March 2001

Views expressed are those of the authors, not necessarily of the AFSC.

States Take WTO / NAFTA / FTAA in Hand

Dave Lewit is a board member of Boston-based CPPAX (Citizen's for Participation in Political Action).

Growth.  Prosperity.  Democracy.  Human potential.  So "free trade" publicists promise. Decline.  Disempowerment.  Degradation.  Deception.  So various economic and social studies conclude.  The facts and discrepancies are one problem.  Another problem is how to act regarding the rapid expansion of multinational, government-regulating, trade and investment agreements.

Free-Trade Problems

So silent and often indirect are the effects of "free market" economics, they seem like natural evolution--forests disappear, polar ice melts, fish prices rise, shantytowns and homelessness increase, factories automate, guns and fighter planes proliferate, sweatshops spring up, TV-watching peaks, corporate mergers spike, billionaires appear, jobs cheapen, legislators lose discretion.

The World Trade Organization (WTO) and the scheduled Free Trade Area of the Americas (FTAA) are now expanding the General Agreement on Trade in Services (GATS) to strip governments of control of schools, hospitals, prisons, and drinking water.  Other WTO agreements are adding "intellectual property" corporate monopolies including patents on genetically-modified organisms (e.g., food seeds) and pharmaceuticals (e.g., AIDS drugs), both developed partially in tax-supported university laboratories.  FTAA is expected to go even further, adopting NAFTA's audacious Chapter 11 which allows corporations to sue governments for huge damages in secret tribunals, e.g., for anticipated corporate losses due to government regulations that inadvertently hamper business acquisitions, sales, or profits.  This is not natural evolution.  Here we have corporations regulating governments!

Finally, in Seattle at the end of 1999, fifty thousand citizens said "Enough!" to the WTO.  Still, trade officials, in serious dialogue only with orthodox economists and transnational business associations, resist criticism.

State Law Can Spotlight Impacts

Several months ago the Alliance for Democracy (AfD) and Citizens for Participation in Political Action (CPPAX) went to Massachusetts State Representative Byron Rushing with a draft bill to evaluate the impact of these multinational agreements upon the Commonwealth.  This would alert legislators and the public not only to business benefits but to social and environmental costs. It would encourage US congressmembers as well as state legislators to address the problems. 

Rep. Rushing, who sponsored Massachusetts' internationally controversial Burma democracy law, rewrote the draft to create a commission made up of five legislators, the attorney general, the state treasurer, and two persons appointed by the governor.  Nicknamed "Globalization Impact Bill," it charges the commission to "estimate the probable further impacts on state laws and regulations" of the WTO including GATS, and also of NAFTA, FTAA, and similar proposed agreements, as they develop. The commission would report from time to time to the legislature and to the state's federally elected officials, and recommend which provisions the Commonwealth might support or resist.  Look for hearings on Massachusetts H.2119 in March or April.

The California state legislature already has a committee to study impacts of international trade agreements on the state's economy, procurement and trade policies, and environment, health, and human rights concerns.  Bills similar to Massachusetts' have just been filed in Vermont (Rep. Steve Hingtgen), New Hampshire (HB 670, Rep. Chuck Weed), and Maine (LR 178701, Sen. Peggy Pendleton).

States Have Strong Interests

Why should states be interested in international agreements when we have a Congress charged with regulating foreign commerce?  State officials and even congressmembers have been excluded from the development of these agreements.  Congress must play ball with a free-trade "president" and Republican majority who want to bring back "fast track" to ensure secret talks, no ammendments, and a take-it-or-leave-it vote.  Yet it is precisely state and local laws which are most heavily impacted.  Transnational corporations may consider state laws and regulations regarding health, education, water, prisons, labor rights and relations, mining, forests, fisheries, toxic emissions, foreign ownership, corporate regulation, taxation, subsidies, local development, and so on, to be "barriers to trade."  Overall, states spend far more than the federal government to support and enforce such laws which are at risk of forced amendment or repeal by trade tribunals, or huge monetary damages.

Many state representatives and senators know little about such trade and investment agreements and their effects, and may regard them as irrelevant to local concerns. After educating themselves, citizen groups can educate and influence their legislators more easily than congressmembers.  Law professor Robert Stumberg of Georgetown University has studied the impact of multinational agreements on the laws of many states, and can provide guides for state and local investigative commissions.

State and local laws are under the gun, as witnessed by closed-door suits already brought by corporations under NAFTA.  For example, California's law barring the toxic gasoline additive MTBE may halt the pollution of the state's drinking water, but it may cost the US government almost a billion dollars a year to be paid to the Canadian Methanex Corporation, which claims "lost business" as if it were an "expropriation."  The cost may well be passed on to California taxpayers.

Methanex lawyers call it "regulatory takings."  Citizens might also have a watchword--No Negotiation Without Representation!

For more information contact Dave Lewit at 617-266-8687 <DLewit@igc.org> or Eric Weltman at 617-426-3040 <eweltman@cppax.org>

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