A NAFTA challenge to Medicare ... the other shoe dropping?

By Larry Brown
National Secretary-Treasurer
National Union of Public and General Employees

Canadian governments have made our public health care and other social programs very vulnerable to attack by private for profit companies outside of Canada. They have done that by signing trade deals like the North American Free Trade Agreement (NAFTA). Weve known that for years î º and for years weve been warning them and nervously waiting for the other shoe to drop, for someone to actually challenge our public programs.

If you listen carefully, you might now hear the sound of the other shoe dropping.

An obscure company based in Arizona is threatening to challenge our public health care system, using the provisions of NAFTA. This particular threat may not be all that impressive in its own right. This company isnt one of the large and powerful ones. But the fact that the threat is being made at all underlines all of our often articulated concerns, and makes the threats to our social programs that much more real.

Weve always known that NAFTA, and all the other trade deals our governments have signed on to, act as a huge brake on the development of new public programs. The government of New Brunswick backed off introducing public auto insurance because this would have opened them up to a NAFTA challenge. If we succeed in getting a new national Pharmacare program we will have to fight U.S. drug companies and insurance companies who will argue that their inalienable right to gouge consumers is being compromised, which is not allowed under NAFTA or other trade deals.

But we have also argued that these trade deals, which are all devoted to the welfare of companies at the expense of the people, are seriously jeopardizing our ability to keep the public services that we already have and deeply value.

Companies trump elected governments

NAFTA, which gives U.S. and Mexican companies the right to challenge the laws and regulations of Canadian governments, whether federal, provincial or municipal, has provided a dangerous new weapon to private companies. Under NAFTA, private companies can challenge decisions of our governments in ways that we as citizens cannot do. Companies based in the U.S. or Mexico have more rights to challenge our governments than we do!

Furthermore, if we as citizens want to challenge our governments, we have to do it in an open court, in a public forum. If a company in the U.S. wants to challenge our governments actions, they can do it before a trade tribunal that operates outside of public scrutiny.

If a government action in Canada is found to violate our trade deals, then no matter how much that law or regulation reflects the will of Canadians, the government involved will have to pay damages to whichever company in the U.S. or Mexico brought the challenge.

As absurd as this sounds, it is all too real, and Canadian government laws have been successfully challenged several times by U.S. companies, at great cost to us as citizens.

This erstwhile challenge to public Medicare is not the first challenge to our democratic rights to govern ourselves, it's just the first one to openly attack our Medicare system. The company involved wanted to build a private surgical centre in BC. They claim they encountered -anti-American" roadblocks, that their rights as investors were affected, and that therefore the Canadian government owes them damages. They want $4 million for their expenses in making their for-profit plans, and they want $150 million because of foregone profits. (Yes, NAFTA gives U.S. companies the right to compensation for profits they might have made if they were allowed to set up their companies here.)

Unanswered question

We have always been told that under NAFTA or the World Trade Organization (WTO) trade deals, including the General Agreement on Trade in Services (GATS), our right to deliver public services, especially Medicare, was fully protected. We have continually expressed doubts about how strong that protection was in any event, but we have been especially concerned that the more we allow privatization of any public service, such as Medicare, the more vulnerable to a trade deal challenge that service becomes.

Several years ago, when Pierre Pettigrew was still Minister of Trade, I met with him and several of his top officials to discuss trade deals. There were several labour folks and trade experts from other allied groups in our delegation.

I asked the ministers officials a question: -If, as you claim, our health care is protected under the language of trade deals, is that protection still valid if part of our Medicare system is privatized? For example, if we allow one private hospital in Canada, does our exemption of Medicare from the coverage of trade deals still work?"

I was told that this was a very good question, and that Mr. Pettigrews officials would look at that issue and get back to me. Im still waiting for an answer. We may now have an answer to that question, not from our government but from this NAFTA challenge.

Part of the argumentation in this fledgling challenge is that Canada, and B.C. in particular, have increasingly opened up health care to the for-profit system, and that once they have opened the health sector up to for-profit companies, they cant then exclude companies from any of the NAFTA countries.

The threat will remain

This particular challenge may not go very far. It doesnt appear to have enough big money backing or enough support from the big corporate players to have any real legs. But if this small company has dug into the issue enough to come up with the basis for such a challenge, how long before the real players move into position on the same kind of argumentation?

The recent talks about expanding the WTO and GATS have failed. There is serious talk south of the border about renegotiating NAFTA. Our government can seize the moment to reclaim protections for our public services that they should never have given away in the first place.

We need to call them on this. Maybe this obscure little company in Arizona has done us all a huge favour by issuing a wake up call that even our free trade fixated government will not be able to ignore. NUPGE

Web posted by NUPGE: 23 September 2008