Earning easy money in a kangaroo court

UPS uses NAFTA to challenge Canada over "subsidies" to competing couriers

By: Linda McQuaig

  It's interesting to imagine what was in the minds of executives at the Atlanta head office of UPS, the parcel delivery service company, when they decided to launch a massive $230 million lawsuit against Canada.
  It's possible they were just in a bad mood after their rival, Fedex, landed the starring role in the blockbuster movie, Cast-Away. (Although the film included some shots of Tom Hanks, it seemed to be mostly about the wonders of the Fedex delivery service.)
  But I suspect that what really happened was that the UPS executives simply stumbled on a great way to earn easy cash in the New Economy - file a lawsuit under NAFTA. Indeed, with the drying up of dot.com investment opportunities, filing a lawsuit under NAFTA may be the easiest way for corporations to collect vats of money without actually producing anything.
 

It may be Canada Post's courier business uses some of its letter facilities. But that makes a lot of sense, from the point of view of Canadian consumers.

  Of course, NAFTA, the North American Free Trade Agreement, is ostensibly about facilitating international trade between Canada, the U.S. and Mexico. But carrying on international trade can be a slow, old-fashioned way to make money. NAFTA now offers corporations faster ways to get rich.
  UPS is hoping, for instance, to use NAFTA to collect $230 million from Canadian taxpayers simply by claiming "damages" it is suffering as a result of our national postal system. (Think of all the deliveries UPS would have to do up here to earn that kind of money.)
  Now some people might think that it's none of UPS' business that we choose to have a national postal system in Canada, but that would be old thinking and would have no place in the global economy. NAFTA - and other trade agreements like those negotiated through the World Trade Organization - have altered the rules so that an amazing number of things that used to be exclusively our business are now apparently subject to the approval of others, like the executives at a corporate headquarters in Atlanta.
  Essentially, UPS claims that Canada Post is unfairly subsidizing its courier business by using some of the same publicly-paid-for facilities that it uses for its letter delivery service.
  It may be that Canada Post's courier business uses some of its letter facilities. But that makes a lot of sense, from the point of view of Canadian consumers. It's this kind of blending of operations - don't they call it "convergence" and treat it as a good thing when the private sector does it? - that increases efficiency and allows Canada Post to provide mail and courier service which is uniform, comprehensive and reasonably priced all across a pretty big country.
 

UPS is bypassing the Canadian public and our elected representatives and taking its case directly to a secret tribunal operated by NAFTA

  Whether or not this fits in with the business plan of UPS probably wasn't the first thought in the minds of those who planned the Canadian system.
  Of course, if UPS doesn't like the way we do things here in Canada, it has every right to try to convince us to change, by taking out ads in our newspapers or lobbying our government.
  But that's not what's going on here. Instead, UPS is bypassing the Canadian public and our elected representatives and taking its case directly to a secret tribunal operated by NAFTA.
  This three-person tribunal includes one person selected by Canada, one by UPS and one agreed to by both parties. And that's about all we get to know about it. It holds its meetings in secret - possibly by private conference call - and releases no transcripts of its proceedings. UPS' lengthy statement of claim - the basis its whole case - is not available to the public. And CUPW, the union representing Canadian postal workers, one of the potentially affected parties, is not permitted to be represented at the hearings in the hope of refuting charges which it is not even permitted to know. If the Soviets had tried to pull this kind of a stunt, western commentators would have choked as they rushed to get the words "kangaroo court" out of their mouths.
  But it's stunning - and revealing - that so many of our commentators, particularly on the Right, have no objection to such an obvious assault on our sovereignty and on our concept of open courts. This lack of objection is due to the fact those on the right are actually pleased to see the Canadian government cede so much power to corporations, even foreign ones.
  Imagine how different the response of those on the Right would be if Ottawa had handed that sort of power to, say, foreign labour unions. Imagine, for instance, if Ottawa had signed an international treaty which allowed the AFL-CIO to sue Canada over Canadian tax policy, claiming, for instance, that changes in our tax treatment of stock options would make Canada a more attractive place for U.S. companies to locate, to the detriment of American workers.
  Imagine further the reaction on the Right if the AFL-CIO were allowed to take its case against Canada directly to a secret tribunal, which would decide the matter, and that interested Canadian parties - such as the Canadian Taxpayers' Federation, the C.D. Howe Institute and the National Post - were not allowed to be represented at the hearings or even see the AFL-CIO claim.
  Of course, to say that those on the Right have no objection to Canada ceding power to foreign corporations is to dramatically understate the case. The Right here has been eagerly cheering on UPS, happy to see it take a battering ram to a Canadian public system which it has long detested. And if the Canadian public ends up paying hundreds of millions of dollars to UPS, that result wouldn't be so bad either, from the right's point of view. At least that would pave the way for similar challenges to our public health care and education systems.

Linda McQuaig is an author and journalist. This column, reposted with permission, appeared in the National Post.

Posted: March 26, 2001

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