Trade News for State & Local Officials

Summer 2008

Doha Round Negotiations Stalled

On July 29, 2008, the latest World Trade Organization (WTO) Doha Round expansion negotiations came to a screeching halt when a Geneva-based WTO summit designed to wrap up the deal collapsed spectacularly. State legislators can breathe a momentary sigh of relief, and perhaps send thankful thoughts towards the brave negotiators and relentless global civil society activists who helped counter a massive push by many of the world's largest corporations, and a bloc of pro-WTO-expansion governments to boot!

For the time being, with Doha Round negotiations at an impasse, new service sectors that the Bush administration wanted to submit to WTO control - like higher education, public libraries, and construction services - remain outside WTO jurisdiction. However, there is still cause for vigilance. The Doha Round, although stalled, is not dead. Unless a new president demands a fundamental change in the direction of WTO talks, the Doha Round WTO expansion objectives, some of which deeply affect state non-trade policy space, remain lurking on the negotiating table. Indeed, at this moment, interests who have sought to use the Doha Round to impose an array of new policy constraints are trying to get the talks restarted.

In the Doha Round, federal trade negotiators have been working to expand the WTO's General Agreement on Trade in Services (GATS) by signing up more sectors of our service economy to comply with the restrictive rules contained therein. Already the WTO service-sector rules prohibit U.S. federal and state governments from limiting the number of foreign service providers - for instance limiting the number of foreign-owned beach-front hotels or the size of foreign retail outlets, or requiring economic impact analysis for large retailers.

These rules also discourage the creation of new public services or the use of policy tools, such as exclusive service contracts, that many states have considered in their health-care reform debates. They also prohibit certain domestic policies that have the unintended effect of disadvantaging foreign firms, even if those policies were applied equally to domestic and foreign firms. One of the best examples of the WTO services agreement gone wrong for the United States is the 2003 WTO Internet gambling suit - in which a WTO tribunal ruled that the U.S. ability to regulate gambling was extremely limited because "gambling services" were covered by WTO rules.

Join our conference call on Sept 4th to find out more about what your state has at stake in the WTO Doha Round expansion talks. Unless states demand a new direction on the Doha Round talks when a new U.S. president arrives, the threats that states have been combating regarding WTO expansion will remain.


NCSL Labor and Economic Development Committee Rejects Colombia FTA Resolution... Again!

At the annual business meeting of the National Conference of State Legislatures (NCSL) in New Orleans this July, the standing committee on Labor and Economic Development voted down a resolution (PDF download) calling for a vote on the U.S.-Colombia "Free Trade" Agreement (FTA) for the second time in three months. A similar resolution introduced at the NCSL Spring Meeting in April was also rejected by a majority of the committee.

Both resolutions were introduced by Florida's Rep. Juan Zapata (R-Miami). At the meeting, Zapata argued that those state legislators speaking against the Colombia FTA were ill-informed when they raised Colombia's horrific labor and human rights problems. While Zapata is a native of Colombia, his support for the FTA is not shared by the large majority of Colombian civil society (PDF) or indigenous peoples (PDF).

Nearly a dozen legislators spoke in opposition to the resolution, citing the FTA's inconsistency with the committee's position on Free Trade and Federalism. Legislators also shared concerns that a Colombia FTA, which is an expansion of the NAFTA and CAFTA trade model, would result in the same negative outcomes in Colombia and the United States as occurred in member states under the previous trade deals. Among the issues raised were that the Colombia FTA would not only fail to bring promised development in Colombia and jobs to their states, but also provide incentives leading to the offshoring of more jobs from their states and expose domestic regulatory laws to attack by foreign corporations in foreign investor-state tribunals.

Although Speaker Nancy Pelosi (D-Calif.) led the House to vote to remove the Fast Track deadline for a vote on this agreement earlier this year, the Colombian government has amassed a huge lobbying and PR team to push the deal through Congress. Republican Senators have held the federal Trade Adjustment Assistance (TAA) bill hostage, demanding a vote on the Colombia FTA in exchange for allowing a vote to restore the TAA program. (The program provides extended unemployment benefits and training to those displaced by trade, and it has expired!) Opponents of the Colombia FTA in the faith, human-rights, labor and other civil society communities remain concerned that the deal could be pushed for a vote in a lame-duck session of Congress after the elections.

