Global Trade 2006 No. 378
International trade can and should be beneficial to the populations of the participatory nations at all economic levels. The trade model currently promoted by the U.S. is one designed to ensure profit for corporate investors while exploiting workers and facilitating the movement of jobs to locations where wages are lowest and environmental laws weakest.
Trade agreements being negotiated follow the NAFTA (North American Free Trade Agreement) model, hence have no meaningful enforceable internationally recognized basic labor, human rights and environmental standards in their core agreements. It is ADA’s position that such protections always should be included. Penalties for violations should be at least equal to those applied to infringements against intellectual property rights.
Both NAFTA and CAFTA include provisions giving a corporation the right to sue a foreign country in the event that its local, state and federal regulations impinge on investor profits, real or estimated. Thus, pollution standards or prevailing wage laws may be considered “barriers to trade” and challenged in closed trade tribunals, where judgments in such cases are based only on language of trade agreements; federal, state and local laws of the “offending” country are not taken into account. ADA calls for transparency in such cases and for an end to legal corporate violations of environmental labor standards and the rights of corporations to bring suits if required to abide by laws of foreign countries where they do business.
CAFTA (Central American Free Trade Agreement) sets a dangerous precedent by including services as tradable commodities. More investment facilitation than trade, this new component enables foreign corporate privatization and deregulation of services, such as education, health care, public construction projects, libraries, transportation, waste disposal and delivery of natural resources, such as water and electricity. Privatization of these services will leave citizens without traditional recourse to government when service is inadequate or rates are unreasonable.
Today’s trade agreements have overarching impact in many areas. For example, immigration from Mexico has increased since implementation of NAFTA, partly because of “dumping” of U.S. corn on the Mexican market, putting many small farmers out of work and with few alternatives other than leaving home in search of minimum wage jobs in the U.S.
Global trade offers the opportunity of raising working and living standards, here and abroad. However, this clearly is not the goal of our government. A new trade model is imperative. ADA advocates the establishment of a trade model that would result in agreements being negotiated in the interests of the public good, rather than corporate control and profit.
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Energy, Environment and Economic Policy Commission