Chapter 11 of NAFTA

Here is the language that trashes U.S. law with regard to buisness between NAFTA nations.

No Party [i.e., a party to the agreement Canada, the U.S., or Mexico] shall directly or indirectly nationalize or expropriate an investment of an investor of another party in its territory

Here is the information accepted and used by the NAFTA Tribunal that justifies in their minds the continued use of MTBE.

Methanex has not directly challenged the California order banning MTBE, but the company does emphasize that "MTBE has been studied extensively and there is no evidence that it has any adverse impact on human health at reasonably expected exposure levels."

it points to several studies finding that MTBE is not a human carcinogen. Last year the International Agency for Research on Cancer (IARC) determined that MTBE is "not classifiable" as a human carcinogen.No Party [i.e., a party to the agreement Canada, the U.S., or Mexico] shall directly or indirectly nationalize or expropriate an investment of an investor of another party in its territory


NAFTA Tribunal fails to uphold California's right to protect environment

OTTAWA, ONTARIO - Chapter 11 of NAFTA has once again shown itself to be a
threat to the capacity of governments to regulate chemical hazards and protect
the environment.

Earlier this week, a NAFTA tribunal ruled that Methanex, a Canadian firm seeking
$1 billion in damages over California's decision to phase out a gasoline additive it
produces, must present more evidence to substantiate its claim that the state's
measure was politically, not environmentally, motivated. The Tribunal has given
Methanex 90 days to submit further evidence.

"The tribunal should have slammed the door on Methanex," said David Robbins,
Trade Campaigner of the Council of Canadians. " There is still the chance that
Methanex could win its case, and this would be a major blow on the ability of any
government to legislate to protect the environment and the health of its citizens."

After studies showed that the MTBE gasoline additive in question was
contaminating ground and surface water, Governor Gray Davis ordered a
phase-out of the additive by the end of 2002. Methanex, who produces the
methanol needed to manufacture MTBE, argued that the state didn't make that
decision on environmental grounds, but to favour Illinois-based Archer Daniels
Midland Co. (ADM), who produces ethanol, a competing product.

Methanex amended its original claim by stating that Governor Davis's decision was
motivated by political contributions received from ADM. The tribunal's decision
stated that Methanex might have a point, but simply didn't have enough evidence
to prove it at this time. Incredibly, it granted Methanex more time to make its

"These shenanigans only go to support our claim that NAFTA's investor-state
provisions open the door for all sorts of abuse and should simply be scrapped,"
said Robbins.

The Council of Canadians and the Canadian Union of Postal workers launched a
lawsuit last year challenging the validity of NAFTA's private enforcement regime as
unconstitutional. The groups expect to file evidence in support of their application
this fall.



Action Delays In-State Ethanol Production and Injects Uncertainty in the Market Place

WASHINGTON, DC - The State of California filed suit in the U.S. 9th Circuit Court of Appeals on Friday seeking to force the U.S. EPA to reverse its recent decision upholding the Clean Air Act oxygen standard. The lawsuit was filed on the final day allowed to challenge the agency action.

Bob Dinneen, president of the RFA, made the following statement:

"California's court challenge of the EPA decision to maintain the Clean Air Act oxygen standard is an exercise in futility. The forces attempting to undermine the oxygen standard lost with the Clinton EPA, lost with the Bush EPA, lost in the Congress, and will now lose in federal court. No amount of posturing and rhetoric can change the fact that the science supports maintaining the oxygen standard.

"The decision to file this lawsuit was based on state politics, not its legal or technical merits. With this lawsuit, the state of California is asking the court to overturn the technical and scientific conclusions of EPA experts. That is something courts have almost never done. This lawsuit will only discourage the very real opportunities for ethanol production within California and inject further uncertainty into the marketplace that hurts California consumers.

"Unfortunately, according to some news reports, California's ongoing effort to remove the oxygen standard has resulted in some gasoline refiners putting off the necessary changes needed to stop the use of MTBE in California gasoline. This is a travesty for California drinking water and consumers. The ethanol industry will continue its record-setting expansion and will be ready on December 31, 2002 to meet California's oxygen demand. We hope that state officials and the oil industry will be ready as well."


