Fall, 1997
Fast Track to the Bottom
compiled by Leslie Byster
There are several important and related international trade initiatives currently being negotiated behind closed doors and outside of public scrutiny. The first is fast track legislation (a set of procedures by which Congress approves trade and investment agreements); the second is a series of trade agreements that need fast track to get through Congress quickly and expeditiously. These trade negotiations, which include NAFTA expansion, Multilateral Agreement on Investments (MAI) and the Asia Pacific Economic Cooperation, are part of the new era of globalization which may have disastrous consequences for our communities.
In September, President Clinton introduced his proposal for 'Fast Track' negotiating authority. Under this proposal, the President would be authorized to unilaterally negotiate trade deals according to a list of 'trade negotiating objectives' in a way that excludes congressional participation. Fast Track would require Congress to approve the agreement with a 'yes' or 'no' vote only (no amendments) with a very limited amount of debate (meaning most members of Congress may never read the trade and investment agreements before voting on them).
This Fast Track proposal strengthens business rights while eliminating the possibility for including enforceable labor and environmental protections in future trade and investment agreements (which could last as long as 8 years). Fast track has been used only five times in its entire existence since 1974. (Presidents Nixon, Reagan and Bush each used it once, and this adminstration has used it twice.) Yet the Clinton administration has completed over 200 trade agreements in recent years. So why is Clinton pushing this forward now?
The Administration plans to use this Fast Track authority for several important regional and global trade and investment agreements including: the expansion of the North American Free Trade Agreement (NAFTA) to Latin America and to the Caribbean starting with Chile; greater expansion to Asia through the Asia Pacific Economic Cooperation; the Multilateral Agreement on Investment (MAI); and expansion of the World Trade Organization (which implements the General Agreements on Tariffs and Trade (GATT)).
NAFTA Expansion
Many are concerned that the 'fast-track' expansion of NAFTA will accelerate the pace of environmental destruction, human exploitation, economic and environmental injustice, which has already increased with NAFTA. NAFTA's failures include:
- the loss of an estimated 420,000 jobs and wage stagnation in the US;
- Increased pollution along the US Mexico border,weaker environmental laws, and weak US highway and food safety standards;
- In Mexico, real wages have dropped 27%, and more than 2 million workers in the agricultural and small business sectors have become unemployed.
Multilateral Agreement on Investment
The Organization for Economic Cooperation and Development (OECD), the Paris-based 'think tank' for the 29 richest industrial countries, is secretly negotating an investment treaty that would expand NAFTA on a global scale. The MAI would:
- Allow corporations to sue governments directly if they feel government regulations impede 'free-trade';
- Grant transnational investors the unrestricted 'right' and 'freedom' to buy, sell and move their operations whenever and wherever in the world they want without government intervention or regulation;
- Settle disputes through unelected international panels whose decisions would be non-appealable
- Force national and local governments to treat foreign investors as if they were domestic investors;
- Force countries to open all sectors of their economies to foreign ownership.
MAI will hasten the 'race to the bottom' in environmental and living standards. The MAI, designed to remove all barriers to global trade and investment, would enable the democratically enacted laws and regulations of all levels of government to be overridden. Measures found to be 'trade restraints' or 'investment expropriations', which is defined very broadly, could mean the US might have to pay millions of our tax dollars annually to compensate an 'aggrieved investor' for an alleged 'restraint' or 'expropriation', or the measures would have to be eliminated.
The MAI creates an international corporate bill of rights and contains no corresponding obligations or responsibilities related to local communities, jobs, workers, small businesses, consumers or the environment. In a letter to US officials, the US Council for International Business states, "The MAI is an agreement between governments to protect their international investors and their investments. We will oppose any and all measures aimed to create or even imply obligations for governments or business related to environment or labor" (emphasis added)
Reasons to reject the Fast Track proposal
- President Clinton's Fast Track Proposal is a setback for workers, the environment, human rights and public safety, since the President is prohibited from placing enforceable labor and environmental provisions in the core texts of future trade pacts if they are not "directly related to trade." Under this language, even NAFTA's weak and ineffective side agreements would be prohibited. Furthermore, the President is directed to negotiate for the elimination of existing labor or green rules that may "decrease market opportunities" for US exports in other countries.
- Environmental and labor concerns are relegated to the World Trade Organization. The WTO's environmental working group's ostensible mission is to remove environmental laws that limit trade. In a Ministerial Declaration issued last march, the WTO refused to deal with labor issues and declared that the International Labor Organization, (ILO) is the appropriate forum for such discussions. Yet the ILO lacks the leverage and enforcement mechanisms for effectively dealing with labor disputes.
- Fast track opens the doors for NAFTA expansion starting with Chile and the Multilateral Agreement on Investment (MAI). A "grandfather clause" in fast track legislation, allows the President to fast track NAFTA expansion and apply fast track to other trade negotiations, such as the MAI.
- Fast Track includes nothing on currency stability, illegal drugs or food safety. In fact, negotiating objectives on coordinating monetary and trade policy and on eliminating unfair trade practices are eliminated in this proposal. Given the 1995 Mexico peso crash and the recent currency collapse in Southeast Asia, it is ill-advised to eliminate trade negotiating objectives.
- Fast Track boosts enforcement mechanisms for intellectual property rights. In the same legislation that withdraws the President's ability to negotiate enforceable labor and environmental provisions, protections for intellectual property are expanded through criminal enforcement mechanisms.
To expand NAFTA and clinch the MAI, Clinton needs "fast track" authority from Congress. Derailing fast track alone won't stop the negative effects of globalization, but it would be a good step in the right direction.
(The information is reprinted from materialsby Public Citizen, Food First, and Sustainable Alternatives to the Global Economy. For more info about Fast Track and the MAI call Public Citizen at 202-546-4996 or visit their web site at www.citizen.org/)
While Congressmembers Sam Farr and Pete Stark have voiced opposition to Fast Track, Anna Eshoo, Nancy Pelosi, and Zoe Lofgren have not yet taken a position on Fast Track. Call them at 1-888-723-5246 (ask for them by name) and tell them how you feel about Fast Track, and be sure to thank those who support your position.
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