The U.S. ban on Canadian beef: Suing under NAFTA's Chapter 11.

I'm sure someone's already thought of this but it's not clear why Canadian beef producers aren't suing under NAFTA's Chapter 11 for damages incurred by the current American ban on Canadian beef. As an introduction to NAFTA's Chapter 11, you can start here, with an article that describes a real-life example of a Canadian company (rightly or wrongly) using Chapter 11 to get compensation for alleged financial damages:

The case of Methanex v. United States originated in California in the mid-1990s, when people began to notice a foul taste in their drinking water, a smell like turpentine. Santa Monica had to shut down half its supply wells and purchase clean water from elsewhere. The contamination turned up in thirty public water systems, Lake Tahoe and Shasta Lake, plus 3,500 groundwater sites. The source was quickly identified as methyl tertiary butyl ether (MTBE), a methanol-based gasoline additive that creates cleaner-burning fuel, thus reducing air pollution. But even small amounts of MTBE leaking from storage tanks, pipeline breaks or car accidents made water unfit to drink--and extremely difficult to clean up. A study team from the University of California, Davis, added that in lab tests on rats and mice, MTBE was also carcinogenic, raising the possibility of human risk.

The state government acted promptly. In 1997 the legislature authorized a ban on MTBE if further investigations confirmed the health risks. In March 1999, after more research and lengthy public hearings, Governor Gray Davis issued an executive order to begin the phaseout. Other states were acting too. The oxygenating additive is used in one-fourth of the US gasoline supply, especially in pollution-prone big cities, so New York, New Jersey and other places were also discovering MTBE's unintended consequences for clean water. Up to this point, the story sounded like an alarming but fairly conventional environmental problem.

Then, four months after Governor Davis's order, a Canadian company from Vancouver, British Columbia, filed a daring lawsuit against the US government, demanding $970 million in compensation for the damage California was inflicting on its future profits. Methanex Corporation, which manufactures methanol, principal ingredient of MTBE, claimed that banning the additive in the largest US market violates the foreign-investment guarantees embodied in Chapter 11 of the North American Free Trade Agreement. Under Chapter 11, foreign investors from Canada, Mexico and the United States can sue a national government if their company's property assets, including the intangible property of expected profits, are damaged by laws or regulations of virtually any kind. Who knew?

Yeah. Who knew? And is there a reason this same law doesn't apply to Canadian beef? Just asking.

UPDATE: I am not a lawyer, so I'm not at all sure whether NAFTA's Chapter 11 would cover this situation, but from what little I've read, Chapter 11 certainly seems to paint with an awfully broad brush. And, as Andy points out in the comments, he has a link here over at Floccinauci ... whatever ... which refers to a recent Business Week article on this topic (although that article requires a free registration.)

If you want to know more, just Google on a combination of "Chapter 11" and NAFTA. There's more than enough reading to keep you plenty busy, like this piece.

DOUBLE UPDATE: I want to apologize to those readers who might wander into the comments section looking for feedback on NAFTA and Chapter 11, and find instead a thread related to U.S. Senator Robert Byrd and racism. Sadly, we have the occasional commenter who knows nothing of common courtesy and insists on posting his opinions wherever he feels like it. One can only hope folks like this grow up some day, but I am not optimistic. Again, my apologies. Any further comments not related to the original post will be deleted. I've started a new thread here if you want to keep this up.