Free-Trade / Fair Trade -- From the 20th Century to 21st Century

Free-Trade / Fair Trade
From the 20th Century to 21st Century
Inaugural Conference in International Inter-Tribal Trade
University of Oklahoma College of Law
Norman, Oklahoma - April 22, 2016
Michael Woods, Partner – Woods LaFortune LLP

Woods, LaFortune LLP
Woods, LaFortune LLP is an innovative, flexible and proactively cost-effective
boutique law firm that focuses on international trade and business, investment,
customs, government procurement and government relations. We provide a wide
range of services to our clients including advocacy before domestic and
international courts and tribunals, strategic advice and analysis, business planning
and analytical research.
Michael Woods
woods@wl-tradelaw.com
613.355.0382
www.wl-tradelaw.com

From the 20th Century
to the 21st Century
“There was a time in this fair land
when the railroad did not run
When the wild majestic mountains
stood alone against the sun
Long before the white man and
long before the wheel
When the green dark forest was
too silent to be real”
Gordon Lightfoot

to the 21st Century
“Well, I’ve been up to the
mountain
I’ve walked down by the sea
I never questioned non one
And no one questioned me …
I never came to borrow
I only came to learn …”
Gordon Lightfoot

Free Trade – Fair Trade
“The ground on which we stand is sacred ground. It is the
dust and blood of our ancestors.”
Chief Plenty Coups, Crow (1848-1932)

“Suppose a white man should come to me and say,
Joseph, I like your horses. I want to buy them.
I say to him, no, my horses suit me; I will not sell them.
Then he goes to my neighbor and he says, pay me
money, and I will sell you Joseph's horses.
The white man returns to me and says, Joseph, I have
bought your horses and you must let me have them.
If we sold our lands to the government, this is the way
they bought them.”
Chief Joseph, Nez Perce (1840-1904)

•Free Trade Agreement
“An agreement among two or more countries (more specifically, customs territories) to drop all
internal trade barriers as among the countries. Each party to an FTA, however, retains its own
separate schedule of tariffs for imports from third countries, thus making the FTA a less
economically integrated entity than a customs union.
[…]
The North American Free Trade Agreement (NAFTA) is the
quintessential example of a FTA.”
Raj Bhala,
Dictionary of International Trade Law

History of Free Trade
•A complex field of law
«Anyone who reads GATT is likely to have his sanity impaired».
Senator Millikin regarding GATT, during a hearing of the Senate
Committee on Finance.
«[O]nly the learned can communicate with it, and then only in code»
Herbert Feis, regarding the potential International Trade Organization
Charter.
«I think your difficulty (…) is the inherent complexity of the subject (…) I
must admit I am thoroughly confused.»

• Free Trade and First Nations – Two Solitudes or Commercial
Allies?
• Conflicting or Common Interests or Both?
• Starting point – What is Free Trade from Canada – U.S.
perspective (NAFTA) ?
• What does it mean for North American First Nations?
• Options – paths - strategies

What is Free Trade?
•Economic Strategy and Doctrine
• Free exchange of goods and
services and investment
• Assumption: the more country
exchange, (goods, services,
capital) the more they creates
wealth
• Requires elimination of barriers to
trade
• Comparative advantage

What is Free Trade?
• Economic Nationalism
• An economic strategy and
doctrine
• Trade barriers
• Measures to favour national
industries

What is Free Trade?
The debate
• John A. McDonald - “National Policy” (Tariff
Policy) (1880-1911)

What is Free Trade?
The debate
• Wilfred Laurier – Reciprocity with United
States and the UK

What is Free Trade?
The debate continues …
• John Turner : «Once a country yields its energy, once a country yields its
agriculture, once a country open itself up to a subsidy war with the United
States, then the political ability of this country to sustain the influence of the
United States, to remain an independent nation, that is lost for ever!»
• Brian Mulroney : «I did it to promote prosperity. I, as a Canadian, genuinely
believe that it is right for Canada.»

What is Free Trade?
Arguments in favour:
• Promotes peace and economic development
• Encourage competitiveness
• Creates employment
• Increases global wealth

What is Free Trade?
Arguments against:
• Employment in areas that are less effective will disappear
• The opening of global market can create an important adjustment
• In exchange, a much larger global wealth is created. Some indicate that
this wealth allows to mitigate the negative effect of job loss in areas
that a relatively less effective.
• Opening of markets – painful adjustments, employment threatened.

What is Free Trade?
Arguments against:
•Foods security
•Protection of Environment
•Developing countries exploited (North-South)

KEY GATT Articles
• Article I – Most Favoured Nation (MFN)
• Articles II – Tariff Concessions
• Articles III – National Treatment
• Articles XI – Elimination of Import /
Export Restriction
• Articles XX – General Exceptions
• Articles XXIII – Dispute settlement
• Articles XXIV – Customs Unions / FTAs

World Trade
Organization – WTO
• Objective – Continue process of trade liberalization
• GATT plus:
• 162 members
• Services
• IP
• Agriculture
• Safeguards, Anti-dumping
• Improves Disputes settlement process

• 21st Century:
• “When the 20th century trade is about “made-here-sold-
there” goods […] twenty-first century trade is about “made-
everywhere-sold-there” Richard Baldwin
• Trade barriers is no longer the issue, the focus is on
preferential market access, and international supply chains
• Apparition of Regional Trade Agreement:
• Free trade agreement (FTAs) : sets tariffs to zero between
signatories
• Regional Trade Agreement (RTAs): harmonizes tariffs against third
nation

