NAFTA: Allow ban of US coal from BC ports?????

[Oscar]

Would NAFTA allow Canada to ban U.S. thermal coal exports from B.C. ports?

[ https://canadians.org/blog/would-nafta- ... s-bc-ports ]

May 6, 2017 - 8:25 am

(PHOTO: The Westshore Terminals coal export facility on Roberts Banks in Delta, British Columbia.)

Prime Minister Justin Trudeau has reportedly asked federal trade officials about the possibility of banning the export of thermal coal - mined in the United States - from ports in British Columbia, as well as possibly banning the export of thermal coal mined by an American corporation in Alberta.

The Globe and Mail reports, "Prime Minister Justin Trudeau [is] opening the door to retaliation against American coal. On Friday, Mr. Trudeau wrote B.C. Premier Christy Clark [and said] the federal government will be examining Ms. Clark’s request that Ottawa ban exports of thermal coal from B.C. ports."

That article notes, "In her April 26 letter to the Prime Minister, Ms. Clark linked her request for a ban on thermal coal exports to the U.S. decision to slap duties of up to 24.12 per cent on Canadian lumber shipments south of the border. Her request covers not only U.S. coal producers, but also asks Ottawa to halt thermal coal exports that originate from Canadian mines. Coal Valley Resources Inc., owned by Colorado-based Westmoreland Coal Co., runs an Alberta coal mine... Despite the BC Liberal Leader’s request for a federal ban on all thermal coal exports from the West Coast, Alberta Premier Rachel Notley was given verbal assurances on Friday that her province’s coal would not be targeted in such an action..."

Bloomberg adds, "British Columbia says 94 percent of the 6.6 million metric tons of thermal coal exported from the West Coast province last year came from the U.S. Clark’s original request for a ban triggered a fall in the shares of Canadian export terminal operator Westshore Terminals Investment Corp. and U.S. miner Cloud Peak Energy Inc."

Trudeau's letter to Clark says, "I have asked federal trade officials to further examine the request to inform our Government’s next steps.”

The Chapter 11 investor-state dispute settlement (ISDS) "investment protection" provision in NAFTA allows an American corporation to sue the Canadian government - through a secretive arbitration panel process - over regulations or legislation that impact the future profits of the company.

Arguably, either a ban against allowing U.S. coal to continue to be exported via Canadian ports or banning coal exports from a U.S. owned mine in Alberta could be subject to a Chapter 11 ISDS challenge.

If the Trudeau government does not take action, Clark says she would impose a $70 per tonne carbon tax on thermal coal exports. NDP leader John Horgan says, "That’s saber rattling. We have a serious trade issue before us." He has also commented that if Clark were serious about a carbon tax - particularly with respect to environmental concerns - she would have taken action long before this. There are also concerns that Trudeau's intervention in response to Clark's request with just days left before the May 9 election could help her in the polls.

Another means to challenge the softwood lumber countervailing duties would through the Chapter 19 state-to-state dispute settlement regime in NAFTA.

The CBC explains, "Dispute settlement provisions included in NAFTA's Chapter 19 allow Canada to appeal U.S. lumber duties to both a NAFTA review panel and the World Trade Organization. Appeal panels frequently rule against U.S. interests (and may do so again, should this dispute reach that stage.)" That said, The Globe and Mail has previously reported, "The Trump administration says it wants to eliminate from NAFTA the Chapter 19 dispute settlement system, which grants Canadian companies a means of directly appealing decisions by the U.S. government where Washington has slapped duties on their products."

The renegotiation of NAFTA is expected to begin this August.

Brent Patterson's blog
Political Director of the Council of Canadians
[ https://canadians.org/blogs/brent-patterson ]