By Lori Wallach and Todd Tucker*
Two developments this week provided further illustration
that the current NAFTA-WTO model of trade and globalization is fundamentally
Exhibit A: One of the most contentious issues surrounding
the congressional debate on the massive stimulus bill designed to jump start
the sinking U.S. economy was... a provision on "Buy America" rules for iron and
steel in public works projects?! Opponents of the measure - which include some
of the nation's leading offshorers of U.S.
jobs, such as GE and Caterpillar - decried the plan to invest our tax dollars
in the U.S.economy as a declaration of war against "free trade," and claimed that the
measure was WTO-illegal. (As it turns out, on the
WTO-legal business, the corporates are lying, as we
show here in a detailed memo.)
Exhibit B: The Bush
administration, in its final week in office, imposed tariffs of up to 300
percent on French Roquefort cheese, and extended punitive tariffs on truffles,
Irish oatmeal, Italian sparkling water and foie gras. The reason? In the 1990s,
the Europe Union (EU) had banned the use of artificial hormones for raising
beef in response to health concerns. The Clinton
administration, at the urging of giant agribusiness companies, challenged this
measure at the WTO because it not only banned the chemicals' use by European
farmers, but banned imports of artificial-hormone-raised beef. A WTO tribunal ordered
the EU to allow in the U.S.
beef, and when EU officials, under threat of a massive consumer revolt,
refused, the WTO authorized the U.S.
to impose retaliatory sanctions. (Canada also sought and received
When a country's state, local or national policy is ruled
against at the WTO, federal authorities are required to take all available
steps to force a change in the law - otherwise, they risk facing perpetual
trade sanctions. It's a fairly powerful system: in the nearly 15-year history
of the WTO, countries have always watered down or eliminated the challenged
laws, including in the cases brought against U.S. laws (which we've lost nearly
90 percent of, by the way). There's only been one exception, and that's the beef-hormone
case. The Europeans - in an admirable display of moxie - decided that ensuring
consumer safety was their top priority. Although they've been paying out their
pound of flesh for a decade - at a rate of over $120 million per year since 1999
- the Europeans apparently weren't suffering enough, and Bush upped the
cross-sanctions on his way out the door.
larger question raised by these two conflagrations is why political leaders
signed up food-safety and government procurement rules - both quintessential,
non-trade domestic issues - to comply
with so-called "trade" agreements in the first place. A big part of the answer
is that they were pushed by companies like GE and Caterpillar and large
agribusiness multinationals, who enjoy wild privileges under these pacts that
encourage the offshoring of U.S.
jobs. Since then, corporations have used the overreaching "trade" agreement
rules to attack an array of important non-trade, public-interest policies. The
latest installment is the current scare campaign to water down Congress'
response to the economic crisis, and gin up the attack on important food-safety
- not just the U.S.,
but all nations - should have a right to invest in themselves, spend their tax
dollars in the manner deemed best by their democratically elected officials, and
pursue other public-interest policies. President Obama and the last
two classes of freshmen
members of Congress came to office on pledges to overhaul the failed globalization policies of
the past, and pursue global integration and cooperation on fairer terms.
Let's hope that they stand their ground: our future prosperity and security
depends on it.
*The writers are director and research
director, respectively, of Public
Citizen's Global Trade Watch division. They blog at EyesOnTrade.Org.