•21st Century:
• RTA made their apparition in the late 20th Century, but by
the 21st , they were dominating as the go to trade
agreement
• NAFTA, came into force in Jan 1, 1994
• Asia Pacific Trade Agreement – APTA, came into for Jan 1, 2002
• EU-US TTIP – still under negotiation
• EU-Canada (CETA) – final legal text revealed on Feb 29, 2016
• Trans-Pacific Partnership (TPP) – still under negotiation

to the 21st Century
NAFTA

The North American
Free Trade Agreement - (NAFTA)
• Tri-lateral free trade agreement
• Binding upon U.S.A., Canada and Mexico (“the Parties”)
• For U.S. and Canada, extension of pre-existing FTA
• Coverage:
• Goods (Tariff and Non-Tariff)
• Investments
• IP rights
• Services
• Government Procurement

What is the NAFTA?
• A snapshot of its scope:
• In 1993, trilateral trade within the North American region was
US$288 billion. In 2014, Canadian’s total trilateral merchandise trade
exceeded US$1.12 trillion.*
• As of 2014, the prosperity and development of the North American
economy has more than doubled in size since 1994. The combined
gross domestic product (GDP) for Canada, the U.S., and Mexico
surpassed US$20.0 trillion in 2014 up from nearly US$8.0 trillion in
1993.*
*Global Affairs Canada

What is the NAFTA?
• A snapshot of its scope (continued):
• Created world’s largest free trade area
• Links 450 million people producing $17 trillion in goods and services*
• U.S. had $918 billion in two-way trade in goods and services with its
NAFTA partners in 2010 alone*
*Office of the U.S.T.R.

What is the NAFTA?
• What is in the NAFTA?
• National Treatment
• Most-Favoured-Nation Treatment
• Tariff Elimination
• Import and Export Restrictions
• Investment provisions

NAFTA – A Comprehensive
Protection Plan
NAFTA also provides:
• A reduction of trade barriers
• Creation an expanded market for goods and services produced
in North America
• Implementation of intellectual-property protections
• Creation of dispute-resolution mechanisms
• Implementation of regional labor and environmental
safeguards

NAFTA Chapter 11
• Designed to:
• Establish a more stable and predictable
• Enhance prosperity by increasing FDI
• Ensure that investment policies are held to uniform
standards

NAFTA Chapter 11
• Mechanism:
• Establish obligations for the Parties’ treatment of NAFTA
investors and their investments
• Investors can seek to have these standards enforced by
bringing a claim under Ch. 11
• Where a Tribunal determines that Ch. 11’s standards been
breached, the investor may be entitled to recover
damages

NAFTA Chapter 11
THE NAFTA CHAPTER 11 CLAIM
PROCEDURE

NAFTA Chapter 11 Claim Procedure
• Standing:
• In order to commence a Ch. Claim, a party must be an
“investor of a Party”
• Can be any citizen (corporate or individual) of any of
the three countries, who has an investment in one of
the other countries

• Consent to arbitration and jurisdiction:
• NAFTA Parties bound by general consent to Arbitrate in
Article 1122
• Therefore, an investor need only bring a claim to
commence arbitration
• Claimant must not pursue other judicial or quasi-judicial
remedies, other than for injunctive and other extraordinary
relief

•Applicable arbitral rules:
•Three options for claimants:
•ICSID Rules
•ICSID Additional Facility Rules
•UNCITRAL Rules

•Appointment of Arbitrators:
•Except where parties agree otherwise, Tribunal
comprised of three arbitrators
•One arbitrator appointed by each party, and the
third (who is presiding arbitrator) appointed by
agreement of the disputing parties

NAFTA Chapter 11
SUBSTANTIVE INVESTOR
PROTECTIONS

Article 1102 – National Treatment
•Article 1102: National Treatment
“Each Party shall accord to investors of another Party
treatment no less favorable than that it accords, in
like circumstances, to its own investors with respect
to the establishment, acquisition, expansion,
management, conduct, operation and sale or other
disposition of investments.”

•Same protection is extended in 1102(2) to
“investments of investors”
- Article 1102 requires a host state to provide NAFTA
investors and investments with treatment that is no
less favorable than the treatment they provide to
domestic investors and investments in like
circumstances.

1. Treatment “no less favorable”
- Host state must provide to qualifying NAFTA
investors/investments treatment that is at least as
advantageous as that provided to its own
investors/investments

2. In “like circumstances”
- To trigger 1102 protection, NAFTA investor/investment
must be in “like circumstances” to a domestic
investor/investment receiving more favorable
treatment:
- For example:
- Same industry
- Same economic sector
- In direct competition

3. With respect to the establishment, etc.
- Treatment complained of must concern any of the
enumerated actions related to the investment:
- Establishment
- Acquisition
- Expansion
- Management
- Conduct
- Operation
- Sale or other disposition

S.D. Myers Inc. (U.S.) v. Canada, 2000
• U.S. company providing PCB disposal services barred by Canadian
border closure from transporting waste across Canada-U.S. border for
treatment at its U.S. facilities
• Border closure adversely affected U.S. companies bidding on same
remediation contracts as domestic companies who had treatment
facilities in Canada
• NAFTA Panel finds violation of Article 1102

Feldman v. United Mexican States, 2002
• Government of Mexico denies tax rebate to foreign-owned re-sellers
and exporters of cigarettes
• Tax rebate was available to domestic entities performing the same
services
• No legitimate regulatory or public policy justification for the distinction
• NAFTA tribunal finds violation of Article 1102

Corn Products International v. Mexico, 2008
• Mexico imposes tax on producers of high-fructose corn syrup (HFCS)
• Tax not applied to producers of cane sugar
• Mexico’s domestic sugar industry comprised solely of can sugar
producers
• Tax had discriminatory effect upon producers of HFCS, all of whom
were foreign-owned
• NAFTA Tribunal finds violation of Art. 1102

Note also:
In the Matter of Cross-Border Trucking, 2001

Article 1103 – MFN Treatment
•Article 1103: Most-Favored Nation (MFN)
“Each Party shall accord to investors of another Party
treatment no less favorable than that it accords, in
like circumstances, to investors of any other Party or
of a non-Party with respect to the establishment,
acquisition, expansion, management, conduct,
operation, and sale or other disposition of
investments.”

