NAFTA dispute over Quebec 2,4-D ban settled

Dow AgroSciences and the federal government have reached a settlement of the U.S. ag chem firm's challenge of Quebec's ban of certain uses of the herbicide 2,4-D.

The agreement, signed Wednesday, ends Dow's 2009 challenge of Quebec's ban under Chapter 11 of the North American Free Trade Agreement, which contended that the province's 2006 ban put Canada in breach of its NAFTA obligations.

No money changes hands in the settlement and Quebec's ban on a number of non-crop uses of 2,4-D is upheld and unchanged, the agreement says.
Dow Agro, which had originally sought US$2 million in damages, will waive its claims and instead gets the Quebec government's public acknowledgement of the position of Health Canada's Pest Management Regulatory Agency (PMRA) on 2,4-D.

Specifically, Dow Agro said in a release Wednesday, the settlement agreement calls for the Quebec government to agree that "products containing 2,4-D do not pose an unacceptable risk to human health or the environment, provided that the instructions on their label are followed," as per PMRA's 2008 re-evaluation of the chemical.

Dow Agro said the Quebec ban had been imposed "despite advice received by the government of Quebec's own officials that there was no scientific basis for this ban, and despite numerous attempts by Dow AgroSciences Canada to work with the government of Quebec in using a science-based, transparent policymaking framework for its decision on 2,4-D."

Quebec's formal agreement on the safety of 2,4-D "is consistent with regulatory findings in the United States and in the European Union," Jim Wispinski, CEO of Dow AgroSciences Canada, said in the company's release.

The settlement is "positive for our company, our value-chain partners and most importantly, our customers," he said, also thanking the federal government for its role in reaching the settlement, "which avoids a lengthy and costly NAFTA case."

"Right of governments"

Ed Fast, the new federal minister for international trade, said in a separate release Friday that the agreement demonstrates the value of the investor dispute settlement mechanism in NAFTA.

The agreement was reached without resorting to arbitration, the international trade department noted.

The deal "also confirms the right of governments to regulate the use of pesticides," Fast said. "This right will not be compromised by Canada's participation in NAFTA or any other trade agreement."

The deal also emphasizes that the agreement "shall not be used except for the sole purpose of giving effect to its terms," meaning it can't be used by the federal or Quebec governments or by Dow Agro in any other cases.