rvices rules of NAFTA. These provisions are, as we have also noted, the most problematic constraints on Canada’s ability to ban bulk water exports or diversion. Furthermore Article 315 which establishes a "proportional sharing regime" for all goods, also explicitly limits the application of Article XX. Finally, the wording of Article XX(g), notably that export controls be "made effective in conjunction with restrictions on domestic production and consumption," explicitly precludes the possibility of Canada imposing such export restrictions so that it can manage water resources sustainably and avoid the need to impose domestic restrictions. 6. What would represent the most effective strategy for establishing a ban on bulk water exports or diversions from Canada? 6.1 Federal Legislation to Ban Water ExportsFor reasons that follow from our critique of the proposed Accord, in our opinion the best federal approach for preventing bulk water removals from Canada is the enactment of federal legislation designed specifically for this purpose. In fact, we believe that such legislation is essential if water protection objectives are to be realized. Moreover, for reasons we have described in responding to Question 4, delay in promulgating this legislation may significantly increase Canada’s exposure to trade disputes, or investor claims, particularly if water export initiatives proceed in the absence of a federal statutory prohibition. This may, in turn, create National Treatment obligations that undermine the prerogatives of provincial governments. It also follows from our responses to the other questions, that no matter how carefully designed, Canadian measures to prevent bulk water exports or diversion projects would still be vulnerable to trade challenges and/or investor-state claims. We need to stress however, that the potential for such disputes should not in our view be taken as an excuse for inaction. To do otherwise would not...