• Same protection is extended in 1103(2) to
“investments of investors”
• Imposes the same obligation upon NAFTA Parties
as Article 1102, but extends the comparators
beyond domestic investors and investments to
third-party investors and investments as well

Same principles apply as in Art. 1102, except that
group of possible comparators is broadened to
include not only domestic investors but investors
of other non-Parties as well.

In the Matter of Cross-Border Trucking, 2001
• Note: also established breach under Article 1102
• U.S. moratorium on issuing motor carrier licenses to foreigners lifted for
Canadians, not for Mexicans
• Effectively prevented Mexican nationals from investing in the U.S.
industry
• Because the lifting of the moratorium with respect to Canadians gave
Canadian companies preferential treatment as compared to Mexicans,
NAFTA tribunal found breach of Article 1103

Article 1104 – Standard Treatment
•Article 1104: Standard of Treatment
“Each Party accord to investors of another Party and
to investments of investors of another Party the
better of the treatment required by Articles 1102
and 1103.”

Article 1104 – Standard Treatment
• Article 1104 addresses the right of an investor or
investment to the better of national treatment (or
most-favored-nation treatment).

Article 1105 – Minimum
Standard of Treatment
•Article 1105: Minimum Standard of Treatment
“Each Party accord to investments of investors of
another Party treatment in accordance with
international law, including fair and equitable and full
protection and security.”

• This obligation imposes an absolute (rather than
comparative, as in 1102, and 1103) baseline with respect to
the standard of acceptable treatment that must be provided
to foreign investors and their investments, which includes:
• Treatment in accordance with international law
• Fair and equitable treatment
• Full protection and security

• NAFTA FTC Note of Interpretation:
•Clarifies that the standard set out in Article 1105
refers to a standard established under customary
international law, rather than one to be interpreted
by reference to the Parties’ other treaties.

Treatment in accordance with international law :
•Denial of justice, arbitrary
•grossly unfair treatment
•outright and unjustified repudiation of
obligations)

Fair and equitable treatment:
•Detrimental reliance upon legitimate
expectations
•Certainty, transparency and stability of host
state’s regulatory regime

Full protection and security:
•Protection from discriminatory treatment
•Government’s adherence to its own laws and
regulations

GAMI Investments (U.S.) Inc. v. Mexico, 2004
• Mexican government implements laws and regulations meant
to stabilize sugar industry, mismanages and fails to enforce
them.
• Result is that the value of U.S. shareholder’s investment in
Mexican sugar mill is undermined.
• NAFTA Tribunal decides that where this mismanagement
amounts to outright repudiation of Mexico’s own laws, the
government’s conduct could establish breach of Article 1105.

• The NAFTA Parties have subsequently issued a Note of
Interpretation intended to clarify Art 1105.
• Following the Note of Interpretation, the jurisprudence the
notion of Fair and equitable standard.

Article 1106 –
Performance Requirements
Article 1106 – Performance Requirements
“ No Party may impose or enforce any of the following requirements, or enforce any
commitment or undertaking, with respect to the establishment, acquisition,
expansion, management, conduct or operation of an investment of an investor of a
Party or of a non-Party in its territory:
• To export a given level or percentage of goods or services;
• To achieve a given level or percentage of domestic content;
• To purchase, use or accord a preference to goods produced or services provided
in its territory, or to purchase goods produced or services provided by persons in
its territory
• […]”

Article 1106 –
“Performance requirements” refers to an array of requirements
put in place by a host state concerning the performance of
foreign-owned enterprises in its territory.
• Art. 1106 sets out those performance requirements that are
prohibited under NAFTA, as well as a list of exceptions.

Article 1106 –
ADM Inc. (U.S.) v. Mexico, 2007
• Excise tax imposed by Mexican government upon soft drink producers
using sweetners other than cane sugar.
• All domestic producers used cane sugar, U.S. producers used high-
fructose corn syrup.
• NAFTA Tribunal finds excise tax amounts to prohibited performance
requirement – to use certain percentage of domestic product and
accord a preference to goods produced domestically.