If you are not a member of the NCSL Labor and Economic Development Committee, consider joining and taking part in the debate! Just have your presiding officer send a letter of appointment to William Pound, NCSL Executive Director.


The TRADE Act: A New Trade Model that Safeguards State Sovereignty

For the past several years, state legislators - recognizing that current trade agreements contain provisions that seriously hinder their non-trade law-making authority - have been fighting to restore the balance of powers in the way U.S. trade policy is formed.

This summer, nearly 70 legislators at the federal level have shown that they too share state legislators' concerns.

In June, U.S. Sen. Sherrod Brown (D-Ohio) and Rep. Mike Michaud (D-Maine) introduced the Trade Reform, Accountability, Development and Employment (TRADE) Act with more than 50 diverse original sponsors. This landmark legislation offers a path towards a new globalization policy that can harvest the benefits of trade, without undermining the principles and practice of American democracy, including our systems of federalism and checks and balances. The TRADE Act:

  • Sets forth in detail what future trade agreements must and must not include;
  • Requires the review and remedy of our existing trade agreements;
  • Provides groundbreaking new protections for state sovereignty, recognizing that existing "trade" pacts have inappropriately encroached into states' domestic non-trade policy space;
  • Describes a new presidential trade negotiating process to replace Fast Track, that dramatically improves state-federal consultations by providing states with authority to determine to which investment, service-sector and procurement regulatory terms in trade pacts states will be bound.

Join us for a conference call on 9/4 to hear more about the TRADE Act.

DOES YOUR FEDERAL DELEGATION SUPPORT THE TRADE ACT? Just click here and type in the bill number "HR 6180" to find out. Call Sarah Edelman at 202-454-5193 for more information.

Thank you for all that you do!

Public Citizen's Global Trade Watch

Conference Call Reminder

Tomorrow, September 4th at 4 pm EDT, don't miss it!

Trade Update: WTO Doha Round, TRADE Act & the States

To RSVP for the conference call, email Kate Pollard at: kpollard@citizen.org

State Bills See Interference from China, USTR at Fault?

Another resolution (PDF) considered at the NCSL business meeting this summer addressed the use of trade agreement "rights" for foreign governments to interfere in state lawmaking. The resolution called on the United States Trade Representative (USTR) to "defend states' regulatory powers."

The People's Republic of China has recently challenged several state bills dealing with issues of public health and the environment, claiming that the proposals violate China's WTO rights. One incident was in response to a bill introduced by Maryland's Del. James Hubbard (D-Prince George's) to address the levels of lead in children's toys. While China has not formally challenged the various proposals at the WTO, the nation's government has threatened to do so, which could have a chilling effect on the health and safety policies being enacted in the first place.

At NCSL, Vermont's Sen. Virginia Lyons (D-Chittenden), the resolution's sponsor, spoke adamantly against the USTR providing the details of pending state legislation to WTO member countries. The WTO requires that the United States provide notice to other WTO countries of laws that could potentially affect international trade. In the recent cases, press accounts reported that USTR provided notice to China of pending legislation that then resulted in the attacks. The resolution asserts that the USTR's enabling of foreign interference in a domestic legislative debate is totally unwarranted.

The resolution was unanimously passed by the Labor and Economic Development Committee, but may be revisited at the fall NCSL meeting by the Communications, Financial Services, and Interstate Commerce Committee. Click here to read the full story on our blog.

Don't Let States Get Left on The Sideline!

Whoever is the next president will inevitably seek some form of trade negotiation authority, given Fast Track has expired. Please take a minute to give us your feedback on ideas that have been put forward by your colleagues for a greatly improved state-federal consultation process on trade, which could be implemented when the debate about replacing Fast Track starts. (Click here for pdf)

This is a critical opportunity for states to define what role they play in making these policies. But, states will only be effective in pushing for reforms if the work is done now to build consensus on demands. The 2007 NCSL Free Trade and Federalism resolution puts forward a very reasonable policy: states must be allowed to decide if state policy space will be bound to meet trade agreement non-trade regulatory constraints. This is your chance to turn this idea into specific demands that can make a difference.

Join the network of state and local officials working to create a winning new trade policy that safeguards state sovereignty and democracy in trade agreements! For more information, please contact Sarah Edelman at (202) 454-5193 or sedelman@citizen.org.

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