Trade Pacts Threaten Sovereignty

Charles W. Jones, International President Emeritus

NAFTA, FTAA, and the WTO may force Canada and the U.S. to lower our standards to match third-world countries

In the past five years, a quiet revolution has been occurring in the world of international trade. You might even call it a silent coup, because in a sense a small group of people is seizing the reins of governments all around the world.

No government leaders have been assassinated, and the media and ordinary citizens have not even noticed that it is occurring, but the World Trade Organization (WTO) has been helping its member nations create trade agreements that may threaten those nations' ability to enact and enforce laws that protect their citizens.

Agreements like the North American Free Trade Agreement (NAFTA) and the Free Trade Area of the Americas (FTAA) have provisions that can, in some circumstances, compel the signatory nations to change their laws or face sanctions. Worse than that, these trade agreements will cause countries with high standards for the environment, safety, labor protections, and other protections, to lower their standards in order to avoid sanctions.

In fact, they already have.

Production methods can't be used to limit imports

The WTO was formed in 1995, a successor of sorts to the General Agreement on Tariffs and Trade (GATT). After World War II, GATT was created to facilitate commerce among nations.

The WTO now meets regularly to do just that. Their main focus is the promotion of international trade agreements that promote unrestricted investment and trade across borders.

When a country's laws restrict trade, the WTO places sanctions on that country until it changes the law. The pursuit of unrestricted trade threatens the sovereignty of all nations in the WTO.

For example, in 1991, Mexico sued the United States, saying that the U.S. Marine Mammal Protection Act (MMPA) unfairly limited their ability to export tuna to the U.S. The MMPA sets standards for catching tuna. Mexican fishermen didn't meet those standards, so the U.S. would not allow them to export tuna into our country.

Mexico took their complaint to an international panel. The panel reported this finding: the U.S. could not enforce this law because the law dealt with process, not product.

That is, there was nothing wrong with the product; the tuna met international standards. The problem was in how the tuna was produced.

This ruling set two troubling precedents

First, an international panel of government appointees (with no Americans) decided whether the U.S. can enforce a law enacted legally under the U.S. Constitution.

Second, the reasoning behind their ruling paves the way for other countries to use lawsuits to rewrite U.S. laws. And although these countries do the suing (per international agreements), they do so on behalf of the corporations producing the goods.

In other words, multinational corporations can use international trade agreements to strike down laws if the law pertains to the process of production, and not the product.

For example, laws barring imports of products made with slave labor or exploitative child labor would not be enforceable, because those laws deal with process, not product.

International panels are not required to rule on the law itself. In fact, they are barred from that. They only decide whether the rules of GATT or NAFTA or some other trade agreement apply.

Their main concern is whether the law in question restricts trade. If it does, they may rule in favor of the plaintiff.

The problem with that should be obvious: every developed country has thousands of laws on the books that are intended to restrict trade because it harms their citizens.

We restrict what kinds of chemicals you can put in food. We restrict what kinds of pesticides farmers can use. We restrict trade in unsafe toys, in prescription drugs, and in hazardous waste.

Not all trade restrictions are evil. Some are necessary for the proper functioning of a civilized society.

Corporations rule the WTO

The problem is that multinational corporations decide trade policy, not citizens. Corporations rule the WTO.

In theory, each country's trade representatives represent the people of that country; in practice, they represent the corporations of that country.

Every person in the U.S. trade representative's office has a corporate background. No labor leaders are included. No environmentalists. No consumer safety advocates.

The only people at the table are corporate representatives. Corporations always profit from lowering trade restrictions; the rest of us profit sometimes, but often we do not. Our representatives should be at the table, too.

And trade agreements should be negotiated in full view of the people affected by them. Trade agreements have the force of law, so they should be enacted just as laws are. The WTO operates sub rosa, behind closed doors in absolute secrecy. We can't review their decisions. We don't hear their arguments. We don't even know who is in that room.

Trade agreements brokered behind closed doors benefit corporations at the expense of workers -- especially the workers in the third-world countries that these agreements are supposed to help. Just look at NAFTA. Mexican workers are worse off than ever, while the multinational corporations that employ them are reaping huge profits.

The World Trade Organization is nothing more than an attempt by multinational corporations to establish a corporate dictatorship over every nation on earth. If they succeed, our laws will mean nothing, our constitution will mean nothing, and the will of the people will mean nothing.

They will be able to use international agreements to drive wages, working conditions, environmental laws, and health standards down to the level of the most impoverished countries.

Our courts and legislatures will be powerless to stop them.