Article 1110 – Expropriation
and Compensation
• Article 1110: Expropriation and Compensation
“No party may directly or indirectly nationalize or expropriate
an investment of an investor of another Party in its territory
or take a measure tantamount to nationalization or
expropriation of such an investment (“expropriation”),
except:
(a) for a public purpose;
(b) on a non-discriminatory basis;
(c) in accordance with due process of law and Article 1105(1); and
(d) on payment of compensation in accordance with paragraphs 2
through 6.”

and Compensation
Nationalization : The state takes ownership of property or
investments across a sector or industry
Direct Expropriation : Taking physical possession of an investment
or property by transfer of title or seizure of property
Indirect Expropriation: Taking measures which have the effect of
destroying the ability to manage and control the investment, or
have the effect of depreciating substantially the value of the
investment

and Compensation
AbitibiBowater (U.S.) v. Canada
• AbitibiBowater announced closure of pulp and paper mill facilities in
Newfoundland
• Newfoundland government cancels water and hydroelectric contracts
with company in retaliation
• AbitibiBowater alleges expropriation of its investment (and measures
tantamount to expropriation)
• Government of Canada settles claim for $130 million

and Compensation
Metalclad Corp. (U.S.) v. Mexico
• U.S. company purchased hazardous waste transfer station in Mexico.
• Mexico’s federal government allowed local municipal government to
deny necessary permits to investor, preventing it from operating.
• NAFTA Tribunal decided that by allowing local government to treat
investor in an unfair manner and act outside its sphere of jurisdiction,
Government of Mexico engaged in acts tantamount to expropriation in
breach of Article 1110.

Additional Key Cases
• TransCanada Corporation et al. v. USA
• Clayton/Bilcon v. Government of Canada
• Grand River Enterprises Six Nations, Ltd. et al v. USA

NAFTA EXEMPTIONS
Indigenous peoples were not present at the NAFTA negotiations but
Canada, USA, & Mexico each inserted specific language or "non-
conforming measures" within NAFTA that exempt specific sectors from
operation of the treaty.
Canada - Annex II (reservations or exemptions) exempted "Aboriginal
Affairs” sector Canada reserves the right to deny investors or "another
Party" the rights or preferences provided to "aboriginal peoples" in five
areas: national treatment, most-favored-nation treatment, local
presence, performance requirements, and senior management and
boards of directors.

NAFTA EXEMPTIONS
US exemption under "Minority Affairs” included indigenous
interests within its borders with non-indigenous minorities and
reserves the right to adopt or maintain rights or preferences to
what are termed "socially or economically disadvantaged
minorities." The USA reserves these rights in the same areas as
Canada with the exception of MFN.
Mexico also exempted sector "Minority Affairs," obscuring the fact
that only 10% of its minority population can arguably be termed
non-indigenous. Reserved these rights in only the two areas of
national treatment and local presence.

21st Century Free
Trade Agreements
CETA (Canada-EU)
TTIP (USA-EU)
TPP

Canada – E.U. Comprehensive Economic
and Trade Agreement (CETA)
• “It is a great success today. We signed the start of a process leading to the deepening of our
economic cooperation.”
Mirek Topolanek, Prime Minister of Czech Republic
“It is a highly ambitious economic agreement which will bring considerable benefits to both sides.”
José Manuel Barroso, Former President of E.U.
“We have an opportunity to become a gateway to
the North American market.”
Stephen Harper
Former Prime Minister, Stephen Harper, President of the Czech
Republic Mirek Topolánek and the former E.U. President José
Manuel Barroso - Canada-E.U. summit, May 6, 2009

CETA - Comprehensive Economic
and Trade Agreement
• In a nutshell:
• 5 years in the making
• Tariffs will be eliminated or reduced only on items that qualify
under the CETA rules of origin
• CETA Rules of origin = Canada and the EU have to ensure that
steps in their qualifying process were taken. Both parties can
also engage the service of providers to complete the qualifying
proceed
• Quotas on agricultural products, Fish and Seafoods, Textiles and
Apparel, Vehicle

CETA - Comprehensive Economic
and Trade Agreement
• CETA Rules of origin:
“For the purposes of this Agreement, a product is originating in the Party where the
last production took place if, in the territory of a Party or in the territory of both of
the Parties in accordance with Article 3, it:
(a) has been wholly obtained within the meaning of Article 4;
(b) has been produced exclusively from originating materials; or,
(c) has undergone sufficient production within the meaning of Article 5.
2. Except as provided for in paragraphs 8 and 9 of Article 3 (Accumulation of
Origin), the conditions set out in this Protocol relating to the acquisition of
originating status must be fulfilled without interruption in the territory of one or
both of the Parties.”

TPP – Trans-Pacific Partnership
• In a nutshell:
• 13 countries
• Comprehensive market access
• Regional approach to commitments
• Address new trade challenges
• Inclusive trade
• Platform for regional integration

• What’s new with the TPP?
• Incorporation of new and emerging trade issues such as
digital economy, participation of state-owned enterprises in
international trade and investment and the ability for small
businesses to take advantage of trade agreements.
• Diversity of countries in size, geography of development
• Non-conforming measures: parties are allowed to open
their markets to foreign investors, except where they have
applied the said non-conforming measure. Those exceptions
are listed in a country-specific annex

• Critics to the TPP?
• State’s sovereignty : limited regulatory powers for
governments
• Difficulty in predicting trend: Lack of consistency and
coherence in the jurisprudence
• The big question:
• Is constitutional democracy at risk?

Free Trade and First Nations
• Two Solitudes or Commercial Allies?
• Conflicting or Common Interests or Both?
• What does it mean for North American First Nations?
• Options – paths - strategies

to the 21st Century
What is next for the First Nations?

