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Free Trade Threatens Native Government
                       
            by Murray Klippenstein             
     Those in favour of the Canada-U.S. Free
Trade Agreement (FTA) frequently speak of the
dangers of Canada getting "sideswiped" by U.S.
protectionist measures aimed at other countr-
ies.  Canada's First Nations know the feeling.
     First Nations failed to get constitutional
protection for their status in the post-1982
First Ministers' Conferences.  This protection
was again denied them in the Meech Lake Accord. 
The type of threat they tried to defend against
has now materialized with a vengeance.  The FTA
is likely to seriously shrink the possibility
for native self-government and will do so in a
much more permanent way than mere federal legi-
slation.  It will do so without input from
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First Nations.  
     Native organizations like the Assembly of
First Nations have recognized that the FTA
broadly harms their interests by extending the
rule of the market in North America.  Another
serious concern includes the effect that in-
creased energy exports will have on native land
claims.  A look at the specific terms of the
deal shows that the Tories have hijacked native
governments with their own free market agenda, 
in a way that harms native aspirations for
self-government.
     The key relevant provision of the Agree-
ment is Article 103.  In it, the federal gover-
nment promises to "ensure that all necessary
measures" are taken "by provincial and local
governments" to give effect to the Agreement. 
This textual virus, which the government-publi-
shed summaries of the deal fail to mention,
will infect the whole agreement.
     First Nations organizations have always
maintained that they retain their inherent
right to self government.  The federal govern-
ment usually insists that any authority that
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native bodies have is delegated from the fed-
eral government, much like a municipality.  If
court decisions so far are any indication,
there is a very real risk that native govern-
ments may be found to be "local governments"
for purposes of the agreement.  Therefore, the
federal government might be obligated to force
native governments to act in certain specific
ways - an obligation the feds would gleefully
accept.
     While Article 103 also cuts into the juri-
sdiction of the provinces and their creations,
the municipalities, the provinces know they
have a strong division of powers argument to
rely on in a court challenge.  The First Na-
tions have no such defence.  The Constitution
clearly gives the federal government jurisdic-
tion over Indians and land reserved for Indi-
ans.  It may be that s.35 of the Constitution
protecting aboriginal rights will offer some
protection, but how much is anyone's guess.  It
is therefore quite possible that in the future
the federal government will be making compli-
ance with the FTA a specific compulsory clause
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in all agreements with First Nations.  This
could cover the spectrum from the standard
funding arrangement for the construction of the
local reserve community centre, to the struc-
turing of the largest comprehensive land claims
agreement (including, incidentally, the possi-
bly imminent Northwest Territories deal, which
will not be signed until after the FTA is ef-
fective).
     What exactly will natives be required to
do?  The most serious risk is that the FTA
provisions dealing with investment, services,
and government procurement will prevent First
Nations governments from favouring the commer-
cial enterprises of their native members.  Art-
icles 1402 and 1602 prohibit discrimination
against American investors and providers of
certain services.  Although native preference
is not the same as discrimination against Amer-
icans, it usually includes it.  Furthermore,
such provisions violate the general intention
of the FTA to expand the application of market
principles (Article 102).  The FTA's catch-all
enforcement  provisions, discussed below, fur-
?
ther increase the likelihood that such native
preference measures would be barred.
     Should native preference measures violate
the agreement, the effects on First Nations
self-government would be very serious.  The
ability to protect and encourage native wild-
life, fur, fishing, tourism and natural resou-
rce enterprises could all but vanish.
     There are also lesser, but more certain
dangers than those above.  One such impediment
will be Article 2010, the anti-monopoly sec-
tion.  This article applies to the future crea-
tion (by the federal government or a native
body), of any "entity" that is the sole "provi-
der" (which is extremely broadly defined) of a
product or one of the services covered by the
FTA.  The article requires, for each and every
such move, that the U.S. be notified and con-
sulted and that an attempt be made to "elim-
inate any nullification or impairment of benef-
its under this Agreement".  
     Most comprehensive land claims agreements
include an exclusive or preferential right to
harvest wildlife for members of First Nations. 
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That right is usually administered by a complex
system of quasi-governmental corporations. 
Such harvesting rights are of extreme impor-
tance, but it is possible that they could be
attacked under the anti-monopoly clause of the
FTA.
     The actual enforcement provisions of the
FTA only accentuate fears that the Agreement
could be used to hinder or stop attempts by
First Nations to exercise control over their
local economies.  An important part of the
structure is Article 2011.  This is lifted
straight from the General Agreement on Tariffs
and Trade (GATT), where it is the main enfor-
cement clause.  Various GATT experts have lab-
elled the wording of this clause "shadowy" and
"extremely inadequate".  The article gives the
U.S. the right to complain about any measure
defined as "any law, regulation, procedure,
requirement or practice" that "causes nullifi-
cation or impairment of any benefit reasonably
expected...directly or indirectly under the
provisions of this Agreement...".  As if this
were not broad enough, this article sails to
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the far reaches of the twilight zone by prohib-
iting such a measure "whether or not such meas-
ure conflicts with the provisions of this Agre-
ement"!
     The dispute settlement procedure itself is
anything but comforting for First Nations. 
Disputes about native measures will be decided
by a five member panel which will include two
Americans and the proceedings will be confiden-
tial.  The interests of the natives in attemp-
ting to preserve self-government will not be
argued by natives themselves, but by none other
than the federal government.
     One might be tempted to take desperate
comfort in the fact that only the U.S. govern-
ment and not private parties can initiate com-
plaints, making it difficult for smaller U.S.
interests affected by First Nation measures to
actually bring pressure to bear.  Unfortunat-
ely, experience in GATT has shown that a sub-
stantial number of complaints initiated by
governments have rather little commercial im-
portance.  U.S. and Canadian experience has
further shown that anti-native political senti-
?
ment is easy to mobilize when economic inter-
ests are at stake.
     Had First Nations achieved more protection
in the 1982 Constitution, or a "distinct soc-
iety" clause in the Meech Lake Accord, or even
a specific exemption in the FTA, free trade
would still have posed an indirect threat be-
cause of the homogenization of the North Ameri-
can market.  Nevertheless, natives would have
been left with at least some policy tools to
direct their own future.  As it stands, the
deal is one more example of the feds' "hit and
run".

                                               

Murray Klippenstein practices litigation and
native law with Iler, Campbell and Associates,
Toronto.