RFA and NCGA Seek to Defend Role of Ethanol as Federal Oxygenate

WASHINGTON, DC - The Renewable Fuels Association (RFA) and National Corn Growers Association (NCGA) have filed a motion with the U.S. Ninth Circuit Court of Appeals to intervene in the case of California Air Resources Board v. U.S. EPA in support of the EPA in order defend the use of ethanol as a gasoline oxygen additive to reduce air pollution.

"The RFA and NCGA filed extensive data, analyses and comments during the EPA's review of the California's request for an oxygen waiver and we want to ensure those findings are adequately brought to the attention of the Court," said Bob Dinneen, president of the RFA. "The RFA and NCGA are in a unique position to represent the economic impact of the oxygen standard to the Court, as well as provide our expertise on ethanol and air quality issues."

In June of this year the EPA denied California's request for a waiver from the federal oxygen standard of the Clean Air Act. California is poised to switch from MTBE to ethanol as the oxygenate of choice on December 31, 2002 when the state's MTBE ban goes into effect. California argued that ethanol could not replace MTBE. The EPA found that California failed to prove that maintaining the standard - and using ethanol - would be detrimental to the state's achievement of national ambient air quality standards. Such a finding is necessary by law before a waiver can be granted.

"The EPA made their decision based on sound science and the law," said Dinneen. "Our brief will reinforce the EPA's finding and defend the interests of our members that are at stake in this proceeding. We remain confident the Court will side with the EPA experts and deny California's appeal. The ethanol industry stands ready to supply California's entire demand for oxygenates."


Corn Growers Stunned by California Governor's Decision to Extend MTBE Phase-Out
March 19, 2002


Contact: Gary Bradley, NCGA, (314)275-9915, ext. 139
John McClelland, NCGA, (202)628-7701

(ST. LOUIS) March 19, 2002 -- The National Corn Growers Association (NCGA), long a proponent of ethanol as a replacement for MTBE, today expressed its extreme disappointment in a decision by California Gov. Gray Davis reversing his decision taken three years ago to eliminate MTBE from California gasoline by Jan.1, 2003.

In a statement released Friday, Davis extended the time refiners have to remove MTBE from gasoline sold in California by up to one year.

An angry NCGA President Tim Hume said Davis has made it clear that he would rather rely on foreign sources of MTBE than U.S. farmers.

"The governor's decision is based on unwarranted fear that banning MTBE and switching to ethanol will cause gasoline prices to reach $3 per gallon," said Hume, a corn grower from Walsh, Colo. "This view illustrates the complete lack of knowledge of the ethanol market and the U.S. transportation system in California government."

Hume noted that many cities, including Chicago, Milwaukee, St. Louis, Minneapolis, Cleveland and Denver use ethanol and maintain gas prices at or below the national average.

"There is no economic rationale that supports Gov. Davis' assertion that using ethanol will increase gasoline prices in California," Hume continued. "The supply is there and there is adequate transportation to deliver ethanol to the California market."

Farmers throughout the Midwest and in other areas of the United States have been engaged in meeting the additional demand for ethanol that was expected when Gov. Davis made his original decision, explained Hume noting that in the past three years, nearly 1 billion gallons of additional ethanol capacity have come on line.

"Much of that additional capacity is farmer-owned cooperatives that took the challenge set forth by Gov. Davis on March 25, 1999 and built the ethanol production capacity to serve the California market," said Hume.

While Gov. Davis and members of his Cabinet have questioned the ability of the ethanol industry to produce enough ethanol to meet the market demand in California they have also questioned the ability of the California refining and distribution industries to be ready to use ethanol by Jan. 1, 2003, stated Hume. However, California refiners and distributors, in filings made under the California Environmental Quality Act (CEQA) have demonstrated their readiness to use ethanol in California gasoline now.

The NCGA president concluded: "While the governor shows a disregard for the decisions by thousands of individuals and businesses and the clear and compelling facts about the continued danger of using MTBE in California gasoline, it is not too late for California refiners and gasoline distributors to do the right thing and begin using ethanol now."

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The National Corn Growers Association mission is to create and increase opportunities for corn growers in a changing world and to enhance corn's profitability and usage. NCGA represents more than 32,000 members, 25 affiliated state corn grower organizations and hundreds of thousands of growers who contribute to state checkoff programs.

NAFTA's Big Brother