What is next for the First
Nations?
• Free Trade and First Nations in Canada – new law, new options, new opportunities
• Supreme Court of Canada - Aboriginal title land and Treaty Territory in Canada.
• Haida Nation v British Columbia (Minister of Forests), [2004] 3 SCR 511 - confirmed the
Crown’s duty to consult with Aboriginal peoples in
• Tsilhqot’in Nation v. British Columbia (2014 SCC 44)
• confirmed the Tsilhoqot’in people’s exclusive Aboriginal title to BC Interior lands
• outlined a legal test for other First Nations across
• First Nations able to successfully establish Aboriginal land title holders the right to
extensive possession in addition to ownership rights, including the right to decide the
use of the land, the right to profit from economic development of the land, and the right
to pro-actively use and manage the land.
• Will require new, creative and flexible approaches on all sides

Nations?
• Grassy Narrows First Nation v. Ontario (Natural Resources) 2014 SCC 48.
• Supreme Court of Canada made a major decision on Aboriginal Treaty
territory.
• The Crown has the authority to “take up” lands in question
• Citing Tsilhqot’in decision, the Court also reinforced its language duty of
the Crown to consult and accommodate the affected First Nations in a
manner “consistent with the honour of the Crown.”
• Crown infringement of treaty rights (such as the issuance of resource
development and harvesting leases on treaty lands) will require the Crown
to act in a manner consistent with its fiduciary relationship with Treaty
rights holders.

Nations?
Daniels v. Canada (Indian Affairs and Northern Development), 2016
SCC 12 :
In this Supreme Court decision, the top court was asked to answer
three questions:
1. Whether or not Métis and non-status Indians are “Indians” under s.
91(24) of the Constitution Act, 1867;
2. Whether the federal Crown owes a fiduciary duty to Métis and non-
status Indians; and
3. Whether the Métis and non-status Indians have the right to be
consulted and negotiate with.

Nations?
Do Métis and non-status Indians are “Indians” under s. 91(24) of the
Constitution Act, 1867? YES
- As in Canada v. Khadar, a declaration can only be granted if the
declaration will have practical utility and if it will settle a “life
controversy” between the parties.
- Both provincial and federal government have denied authority over both group, making
them a “jurisdictional wasteland with significant and obvious disadvantaging
consequences”.
- “The existence of a legislative vacuum is self-evidently a reflection of the fact that
neither level of government has acknowledge constitutional responsibility. A declaration
would guarantee both certainty and accountability”. (para 15)

Nations?
The term “Indian” under s. 91(24) of the Law of 1867 includes the
Métis that do not meet the three definitional criteria set out in Powley,
test that was developed specifically for the purposes of the application
of s. 35(1) of The Law of 1867, which protect historic community-held
rights.
Powley test: For the purposes of s. 35(1) of The Law of 1867, qualifies
as a Métis, a person who:
1. Self-identify as a Métis
2. Has an ancestral connection to an historic Métis community; and
3. Who is accepted by the modern Métis community

Nations?
• Constitutional differences between s. 35(1) and s. 91(24) of The Law
of 1867:
• S. 35(1) purpose is “the reconciliation of Aboriginal and non-Aboriginal
Canadians in a mutually respectful long-term relationship”
• S. 91(24) purpose is to includes both Métis and Non-status Indians in
relation to the broader goals of Confederation.
• “Constitutional changes, the apologies for historic wrongs, a growing
appreciation that Aboriginal and non-Aboriginal people are partners in
Confederation […] all indicate the reconciliation with all of Canada’s
Aboriginal peoples is Parliament's goal.” – Beckman v. Little Salmon et al.,
[2010] 3 S.C.R. 103, para 10.

Nations?
• Métis and Non-status Indians are “Indian” as they are all Aboriginal
people. The term “Indians” has been used as a general term referring to all
Indigenous people, including mixed-ancestry communities like the Métis.
• Imprecise definition of “non-status Indians”:
• Indians who no longer have status under the Indian Act; or
• Members of mixed communities which have never been recognized as
Indians by the federal government
• Some identify with their Indian heritage;
• Others identify with the term Métis, being more reflective of their
mixed origins.

Nations?
• More importantly, s. 35 of The Law of 1867, states that
Indian, Inuit, and Métis peoples are Aboriginal peoples for
the purposes of the Constitution.
• Therefore, the terms “Indian” or “Indians have two meanings:
• A broader meaning, used in s. 91(24) of The Law of 1867,
including Métis, and Inuit – can b equated with the term
“aboriginal people of Canada”, also used in s. 35; and
• A narrower meaning that distinguished Indian bands from
other Aboriginal peoples.

Nations?
• Legislative amendments setting the tone for the declaration:
• 1958 Amendment of the Indian Act: Métis who had been allotted scrip but
were already registered as Indians (and their descendants) remain registered
under the Act.
• Clarify their status with respect to treaties and reserves
• 1980, Natives and the Constitution: this document written by the
Department of Indian Affairs and Northern Development, clearly expressed
the federal government’s authority to legislate over Métis under 91(24) of the
Law of 1867.

Nations?
• Nota bene :
• this declaration will guarantee accountability of the provincial
and federal governments over them, BUT does not create a
duty to legislate.
• Provincial legislation with respect to Métis and non-status Indians
does not become ultra vires with the federal jurisdiction:
• The Supreme Court previously stated that “should favour, where possible,
the ordinary operation of statutes enacted by both levels of government”
Western Bank v. Alberta, [2007] 2 S.C.R. 3, para. 37.

Nations?
Does the federal Crown owe a fiduciary duty to Métis
and non-status Indians?
- NO, but
- In Delgamuukw v. British Columbia, [1997] 3 S.C.R. 1010, the
Supreme Court indicated that Canada’s Aboriginal peoples
have fiduciary relationship with the Crown. Thus, “the
declaration lacks practical utility because it is restating settled
law.” (para 53)

Nations?
Do the Métis and non-status Indians have the right to
be consulted and negotiate with?
- NO, but:
- This declaration lacks practical utility as it would also restate
the existing law:
- Haida Nation v. British Columbia, [2004] 3 S.C.R. 511, et
Tslhqot’in Nation v. British Columbia, [2014] 2 S.C.R. 257
recognized a context-specific duty to negotiate when
Aboriginal rights are engaged.

