leave Canada exposed to a trade challenge under World Trade Organization rules, and eventually unrestricted bulk exports, on someone else’s terms.”

Historically, the California-based Sun Belt Water Inc. has alleged that British Columbia had a policy of encouraging bulk water exports and that in 1986 and 1989 made agreements with a Canadian company for preferential access to water for export. In 1996, Newfoundland and Labrador-based McCurdy Group wanted to export water from Gisborne Lake in southeastern Newfoundland. And in March 1998, the Ontario government issued a five-year water-taking permit to Sault Ste. Marie-based Nova Group allowing the withdrawal by tanker of up to 600 billion litres of water a year from Lake Superior.

In recent years, the Montreal Economic Institute has argued that Quebec could make $65 billion a year by exporting 10 per cent of its renewable freshwater resources. The Frontier Centre for Public Policy has estimated that Manitoba could make $1.33 billion a year by exporting 1 per cent of the fresh water that flows into Hudson Bay via a pipeline to American markets. And former CIBC World Markets economist Jeff Rubin has stated, “Increasingly, states like California and Florida are turning to desalination to meet their freshwater needs. At around 65 cents per cubic meter, the going rate of desalinated water in the United States provides a very attractive pricing point for potential Canadian water exports.”

Even former Liberal prime minister Jean Chretien has raised the question of bulk water exports. He has provocatively commented, “We’re selling oil. It’s finite. We’re selling natural gas. It’s finite. Water, it’s raining and snowing in Canada every year. Water is something that is not finite.”

President-elect Trump would undoubtedly be receptive to the business case that corporate interests would make for bulk water exports. After all, he owns a bottled water business. “Trump Natural Spring Water” is extracted from wells in Red Hook, New York and Stockbridge, Vermont then bottled in Scotia, New York. According to Trump’s website, it’s “proudly served at Trump Hotels, Restaurants and Golf Clubs worldwide”. Trump owns hotels and golf clubs in the United States, Canada, Panama, Scotland, Ireland, and the United Arab Emirates.

Our existing protections against bulk water exports are weak.

In 1999, the federal and provincial governments entered into a voluntary agreement banning bulk water exports. But any province that chose to lift that voluntary ban and approve bulk water exports would put pressure on every other province because the NAFTA Chapter 11 provision could be used by a company denied permission to export water from any other province. In 2012, the Harper government passed C-383, a bill touted as a means to ban bulk water exports. But the Act does not protect non-boundary waters, allows bulk removals of 50,000 litres of water per day, and exempts water in manufactured goods including beverages.

In her new book Boiling Point: Government Neglect, Corporate Abuse, and Canada’s Water Crisis, Council of Canadians chairperson Maude Barlow argues, “Removing all references to water as a good from NAFTA would end the debate on whether the federal and provincial bans on water exports are sufficient, as it would remove any potential for a NAFTA challenge. Removing water as a service would help protect water as an essential public service. Removing it as an investment and excluding investor-state dispute settlement provisions would make it much harder for foreign corporations to use trade treaties to fight domestic or international rules that protect water.”

The Council of Canadians calls on Trudeau not to make concessions to the United States on water. We demand that rather than allowing water to be taken out of watersheds in Canada, that he negotiate water out of NAFTA.