After viewing Bill Moyer's documentary Trading Democracy, I found myself very surprised. Chapter 11 gives the corporations the right to sue for billions in lost profit, it gives foreign corporations immense political power as well. I think the reason behind this is simple; Politicians get the bulk of their campaign contributions from corporations, and so they do what the corporations want. From what I understood, The negotiators of the treaty were lawyers who are now in private practice teaching corporations how to work the loopholes of Chapter 11. They put the language in there on purpose so they could exploit it later.
There were some situations that the documentary provided. They were ridiculous to say the least. Under Chapter 11, the Ethyl Corporation, an American gasoline additive company, successfully sued the Canadian federal government when it banned MMT in gasoline, even though the additive is illegal in the USA, because it causes cancer. Canada could not afford the lawsuit and so caved in allowed the additive and paid up for the short time the ban was in effect. .
Under Chapter 11, Metalclad, an American company successfully sued the federal government of Mexico for when local Mexican governments refused them a permit to expand a toxic waste dump until they had cleaned it up. They took the money then went ahead with the toxic dump without any cleanup. One of the Canadian negotiators of the free trade agreement said that even if a company were putting plutonium in children's food, the company could still sue for lost profit if they were required to stop. Foreign corporations are insured from economic risk, unlike domestic corporations, no matter how irresponsibly they behave. Not only are governments required to compensate them for lost profits, but also for all lost profits indefinitely into the future. Ironically, the worse the foreign corporations behave the more they can extort from governments under Chapter 11.
