- The Washington Times - Wednesday, March 13, 2002

Trade ministers from the United States, Canada and Mexico last year tried to impose greater openness on a procedure under NAFTA that allows companies to sue governments for millions in monetary damages, but the effort has so far failed.
As a result, United Parcel Service Inc. is now using the procedure to attack one of its major competitors, Canada Post, in relative secrecy, angering anti-NAFTA activists and the Canadian government. Few details are available about the suit.
The Atlanta-based company is using a procedure known as Chapter 11, named after a specific section of NAFTA. It allows corporations to seek compensation from governments that discriminate against investors from NAFTA countries in favor of their domestic competitors.
Since NAFTA took effect in 1995, companies have filed 15 such cases against all three NAFTA governments, including one involving the Mixing Bowl construction project in Springfield, Va. Cases are heard by a three-person tribunal and can take up to three years from start to finish.
Many Canadian groups fear they will be shut out of the process until the very end.
"Only when the decision has been reached are Canadians informed of the results," said Maude Barlow, head of the Council of Canadians, a group critical of NAFTA.
UPS filed its case in 1999, taking aim at Canada Post, a state-owned postal company. The American company charged that Canada Post was using its monopoly on letter delivery to bankroll its package-delivery service, an advantage UPS does not have.
Though UPS is seeking $160 million in damages, many observers suspect the company wants a settlement that gives it access to Canadian post offices for its parcel-drop boxes.
Charges of secrecy have dogged the Chapter 11 process since its inception. Many NAFTA supporters now concede that the closed tribunals have contributed to public distrust of the agreement, and advocate greater openness for the procedure.
There is no central registry for NAFTA investment cases. The State Department, which defends the United States before the tribunals, set up its first Internet site for documents from the lawsuits last fall, nearly seven years after NAFTA was passed.
Until then, the best source for information was a two-year-old private Web site, NaftaClaims.com. It is run by Todd Weiler, a doctoral student at the University of Michigan. Even now, Mr. Weiler's home page offers concise information about NAFTA that the government site does not.
"It's convenient for me to have everything, and putting it on the Internet makes it readily available," said Mr. Weiler, a NAFTA supporter who advises governments and companies on some cases.
In an effort to boost confidence in NAFTA, U.S. Trade Representative Robert B. Zoellick and his Canadian and Mexican counterparts agreed in July to make documents from Chapter 11 cases public "in a timely manner."
That meeting began the process that led to the U.S. government Internet site, and officials had hoped it would mute criticism of the system.
The precise arguments being made in the UPS-Canada Post case are still unknown, because the company is refusing to release its legal brief to the public, according to sources close to the case.
The Canadian government is pressing to release all documents, and the tribunal is now considering the request, these sources said.
UPS has said it will abide by the tribunal's decision.
"We're not going to have objections when the time comes," UPS spokesman Ken Churchill said.
Since the tribunal imposed a confidentiality order before the trade ministers made their decision, the documents are still under wraps.
With UPS opposed to releasing them, the public must now wait for a decision by the tribunal, which could choose to release the documents when the entire case is complete, NAFTA critics note.


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