This is a guest post from Risa Schwartz, a sole practitioner based in Canada focussing on the intersections between international trade and investment law and Indigenous rights (@risaschwartzlaw, risa@risaschwartzinternationallaw.com)
The United States-Mexico-Canada agreement includes a new provision for the protection of the rights of Indigenous peoples. This exception, found in Chapter 32, Exceptions and General Provision, was included at the behest of Canada, but is drafted to apply to all three parties of USMCA.
Found at Article 32.5, the new exception reads:
Indigenous Peoples Rights
Provided that such measures are not used as a means of arbitrary or unjustified discrimination against persons of the other Parties or as a disguised restriction on trade in goods, services, and investment, nothing in this Agreement shall preclude a Party from adopting or maintaining a measure it deems necessary to fulfill its legal obligations to indigenous peoples. United States-Mexico-Canada Agreement
Canada takes the position that “Canada’s obligations to Indigenous peoples under the Canadian Constitution cannot be superseded or undermined by commitments under a free trade agreement”[1]. However, the addition of a general exception language to USMCA makes it clear to states and foreign investors that USMCA parties are free to meet their legal obligations to Indigenous peoples without concern that such actions may run afoul of trade or investment rules. Perhaps most importantly, this exception will apply to all three states, which is a confirmation that Canada, Mexico and the United States have affirmed their commitment to Indigenous rights in an international economic agreement.
The general exception provision for Indigenous peoples is a first for North America but it is not the exception for Indigenous peoples in a free trade agreement. The Treaty of Waitangi exception was developed by New Zealand in 2001 for a bilateral free trade agreement with Singapore and is found in all New Zealand trade agreements, including the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). According to New Zealand’s Foreign Affairs and Trade website, “Nothing in this new Agreement will prevent the Crown from meeting its Treaty obligations to Māori. As with all of New Zealand’s contemporary trade agreements, CPTPP includes a specific provision preserving the pre-eminence of the Treaty of Waitangi in New Zealand.”[2] The Treaty of Waitangi exception allows for the “…adoption by New Zealand of measures it deems necessary to accord more favourable treatment to Maori in respect of matters covered by this Agreement, including in fulfilment of its obligations under the Treaty of Waitangi.”[3]
Similar to the USMCA exception, a measure taken by New Zealand cannot be “used as a means of arbitrary or unjustified discrimination…or as a disguised restriction on trade in goods and services or investment…” . As well, the measure must be deemed necessary by New Zealand, and the exception is drafted in a manner that is self-judging. The arbitrary and unjustified discrimination language is a clear reference to the chapeau of GATT Article XX. Trade policy analysts and trade lawyers may be comfortable with this language and find it to be protective, but there were concerns by many Māori groups that the exception language did not go far enough to protect their interests, especially in the CPTTP, which includes an Investment chapter with Investor-State Dispute Settlement. A challenge to whether the exception was protective of Māori interests was the subject of a Waitangi Tribunal Report issued in 2016[4]. The Tribunal concluded that the exception offered a reasonable degree of protection to Māori interests. However, they were concerned by the language that limited the exception to measures that accord more favourable treatment.
The USMCA has done away with the limiting language of “…to accord more favourable treatment” as it can apply to any measures that the Parties take to fulfil their legal obligations to Indigenous peoples, as long as the measure is not arbitrary or unjustifiable discrimination.
Canada has included a footnote, which is added as a clarification, which specifies Canada’s legal obligations to Indigenous peoples. Mexico and the United States did not add any footnotes to Article 32.5. The Canadian footnote reads “For greater certainty, for Canada the legal obligations include those recognized and affirmed by section 35 of the Constitution Act, 1982 or those set out in self-government agreements between a central or regional level of government and indigenous peoples”. Section 35 of the Constitution Act, 1982 recognizes and affirms existing Aboriginal and treaty rights and rights acquired through land claims. The legal obligations listed in the footnote should not be seen an exhaustive list, as noted by the use of the word “include” in the footnote. Arguably, legal obligations applicable to Indigenous peoples Canada, as well as in Mexico and the United States, include Indigenous rights in the United Nations Declaration on the Rights of Indigenous Peoples which was adopted by Mexico in 2007 and subsequently endorsed by the United States and Canada
[1] Government of Canada, “Trade and Indigenous peoples issue summary” online: http://international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/usmca-aeumc/indigenous-autochtones.aspx?lang=eng
[2] New Zealand Foreign Affairs and Trade, “Protections” online: https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-concluded-but-not-in-force/cptpp/understanding-cptpp/protections/
[3] New Zealand Foreign Affairs and Trade ,The Agreement between New Zealand and Singapore on a Closer Economic Partnership (CEP) 1 January 2001. Article 74. Online: https://www.mfat.govt.nz/assets/FTAs-agreements-in-force/Singapore-FTA/NZ-Singapore-CEP-full-text.pdf
[4] Waitangi Tribunal Report on the Trans-Pacific Partnership Agreement (Wai 2522, 2016). Online: https://forms.justice.govt.nz/search/Documents/WT/wt_DOC_104833137/Report%20on%20the%20Trans-Pacific%20Partnership%20Agreement%20W.pdf