Nations?
• Hupacasath First Nation v Canada (Ministry of Foreign Affairs) 2015 FCA 4
• Since SCC confirmed Crown’s duty to, courts have been tasked with determining
precisely when the duty is triggered
• Hupacasath First Nation argued that the duty applied to the ratification of the
Canada-China Foreign Investment Protection Agreement (“CC-FIPA”) as potential
of arbitral awards creates incentive for the government to act in a manner that
avoids breaching CC-FIPA and that this may cause the government to injure HFN
rights and interests.
• Consequently, the HFN argued Canada was obligated to consult with it and, if
necessary, accommodate its rights and interests.
• At the first instance, the Federal Court rejected the HFN’s argument. It found no
conflict, “actual or potential,” between the provisions of the CC-FIPA and the
HFN’s asserted rights and interests. The HFN appealed to the FCA.

Canada-China FIPA Challenge
• Hupacasath First Nation v. Canada (Foreign Affairs
and International Trade Canada), 2015 FCA 4
• Background:
• In September 2012, Canada signed a reciprocal foreign investment agreement
with the People’s Republic of China.
• The Agreement provides a minimum standard of treatment to foreign
investors by providing a guarantee against discriminatory treatment and also
provides a protection from expropriation without compensation.
• Hupacasath First Nation, is a band under the Indian Act, with 285 members
living on two reserves covering roughly 56 acres of land on Vancouver Island,
British Columbia.

Hupacasath First Nation v. Canada
• Federal Court:
• Hupacasath alleged that the Agreement might affect Aboriginal rights and
interests it has asserted over lands in British Columbia and therefore, the
Minister of Foreign Affairs had an obligation to consult Hupacasath prior to
entering into the Agreement.
• Application dismissed, the Court found that the Agreement could not
potentially cause harm to Hupacasath, and that the Hupacasath’s asserted
rights and interests were “non-appreciable” and “speculative”.

Nations?
• Trial Judge found potential adverse effects “non-appreciable” and
“entirely speculative” as a matter fact
• Application was on behalf of a small 300-member nomadic tribe
• Territory of about 230,000 hectors in Alberni Valley of Vancouver
Island
• Limited budget, resources, and few strategic allies & little media
cover
• Case heard before Tsilhqot’in, Grassy Narrows First Nation, and
Harry Daniels et al.

• The issues before the Federal Court of Appeal:
• Does the federal court have jurisdiction over decisions by the Government of
Canada to enter into international agreements and treaties falling under the
Crown’s prerogative power? and
• Is the exercise of a Crown prerogative power justiciable? In other words, can
the Hupacasath’s case be heard at all?

Conclusion of the Federal Court of Appeal:
• The Jurisdictional issue:
• Rejected the Crown’s position that “the residue of discretionary or arbitrary
authority, which at any given time is legally left in the hands of the Crown”
• The Crown holds prerogative powers on the conduct of foreign affairs:
“An interpretation that the Federal Court has the power to review federal exercises of
pure prerogative power is consistent with the Parliament’s aim to have the Federal
Courts review all federal administrative decisions. The contrary interpretation would
carve out from the Federal Courts a wide swath of administrative decisions that stem
from federal prerogative, some of which can have large national impact”. (para 54)

Conclusion of the Federal Court of Appeal:
• The Issue of Justiciability:
• The government of Canada’s position that exercises of pure prerogative are
reviewable only when Charter rights are at issues was rejected, adding that
non-justiciable issues are very rare and are limited to:
“Exercises of executive power [that] are suffused with ideological, political,
cultural, social, moral and historical concerns of a sort not amenable to the
judicial process or suitable for judicial analysis. In those rare cases, assessing
whether the executive has acted within a range of acceptability and
defensibility is beyond the court’s ken or capability, taking courts beyond the
proper role within the separation of powers” (para 66)

Duty to Consult:
• The Federal Court of Appeal found that the duty to consult did
not arise in these circumstances:
• Adverse effects to Canada-China FIPA on the Hupacasath were speculative
• Investment in Canada does not necessarily lead to a conclusion that Aboriginal rights
will be affected
“The problem with the appellant’s submission is that notwithstanding the existence of
other agreements, there is no evidence deserving of sufficient weight that these
agreements are causing or might cause Canada to make decisions that are contrary to
law. In particular, there is no evidence that those agreements are causing Canada to
make decisions that do not respect Aboriginal rights (para 91)”

What can we retain from the decision?
• Although the Hupacasath First Nation was unsuccessful in its
claim, this decision is significant as it states the authority of
the Federal Court of Appeal with respect of the Federal
Court’s jurisdiction vis-à-vis Crown prerogative and the
review of executive authority that will be considered non-
justiciable.

Nations?
• Hupacasath First Nation v Canada
(Ministry of Foreign Affairs) 2015 FCA 4
• Would finding of fact differ in context of
broader application?
• Canada’s Aboriginal Population – 1.4 Million
(4% of Canada)
• 634 recognized First Nations governments or
bands
• Reserves cover 28, 000 sq.km. comprehensive
and special claims have brought 1.6 M sq. km.
under Aboriginal control
• New political awareness, important resources,
recognition and strategic allies
• Post Tsilhqot’in and Grassy Narrows First
Nation

Nations?

