Water is defined as a “tradeable good,” “service” and “investment” in NAFTA.
As a tradeable good, NAFTA dramatically limits the federal government’s ability to stop provinces from selling water. If a provincial government decides to sell water to parched U.S. states, the federal government would be powerless to turn off the tap. And NAFTA’s proportionality clause would mean the province couldn’t cut back on the amount of water it was sending to the U.S. even in times of drought.
Removing water as a “service” would help protect water as an essential public service. When services are provided by private corporations, NAFTA provisions limit the involvement of the public sector. NAFTA’s negative list approach means that unless a service is specifically exempted, it must be opened up to the private sector. Examples around the world have shown the impacts privatization has on water services, including increased rates, reduced accessibility and poorer quality.
Removing water as an “investment” and excluding NAFTA’s ISDS provisions would make it much harder for foreign corporations to use trade treaties to fight domestic or international rules that protect water. Canada has already been sued for millions of dollars for laws protecting water.