~ TABLE OF CONTENTS ~
(6-A) - Basic Features ~
(6-A-a) - Multilateral Agreement on Investments (MAI) ~
(6-A-b) - North American Free Trade Agreement (NAFTA) ~
(6-A-c) - World Trade Organization (WTO) ~
(6-A-d) - Asia Pacific Economic Forum (APEC) ~
(6-A-e) - African Growth and Opportunity Act ~
(6-A-f) - Uruguay Round, Global trade Talks ~
(6-A-g) - Global Agreement on Trade and Tariffs (GATT) ~
(6-A-h) - Association of Southeast Asian Nations (ASEAN) ~

(6-B) - Sovereignty Violations ~
(6-B-a) - World Trade Organization (WTO) ~
(6-B-b) - Global Agreement on Tariffs and Trade (GATT) ~
(6-B-c) - North American Free Trade Agreement (NAFTA) ~
(6-B-d) - Multilateral Agreement on Investments (MAI) ~

(6-C) ~ Politics ~
(6-D) ~ Environmental Effects ~

Go to List of References for this Literature Review ~
Go to Table of Contents of this Literature Review ~
Go to "Globalization: The Convergence Issue" ~
Go to Home Page of this Entire Web Site ~

Under the conditions of the Multilateral Agreement on Investments (MAI), contracting parties are bound to the terms of the MAI for a minimum of 20 years. The MAI requires a commitment of 5 years before any member can withdraw. From that point, all then-existing investments are still obliged to the terms of the agreement for 15 additional years. The MAI broadens the GATT/WTO limitations on national sovereignty in favor of one set of global rules enforced by an unaccountable international tribunal (Public Citizen Global Trade Watch (11/97)).

In 2000, the US extended some of the special privileges Mexico enjoyed under Nafta to Caribbean Basin Initiative nations and to some African states (03G1).

Under NAFTA, US investors are denied any right to explore for oil in Mexico or to buy Mexican wells or refineries. Mexico's waters remain off limits to US fishermen. US companies cannot run bus or truck services inside Mexico. US companies cannot sell used cars in Mexico freely for 25 years (Patrick J. Buchanan, "NAFTA Threatens life as we know it", Pittsburgh Post Gazette (8/16/93)).

In the original debate over NAFTA, NAFTA would merge a US labor market where the minimum wage is $4.25/hour with a Mexican labor force whose minimum wage is 58 cents/hour (Patrick J. Buchanan, "NAFTA Threatens life as we know it", Pittsburgh Post Gazette (8/16/93)).

NAFTA's side agreements (to protect environment etc.) set up a bureaucratic maze that will make it all but impossible for redress of grievances, even on those few topics that they cover. Mexico's secretary of Commerce assured Mexican legislators that the "time frame of the process makes it very improbable that the sanctions could ever be reached." (Jeff Faux, Pittsburgh Post Gazette (9/8/93)).

NAFTA provides more incentives for US businesses to train Mexican workers than American workers (Jeff Faux, Pittsburgh Post Gazette (9/8/93)).

China entered the WTO in December of 2001 (04M4).

China entered the WTO in 2001 (02L1).

Three trade experts, who may pursue simultaneous business careers and who would not have to adhere to conflict-of-interest rules, would staff the WTO tribunals. The WTO tribunals would operate in closed-door secrecy, banning the press and prohibiting citizen groups from either participating or even attending. There would be no required disclosure of the contending governments' briefs and other evidence, no public transcripts, and no independent appeal. Only national governments would have standing. Even a state's attorney general or governor would have no right to participate in the defense of state laws before the WTO tribunal. This overlay on the federal system has provoked 42 state attorneys general, 30 state treasurers, the National Association of Counties, and many other state- and local associations to raise serious concerns about the trade deal's effect on state-federal relations (94N1).

The WTO's controlling provision is that any domestic law that affects trade in any way must be the "least trade-restrictive" possible. This gives it supremacy even over existing environmental treaties. Member nations can challenge each other's health and safety laws before trade tribunals in Geneva, charging that these laws are "WTO-illegal" because their effect is to restrict trade. Since the US has numerous laws that are more protective of its citizens than those of other nations, the US will be a frequent defendant. If these unaccountable tribunals decide that our laws, e.g. those limiting the use of exported nuclear materials, advancing food-, air- and water safety, and recycling, protecting dolphins, and requiring labeling, are "non-tariff trade barriers", the US would be obligated to repeal them or pay perpetual fines (94N1).

Many important WTO documents are unavailable to the public, and most WTO committees, as well as dispute-resolution proceedings, are conducted in closed sessions (99H1).

The 18-member Asia Pacific Economic Cooperation forum (APEC) of Pacific Rim nations (including the US) account for 40% of the world's population, 46% of its exports, and 56% of its production (97O1).

In June, 2000, the US Congress passed the Africa Growth and Opportunity Act, which gives 23 sub-Saharan countries the opportunity to ship a range of textile products to the US, duty-free (Helene Cooper, Wall Street Journal (1/2/02)).

The plan to end quotas on trade in textiles and clothing by 2005 was agreed to by 123 nations participating in the Uruguay Round trade talks in 1995 (04M4).

The Uruguay Round of global trade talks (Dec. 1992) produced an agreement 26,000 pages long. It also stipulated the creation of a new World Trade Organization that would encompass the preexisting General Agreement on Tariffs and Trade (GATT) (99H1).