Nations?
The fundamental objective of the modern law of aboriginal and treaty
rights is the reconciliation of aboriginal peoples and non-aboriginal
peoples and their respective claims, interests and ambitions. The
management of these relationships takes place in the shadow of a long
history of grievances and misunderstanding.
The multitude of smaller grievances created by the indifference of some
government officials to Aboriginal people’s concerns, and the lack of
respect inherent in that indifference has been as destructive of the
process of reconciliation as some of the larger and more explosive
controversies.
Justice Binnie’s unanimous Supreme Court decision Mikisew Cree First
Nation v. Canada (Minister of Canadian Heritage)

Nations?
A NAFTA Chapter 11 challenge:
• Grand River Enterprises Six Nations, Ltd., et al. v. United States of
America
• Claim on behalf of a corporation owned by Six Nations of the Iroquois
Confederation and to members of the Six Nations
• Issue was treatment of “non-participating manufacturers” under the
terms of a settlement agreement between 46 U.S. states and the
major tobacco companies to recoup public monies spent to treat
smoking-related illnesses.

Nations?
Grand River Enterprises Six Nations, Ltd., et al. v. United States of
America’s NAFTA Chapter 11 challenge (continued) :
• Claim based on Articles 1102, 1103, 1104, 1105, 1110
• Aspect of the claim was time barred (3 years limitation period)
• Tribunal found that Grand River and two individual claimants did not
have an investment in the United States
• One individual claimants was found to have an investment but failed
to established a violation of the relevant articles with respect off
reservation sales of cigarettes

Nations?
• Article 1105 case involved a review of arguments on violation of the
Jay Treaty and the UN declaration of the Rights of Indigenous People
and the principles of customary international law
• Nation Chief of the assembly of First Nations endorsed the claim
• Issue of what constitute an investment in context investment was
reviewed

Nations?
Jay Treaty - Article 3
“It is agreed that it shall at all Times be free to His Majesty's Subjects, and to the Citizens of the
United States, and also to the Indians dwelling on either side of the said Boundary Line freely to
pass and repass by Land, or Inland Navigation, into the respective Territories and Countries of the
Two Parties on the Continent of America (the Country within the Limits of the Hudson's Bay
Company only excepted) and to navigate all the Lakes, Rivers, and waters thereof, and freely to carry
on trade and commerce with each other …
No Duty of Entry shall ever be levied by either Party on Peltries brought by Land, or Inland
Navigation into the said Territories respectively, nor shall the Indians passing or repassing with their
own proper Goods and Effects of whatever nature, pay for the same any Impost or Duty whatever.
But Goods in Bales, or other large Packages unusual among Indians shall not be considered as
Goods belonging bona fide to Indians … no Duties shall be payable on any Goods which shall merely
be carried over any of the Portages, or carrying Places on either side, for the purpose of being
immediately re-embarked, and carried to some other Place or Places … “

Nations?
• On issues of (enterprises) tribunal found that the claimant assertion
were too general and lacked specific evidence with respect to Seneca,
law and customs
• With respect to reasonable expectation (Art 1105), claimants argued
that Iroquois Confederation was covered 3 of the Jay Treaty
• “The Tribunal believes that both Parties advanced positions regarding
the state of U.S. federal Indian law that were unjustifiably
categorical.” … “It is clear … that the domestic law is far from
conclusive ….” (para 137-138)

Nations?
Grand River Enterprises Six Nations, Ltd., et al. v. United States of America’s
NAFTA Chapter 11 challenge (continued) :
• “The evidence before the Tribunal has shown mane of the actual or
potential effects of the MSA and related measures on reservation tobacco
sales and distribution to reservations retailers. The United States federal
government admits to the need for consultations with indigenous
communities on legislative and administrative measures affecting them, as
a matter of federal policy if not as a matter of international law.” (para 212)
• Tribunal found that the individual claimant had failed to meet the burden
of proof in the circumstances and that the economic loss was insufficient to
amount to expropriation

Nations?
• However as with the Hupacasath case, it is arguable that a broader
based case with a stronger argument as to what constitute an
establishment under First Nation law, may lead to different result.

Nations?
NAFTA - Art 1139 […] investment means:
(a) an enterprise;
(b) an equity security of an enterprise;
(c) (c) a debt security of an enterprise
(i) where the enterprise is an affiliate of the investor, or
(ii) where the original maturity of the debt security is at least three years, but does not
include a debt security, regardless of original maturity, of a state enterprise;
(d) a loan to an enterprise
(i) where the enterprise is an affiliate of the investor, or
(ii) where the original maturity of the loan is at least three years, but does not include
a loan, regardless of original maturity, to a state enterprise;

Nations?
[…] investment means (continued):
(e) an interest in an enterprise that entitles the owner to share in income or profits of the enterprise;
(f) an interest in an enterprise that entitles the owner to share in the assets of that enterprise on dissolution,
other than a debt security or a loan excluded from subparagraph
(c) or (d);
(g) real estate or other property, tangible or intangible, acquired in the expectation or used for the purpose of
economic benefit or other business purposes; and
(h) interests arising from the commitment of capital or other resources in the territory of a Party to economic
activity in such territory, such as under
(i) contracts involving the presence of an investor's property in the territory of the Party, including turnkey or
construction contracts, or concessions, or (ii) contracts where remuneration depends substantially on the
production, revenues or profits of an enterprise;

Nations?
but investment does not mean,
(i) claims to money that arise solely from
(i) commercial contracts for the sale of goods or services by a national or enterprise
in the territory of a Party to an enterprise in the territory of another Party, or
(ii) the extension of credit in connection with a commercial transaction, such as trade
financing, other than a loan covered by subparagraph (d); or
(j) any other claims to money, that do not involve the kinds of interests set
out in subparagraphs (a) through (h);
investment of an investor of a Party means an investment owned or
controlled directly or indirectly by an investor of such Party;

