al agreement with the US concerning water conservation that would explicitly recognize the sovereign authority of both Canada and the US to ban, embargo or tax water exports, in whatever form, or mode of withdrawal. That treaty should include a clause asserting the paramountcy of its provisions should conflicts arise with other international agreements including those concerning trade, investment and services. In ConclusionAs we have noted, in offering our opinion on the questions you have asked that we address, we have adopted a conservative approach that we feel is justified given the enormous uncertainties and risks that abound in this context. Taking this approach, we do not believe that it is possible to craft effective water export control measures that would not be in breach of Canada’s obligations under both the WTO and NAFTA. However, the potential for such conflicts should not delay action by the federal government to ban water exports. Indeed for the reasons noted, delay in doing so is likely to further limit Canada’s options should water export undertakings proceed in the absence of federal statutory prohibition. To assure the integrity of such export controls, we believe that it is also necessary for the federal government to negotiate international measures that would safeguard such controls from challenge under the international trade and investment agreements to which it is a party. Conflicts with the provisions of both WTO and NAFTA need to be addressed, in this regard. But of these two trade agreements, NAFTA is by far the most problematic. Not only does it foreclose policy and regulatory options that would be available under WTO rules, but it accords foreign investors direct access to powerful international dispute resolution processes to enforce the broadly framed rights NAFTA creates to their benefit. For this reason, addressing the constraints imposed on Canadian policy and regulatory options establis...
