The worst kept secret about Chapter 11 of the North American Free Trade Agreement (NAFTA) is that no one, apart from a handful of entrepreneurial lawyers, had an inkling of its value.

By giving rights and legal protections to investors operating across borders, the conventional wisdom was that Chapter 11 would shield Canadian and U.S. firms from arbitrary treatment at the hands of the Mexican government.

Shortly after the NAFTA was signed, however, our government began to receive suspicious-looking mail: Letters of Intent from foreign investors planning to sue us for millions of dollars because our environmental or health regulations cut into their bottom line.

Suddenly, Canadian trade bans on controversial gasoline additives or restrictions on the cross-border trade in toxic waste were challengeable under NAFTA as “expropriations” of an investor’s livelihood.

One might have thought that this unexpected turn of events would have given our government a severe case of writer’s cramp.

But, since the NAFTA came into effect in January 1994, our government has gone on to duplicate most of Chapter 11’s controversial provisions in a series of bilateral investment treaties with sixteen other nations, including Egypt, Costa Rica, Venezuela and Ecuador.

Each of these FIPAs (Foreign Investment Protection and Promotion Agreements) exposes Canada to further potential Chapter 11-style disputes — disputes which are not heard in regular courts but by international panels composed of three trade lawyers.

Investors even get to choose one of the three panellists who will hear their case — a method unsuitable even for choosing local hockey-rink officials. Yet, through these FIPAs, foreign investors enjoy the right to challenge virtually any Canadian law or regulation before secretive and unaccountable international panels.

A spokesperson with the Department of Foreign Affairs and International Trade did tell me that our government is currently reviewing future investment treaties to address certain “shortcomings.” But, he was quick to assure me, Canada continues to pursue new treaties “with as many countries as our resources allow us to.“

It seems that the government still doesn’t quite grasp that these agreements lock Canada into binding legal obligations every time they are signed.

If someone told you that your car needed an overhaul, you would probably park it in the nearest garage until the problems were resolved, not step on the accelerator and try to troubleshoot on the fly.

But the Canadian government, it appears, suffers from an acute case of calligroeconomania: an irrational desire to affix one’s signature to anything touted as a guarantor of further trade, investment or economic growth.

Keep in mind, Canada hardly needs to sign these investment treaties in order to coax investors to our shores. We are not Hazard County, where businesses are shut down according to the caprices of one Sheriff Roscoe P. Coltrane.

On the contrary, our law enforcement resources are too often deployed elsewhere, against our own citizens — democratic idealists with the temerity to raise a placard against unprincipled capitalism or hector dictators, such as former president General Suharto of Indonesia who visited Vancouver in 1997.

Mind you, these investment treaties can be of some use for Canadians investing abroad — which is why most western democracies negotiate such treaties with developing country trading partners. They come in handy if the military seizes your factory or freezes your bank account. However, the vagueness of these treaties, and the fact that these investor rights are largely untested, is now leading to an alarming upsurge in investor litigation around the world — litigation that plays itself out behind closed doors before ad-hoc panels of questionable legitimacy.

In the developing world, western multinational firms are seizing upon these once obscure treaties to challenge government regulations across a broad range of sensitive areas: including newly privatized water and sewage facilities, mining enterprises, and oil and gas exploration.

In Bolivia, a U.S.-led water consortium was the target of country-wide protests after community-based water resources were expropriated and water rates soared. Soon the company’s concession became untenable and officials were forced to flee the country.

Anti-globalization protesters seized upon this as a triumph for people power — until, that is, the consortium dusted off an obscure bilateral investment treaty and demanded twenty-five million dollars from Latin America’s poorest nation.

These days, there is no such thing as a free riot.

These western-conceived treaties also harbour serious potential for “blow-back,” with western nations finding their own public policies challenged by litigious foreign investors, as has already happened under the NAFTA.

Yet, despite these worrying portents, our ship of state resembles that in W.H. Auden’s “Musee des Beaux Arts,” turning “away quite leisurely from the disaster,” and sailing calmly on.

Like a teenager with a new credit card, our government continues to sign on the dotted line, blissfully unconcerned with the future consequences.