Nations?
but investment does not mean (continued):
investor of a Party means a Party or state enterprise thereof, or a national or an
enterprise of such Party, that seeks to make, is making or has made an investment;
investor of a non-Party means an investor other than an investor of a Party, that
seeks to make, is making or has made an investment;
New York Convention means the United Nations Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958;
Secretary-General means the Secretary-General of ICSID;
transfers means transfers and international payments;
Tribunal means an arbitration tribunal established under Article 1120 or 1126; and
UNCITRAL Arbitration Rules means the arbitration rules of the United Nations
Commission on International Trade Law, approved by the United Nations General
Assembly on December 15, 1976

Nations?
NAFTA Article 1139
• investment of an investor of a Party means an investment owned or
controlled directly or indirectly by an investor of such Party;
• investor of a Party means a Party or state enterprise thereof, or a
national or an enterprise of such Party, that seeks to make, is making
or has made an investment;

to the 21st Century
NAFTA Strategies

NAFTA Strategies
“The Columbia River Treaty
has had devastating effects
on Aboriginal Title and
Rights, including
throughout the Arrow
Lakes area which is vitally
important to the Okanagan
Nation Alliance.”

NAFTA Strategies
“When all the trees have been cut down, when all the
animals have been hunted, when all the waters are polluted,
when all the air is unsafe to breathe, only then will you
discover you cannot eat money.”
Cree Prophecy

NAFTA Strategies
“Treat the earth well.
It was not given to you by your parents,
it was loaned to you by your children.
We do not inherit the Earth from our Ancestors,
we borrow it from our Children.”
Native Proverb

NAFTA Strategies
NAFTA Options :
•NAFTA Chapter 11 – an investment
•Aboriginal Title
•Aboriginal Rights
•Aboriginal Title as Basis for Claim
•Claim to Aboriginal Tittle
•First Nation Investor – Sovereignty/Duel Nationality

to the 21st Century
Beyond NAFTA

Beyond NAFTA
Broader Options:
“He who would do great things should not
attempt them all alone.”
Seneca proverb
Government?
“It is time for a renewed, nation-to-nation
relationship with First Nations peoples, one
that understands that the constitutionally
guaranteed rights of First Nations in Canada
are not an inconvenience but rather a sacred
obligation."
PM Justin Trudeau

Beyond NAFTA
“I know that a prime minister of Canada needs to be
deeply respectful of the other levels of government -
whether it be municipal, provincial, or … nation-to-
nation relationships with aboriginal governments.”
Prime Minister Justin Trudeau

Beyond NAFTA
“We owe the Aboriginal peoples a
debt that is four centuries old. It is
their turn to become full partners
in developing an even greater
Canada. And the reconciliation
required may be less a matter of
legal texts than of attitudes of the
heart.”
Former Governor General Romeo
LeBlanc

Beyond NAFTA
“Prime Minister Justin Trudeau appeared to back away Wednesday from an
election pledge that First Nations would have a veto over natural resource projects
on their territories. During a joint press conference whether he would still stick to
his pledge that a First Nation’s no meant “no” on TransCanada’s proposed cross-
country Energy East pipeline project and Kinder Morgan’s Trans Mountain pipeline
project in British Columbia.
The prime minister responded saying that he was committed to a “renewed
relationship” with First Nations that “respect inherent and treaty rights.” He said
the federal Liberal government looked to “First Nations and Indigenous peoples as
partners in all that happens in this land.”
[http://aptn.ca/news/2016/02/04/trudeau-election-pledge-on-first-nation/]

Beyond NAFTA
“Our land is more valuable than your money.
It will last forever.
It will not even perish by the flames of fire.
As long as the sun shines and the waters flow, this land
will be here to give life to men and animals.”
Chief Crowfoot, Siksika (circa 1825-1890)

Beyond NAFTA
“We do not inherit the earth from our ancestors, we
borrow it from our children.”
Unknown, Haida Indian Saying

Beyond NAFTA
"The United States and Canada
share the goal of enhancing shared
prosperity, creating jobs, protecting
workers and the environment, and
promoting sustainable economic
development. Recognizing that the
Trans-Pacific Partnership, which links
together countries that represent
nearly 40 percent of global GDP,
would advance these objectives,
Canada and the United States are
working to complete their respective
domestic processes."
President Barack Obama and Canadian
Prime Minister Justin Trudeau

Beyond NAFTA
Strategic Allies -
“The controversial but not-yet-ratified trade agreement could tie the hands of the Trudeau Liberals
on two key parts of its agenda — fighting climate change and repairing relations with aboriginal
people, the Nobel-winning professor Joseph Stiglitz warned ….”
CBS News
“A Dirty Deal …”:
• Sierra Club
• “The Trade Justice Network is comprised of environmental, civil society, student, Indigenous,
cultural, farming, labour and social justice organizations that have come together to challenge the
scope and secret negotiating process of most free trade agreements.”

Beyond NAFTA
Council of Canadians co-
releases paper that says
ISDS must be rejected to
protect the climate…
[http://canadians.org/blo
g/council-canadians-co-
releases-paper-says-isds-
must-be-rejected-
protect-climate]

Beyond NAFTA
“In our every deliberation, we must consider the impact
of our decisions on the next seven generations.”
Iroquois Maxim

Free-Trade / Fair Trade -- From the 20th Century to 21st Century

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