Reports from the Economic Front

a blog by Marty Hart-Landsberg

Say No To Free Trade Agreements

The president, with the enthusiastic support of our business community, is pushing ratification of free trade agreements with Korea, Colombia, and Panama.  The fact is that these agreements are terrible for working people. 

Those advocating their ratification generally argue that they are simple tariff reduction agreements which promote exports and jobs.  In the case of the Korea agreement, the U.S. trade representative claims that ratification will create 70,000 new jobs for American workers.  The fact is, as argued before, this claim is based on a fradulent methodology that ignores the consequences of the expected growth in imports and trade diversion.  In short, the government is playing fast and loose with the data to manipulate public opinion.  

The government is willing to go to such lengths because these bilateral free trade agreements have become increasingly important to the business sector.  Originally the U.S. and other governments favored multilateral agreements like the WTO.  However, popular resistance has made it almost impossible to expand their reach.  As a result, most governments have settled on a strategy of using bilateral agreements to strengthen corporate power in a step-by-step approach that is less likely generate another “Seattle.”

Two recent WTO rulings based on alleged U.S. violations of the Technical Barriers to Trade agreement (TBT) help to clarify what is at stake.  Among other things, the TBT says:

Members shall ensure that technical regulations are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade.  For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfill a legitimate objective, taking account of the risks non-fulfillment would create.  Such legitimate objectives are, inter alia:  national security requirements;  the prevention of deceptive practices;  protection of human health or safety, animal or plant life or health, or the environment.  In assessing such risks, relevant elements of consideration are, inter alia:  available scientific and technical information, related processing technology or intended end-uses of products.

This may sound pretty harmless but the key is that the TBT requires governments to pursue their policy goals in ways that are least likely to discourage trade.  Even if government regulations apply equally to foreign and domestic firms, if foreign firms can make a case that the regulations disproportionately affect them because of the way they produce, they can use this agreement to force a change in government policy.  That is what happened in the two recent rulings.   

The first WTO ruling declared that the U.S. must stop allowing companies to put labels on cans of tuna to tell their consumers that the tuna was caught using fishing techniques that protect dolphins.  According to the WTO, not only can we not ban tuna caught using nets that also kill dolphins, we cannot even use labels that inform consumers about how the tuna was caught.  The reason: such labels might influence consumer purchases.  The case was filed by Mexico, representing some 15 countries including the European Union.

The second WTO ruling declared that the U.S. must stop using labels on beef sold in supermarkets that reveal the country where it was raised and slaughtered.  Significantly, although this case was brought by cattle interests in Mexico and Canada, the outcome was also endorsed by the largest cattle industry group in the United States.  Class interest usually does trump national interest.  According to a Reuters report, the president of the National Cattlemen’s Beef Association said, “This ruling is unfortunate for the U.S. government but the consequences of a poor decision have been revealed. We fully support WTO’s preliminary ruling.”  The Association supports the ruling because it will allow cattle producers to combine various qualities of meat sourced from different locations thereby cheapening their costs of production without worry about consumer reaction.  

A strengthened TBT is included in each of the three free trade agreements that our government is promoting.  And there are many other destructive chapters in each of these agreements that our government has also conveniently forgotten to tell us about.  No doubt they are afraid that if we really understood what these agreements are about we would realize that they are designed to promote corporate profitability without any regard for the public interest. 

Our response needs to be a clear and loud “no” to the ratification of these and future free trade agreements.


One response to “Say No To Free Trade Agreements

  1. Doris Colmes June 2, 2011 at 7:55 pm

    Have never had much faith in the WTO, and this article is one more indication that we (all of us) watch pretty nonchalantly as yet another species if eliminated towards further success of the corporate entity that controls this country.
    (In this particular context of the article above, I just thank my lucky stars for being a vegetarian!)


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