States Take Action to Change Our
Failed Trade Policy
Last year's midterm elections brought to Congress a new wave of fair trade supporters, with 30 House and 7 Senate fair traders campaigning and winning on a demand for a new trade policy replacing NAFTA-WTO-Fast Track supporters. This national trend sounded a loud and clear message: Americans don't want more of the Bush administration's failed trade agenda.
The Bush administration's response to this national call for change has been "stay the course." President Bush has launched a campaign insisting that Congress grant him more of the extraordinary Fast Track trade authority after it sunsets on June 30, 2007.
This administration's main theme is abuse of power. The American public is clear in its view, as the polling shows over and over: this president does not deserve more authority over anything, much less the future of the global economy.
But, this is not just a problem with President Bush and what he would do with Fast Track authority. The problem is ultimately Fast Track itself - the undemocratic Nixon-era law that transfers Congress' constitutionally-mandated control over U.S. trade agreements to the White House. During the past few years, state legislators from coast to coast have been busy making sure Congress understands that Fast Tracked trade agreements pose a real threat to state and local regulatory authority. The only way to ensure we can enjoy the benefits of trade without having the fundamental tenets of our democracy, such as federalism and checks and balances, traded away is by changing the way in which the United States negotiates trade agreements.
View from the Hill: Trade Update from Washington, D.C.
The new fair trade majority in Congress is eager to work with the House and Senate leadership to develop a strong U.S. trade policy that reverses President Bush's current course. In March, leaders from the Ways and Means committee took the initiative and submitted a proposal to the Bush administration to tackle some of the most egregious elements included in recent free trade agreements with Peru, Colombia, Panama and South Korea. The one-page summary (PDF) of the proposal, released by Ways and Means Chair Rangel (D-N.Y.) and Trade Subcommittee Chair Levin (D-Mich.), takes important steps in the right direction by demanding these trade deals are reopened and renegotiated to add enforceable labor and environmental standards in their core texts; to remove certain drug patent extensions that would cut poor consumers' access to medicine; to demand foreign investors not have greater rights than U.S. investors; and to fix the port security issue. The administration initially made positive comments on the Democrats' effort, but has not agreed to the demands. (And in fact, the administration announced a new Korea Free Trade Agreement that did not include many key demands of the Democrats.)
The House trade committee's full 15-page proposal to the White House has not been made available. However, we are aware that some of the issues paramount to state and local concerns have not been addressed. This includes the agreements' threats to prevailing wage laws, "Buy America" or anti-offshoring laws, and recycled content or renewable energy procurement requirements. Also the question of how the Ways and Means leaders' proposal deals with these agreements' inclusion of NAFTA-style Chapter 11 foreign investor protections and the drug access is ambiguous. Missing altogether is any remedy for the restrictive service-sector rules that would lock in Social Security privatization in Peru and contribute to the erosion of state regulatory authority in the United States.
Much more work still needs to be done to ensure future trade agreements are not NAFTA-WTO type pacts that undermine state sovereignty and hurt workers and the environment. A group of House members, including the freshmen fair trade leaders, is developing a letter asking to work with the trade committee to build on the proposal and thanking the leaders for their important initiative.
Whatever happens with the discussions around "fixing" the current agreements negotiated under Fast Track, the main focus for remedying state and local concerns must be ensuring that Fast Track is replaced!
States Tell Congress: Replace the Fast Track Negotiating System and Safeguard State Sovereignty
States have a unique role to play now to ensure that U.S. trade policy does not undermine state sovereignty and state policy space. Notably, legislators in nine states are looking to pass bills that ensure the state legislature has the power to decide if their state will be bound to the non-tariff terms of "trade" agreements. Concurrently, state legislators have introduced resolutions that urge Congress to replace Fast Track with a more democratic and accountable policy-making procedure, which would include a guarantee that the federal government must obtain states' explicit approval - their prior informed consent - before states can be bound to the non-tariff terms of all future trade agreements.
Over a dozen states from every region of the country have introduced such resolutions. Montana's own Senator Max Baucus, Chair of the Finance committee which oversees trade policy in the Senate, heard this message from his constituents via the Montana Senate, which became the first to pass a resolution demanding that Congress replace Fast Track. Other states where legislators have passed a Fast Track resolution include Alabama, Maine and Hawai'i.
Governors are also weighing in on U.S. trade policy, specifically on alarming proposals to impose a blanket set of restrictive rules on domestic regulations under the WTO's General Agreement on Trade in Services (GATS). At the end of March, Governors Gregoire from Washington, Rendell from Pennsylvania and Spitzer from New York wrote to the United States Trade Representative (USTR) expressing their concern about the ongoing negotiations and urging the USTR to reject any proposal that restricts states' authority to regulate services. Read the letter here (PDF).
States can play a critical role in urging Congress and USTR to changed the failed NAFTA-WTO model of "trade" agreements and obtain better international commercial agreements that actually benefit the majority of people here and abroad. With the sunset of Fast Track authority approaching this summer, we have a once-in-a-decade opportunity to create basic guidelines for a new trade negotiating process that carves out a formal role for states in order to ensure meaningful consultation and to change the course of our trade policy.
To join the network of state legislators and officials working to preserve state sovereignty in trade agreements or 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's Global Trade Watch