A long and illuminating opinion piece on Canadian water policy includes this interesting passage:
The Mulroney government introduced the last national water policy and made a weak attempt to legislate a ban on water exports. A bill was introduced, but died on the order paper when an election was called.
Then came the Canada-U.S. Free Trade Agreement, followed by the North American free-trade agreement. Water was not explicitly excluded from NAFTA. Instead, a side statement by the leaders of Canada, the U.S. and Mexico said that water in its natural state was not considered a tradable good.
However, after NAFTA was signed, the federal government received legal advice that it could no longer ban water exports without breaking the treaty.
Meanwhile, back in the U.S., the State Department and trade authorities keep ducking a similar question -- do the provisions of NAFTA open up fresh water resources like the Great Lakes to investor claims once a trade in water begins (as some would say it has through water bottling) -- thereby negating a ban on exports?