Trade News for State & Local Officials

August 2006

WTO Talks Collapse, Fast Track Fight Looms

Invitation to strategy session at NCSL Annual Meeting

While the World Trade Organization's "Doha Round" of trade talks collapsed last month amidst finger pointing and recriminations, state officials may want to note an equally important milestone - the means by which the White House sets trade policy, known as "Fast Track" Trade Promotion Authority, expires in July 2007.

The expiration and the anticipated drive by the Bush administration to reauthorize Fast Track means that next year will be a once-in-a-decade opportunity for states to change the trade policymaking process. A new process is needed to ensure early, informed and meaningful consultation with state officials and require states' prior informed consent to any provision in any trade agreement that impacts their regulatory authority.

Public Citizen cordially invites you to a special breakfast during the Annual Meeting of the National Conference of State Legislatures in Nashville, Tennessee on Wednesday, August 16th 2006 from 7:30 to 8:30 a.m. Here, you will be able to share ideas and information with other state legislators, as well as learn:

  • The latest on the collapse of WTO talks and the fate of service sector negotiations
  • How to introduce a model bill or resolution in your state that demands states be given a formal role in the trade negotiation process
  • Methods of mobilization and action to ensure real change at the federal level

or e-mail Sehar Raziuddin for more information

Background on WTO Talks and the GATS

In recent months, states have been voicing their concerns about the expansion of the GATS - the WTO's General Agreement on Trade in Services - which sets rules over service sectors. The GATS places limits on the types of domestic policies federal, state and local governments can enact with regard to control and ownership of public services and regulation of private-sector service providers.

The collapse of the WTO talks means state officials can rest assured for now that federal trade negotiators will not be making any new sweeping GATS commitments through the WTO. Make no mistake however, multinational insurance firms, for-profit education providers, and mega-retailers eager to push the GATS are already looking ahead to the next major trade fight in the United States - the sunset of Fast Track. In the end, these multinational businesses know that they will only get their GATS agenda through Congress by squashing any new proposals for democratic means of negotiating trade and instead sticking with the fundamentally undemocratic Fast Track mechanism.

The Failed Fast Track Model

Under Fast Track, Congress' Constitutional authority to negotiate the terms of trade terms is delegated to the Executive Branch. The Executive Branch negotiates the trade agreement, signs it and writes the implementing legislation. Congress' role is reduced to a "yea" or "nay" vote with no amendments. This terrible process was used not only to pass NAFTA and WTO with little debate or scrutiny, but also the more recent regional and bilateral pacts including the Central America Free Trade Agreement (CAFTA) and the Oman Free Trade Agreement (OFTA). For state officials, a key point of concern is how Fast Track entirely excludes state interest and input from state legislators.

The United States Trade Representative (USTR) has abused the power it has accrued under Fast Track to negotiate provisions in international agreements that undermine many areas of traditional state and local authority under the U.S. system of federalism, such as zoning and land use, health care, gambling, education and more. USTR overreaches in these areas have fueled the growing opposition to U.S. trade policies by state and local officials including by Governors, Attorneys General, State Legislatures, State Courts and others.

Needed: A New Process for Negotiating Trade

Trade agreements can be made better in numerous ways: by including stronger labor, human rights and environmental standards; by safeguarding every country's right to promote the creation of quality jobs and; by safeguarding domestic regulatory authority. But this will only happen if the trade policymaking process becomes more democratic and engages states meaningfully in negotiations of trade agreement rules that impact their regulatory authority.

The pending legislative fight in 2007 over the sunset of Fast Track provides states with an unprecedented opportunity to get ahead of the curve and demand that Fast Track be replaced. What is needed is an explicit mechanism for consultation with state and local officials before the federal government negotiates any trade agreements - a system of prior informed consent.

Public Citizen looks forward to discussing Fast Track and the opportunities for creating a more democratic alternative with you at the NCSL Annual Meeting in Nashville. Let's capitalize on this unique historical moment, when the global trading system is in temporary disarray, to press for the type of trade policies that benefit workers, consumers and the environment, and respect state sovereignty and our system of checks and balances.

To learn more about how international "trade" agreements undermine state and local authority, please contact Saerom Park at 202-454-5127 or Sehar Raziuddin at 202-454-5193.

Thanks for all that you do.

Public Citizen

Safeguard State Sovereignty!

Contact Sehar Raziuddin to find out what you can do in your state to safeguard state and local authority over higher education, health care, zoning and land use, energy and more from encroaching international "trade" agreements.

Trade Action in State Capitols

State legislators are working to make the trade policymaking process more open and accountable. Highlights to date for 2006 include:

  • Rhode Island - Rhode Island's General Assembly overrode Governor Carcieri's veto of HB 6885, following Maryland's lead. This historic act ensured that state legislators, and not just governors, will decide whether or not the state should be bound to the procurement terms of trade agreements.
  • Vermont - Governor Douglas signed H0109, which established a new Vermont Commission on International Trade in order to examine the impact of trade agreements on state and local laws, state sovereignty and the business environment.
  • Colorado and Hawaii - The legislature in these states both passed bills that would prohibit the governor from unilaterally signing the state on to trade agreements. Not surprisingly, both Governor Owens (CO) and Governor Lingle (HI) vetoed HB06-1010 and HB2199, respectively.
  • Iowa, Oregon, Maine and Michigan - In efforts to safeguard their states' authority, four governors recently took the unprecedented step of writing to the United States Trade Representative (USTR) to request that their state be excluded from being bound to GATS rules in important areas of state regulation such as health care, higher education, and zoning. Read the letters from Governor Baldacci (Maine), Kulongoski(Oregon), Granholm (Michigan) and Vilsack (Iowa) to the USTR.

Take Action!

The USTR must be required to respect the decisions made by states. The only way to force Congress to change the federal law is to create resistance on the state level from the bottom-up. State legislators must act together to replace Fast Track and restore state authority!

Steps to create a system of prior informed consent may include:

  • Passing Legislation - Concerned legislators can follow Maryland and Rhode Island's lead and pass legislation that requires state legislative approval in order for the state to be bound to the terms of international trade agerements.
  • Passing Resolutions - States can pass resolutions critical of the current failed model of state consultation and supporting a Fast Track replacement. This is an important part of states standing up to the USTR.
  • Forming Commissions on Trade - States can follow Vermont's lead and establish a Trade Commission to examine the impact of trade agreements on state and local laws.
  • To learn more about how you can do this in your state, contact Sehar Raziuddin or attend the Global Trade Watch breakfast at NCSL!

Higher Education - Public Good or Lucrative Commodity?

Federal trade negotiators were prepared to trade away Higher Education policies during GATS negotiations. Find out what's at stake!

Read Public Citizen's latest memo on higher education and the GATS.

Worried that your service sector may also be at risk? You can find out by browsing Public Citizen's Searchable GATS Directory!

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