The GATT has four main environmental weaknesses:

It will allow attacks on existing US environmental laws by countries with less rigorous laws that claim the US regulations inhibit imports;

It will discourage the spread of environmental regulations abroad, because countries that enforce tough new regulations might be in violation of the GATT accord;

It will maintain secrecy in trade proceedings, thus hampering efforts by environmental groups to influence the outcome, and

It doesn't spell out in detail, the role environmental concerns will play in future trade talks (Timothy Noah, Wall Street Journal (12/16/93)).

Under AFTA, Singapore, Malaysia, Indonesia, Philippines, Thailand and Brunei are supposed to reduce tariffs to below 5% on a wide range of goods by 1/1/03. Vietnam, Myanmar, Cambodia, and Laos have until 2006-2010 to comply (02W2).

The Asean Free Trade Area (AFTA) is being planned to cover 500 million people (Singapore, Malaysia, Indonesia, Philippines, Thailand, Brunei, Vietnam, Myanmar, Cambodia and Laos) (02W2).

Association of Southeast Asian Nations (Asean) signed an agreement with China in November 2002 to work toward creation of a free-trade area covering 1.8 billion people by 2010 (02W2).

Go to top of this Chapter 6 - Trade Agreements and Section (6-A) - Basic Features
Go to List of References for this Literature Review ~ 
Go to Table of Contents of this Literature Review ~
Go to "Globalization: The Convergence Issue" ~ 
Go to Home Page of this Entire Web Site ~ 

NAFTA rules limit each country's domestic policies to deal with issues ranging from environmental health and food safety to banking and truck safety regulation. Under the unprecedented investor rights sewn into NAFTA, investors are allowed to demand compensation for "indirect expropriation", which has been interpreted to mean any government act -- including those directed at public health and the environment -- that diminishes the value of a foreign investment. Following one NAFTA suit, the Mexican government was ordered in August 2000 to pay nearly 17 million dollars to a California firm that was denied a permit from a Mexican municipality to operate a hazardous waste treatment facility in an environmentally sensitive location (03M3).
Under one US government program for displaced workers, the NAFTA Trade Adjustment System -- for which only a relatively small number of NAFTA's potential victims could qualify -- 525,000 US workers were certified as NAFTA casualties because their jobs were transferred to Mexico (03M3). (Continued below)

NAFTA has also had a detrimental impact on the ability of US workers to fight for better wages and working conditions. US employers now often threaten to move to Mexico and other low-wage countries in order to fight unions and restrain wages. The use of such threats in union organizing drives increased from about 50% in the early 1990s to 62% in 1998 and 68% in 1999 (03M3). (Continued below)

NAFTA has displaced 1.75 million Mexican farmers from their land (during NAFTA's 10-year lifetime), forcing them to migrate to the cities or to the US. (in gci.html) Farm prices -- especially for maize -- have plummeted during NAFTA's 10-year lifetime in the face of subsidized imports from the US (03M3).

"Any country whose political system operated as the WTO did would not only be rightly condemned by the international community as undemocratic and corrupt, but it would also face a real and constant threat of revolution," the authors say. "No developed country would contemplate running its government in this way.  Yet, they exploit the system and defend it against pressure for democratic reform at the international level," they add (Paul Redfern, Nairobi Daily Nation, September 3/03).

9/4/03 The authors compiled interviews with 33 WTO diplomats and 10 organization employees.
A week before the World Trade Organization meeting starts in Cancun, Mexico, a new book released in Europe says that industrialized nations - mostly the US and the EU - use bribery and disseminate fear to convince developing countries to make agreements on international trade, the Nairobi Daily Nation reports (03J1). (Continued below)

The authors say that developing country ministers have been physically barred from participating in negotiations related to their countries and that rich countries have threatened to stop offering aid to those nations if they did not sign the agreements. The book says that six WTO ambassadors from developing countries were actually removed from their posts in Geneva after disagreeing with diplomats from developed countries on the Doha Round of WTO talks, which were held in 2001 (03J1). (Continued below)

The book presents an official document written by US trade representative Robert Zoellick, demanding that developing countries change their positions regarding some negotiations or face inclusion on a US list of "enemy countries" (03J1). (Continued below)

O Estado de Sao Paulo also reports that African diplomats were pressured and intimidated by the US to sign the agreement - passed 8/30/03 - giving approval for poor countries to import generic copies of patented medications. (in gci.html)

The US used the WTO to successfully challenge Europe's ban on beef treated with an artificial growth hormone despite evidence that hormones in the diet may cause cancer. US food safety laws could be attacked next under these same trade rules (97S1).

To avoid conflicts in the WTO, the US Dept. of Agriculture refused to set strong standards to prevent introduction of tree-eating invasive pests. Now the Asian long-horned beetle, a recent arrival, threatens to destroy US sugar maples (97S1).

In 1998, the WTO ruled against a US law that protects endangered sea turtles from drowning in shrimp nets. The State Department later set new rules that weakened sea turtle safeguards (97S1).

The WTO ruled in 1998 against a US law aimed at reducing unintended sea turtle mortality as a byproduct of shrimp trawling (99H1). (The use of "turtle-excluder devices by shrimpers has been required of US shrimpers has been required since 1988. They reduce turtle mortality in shrimp-trawling by 97% or more, according to US government studies (99H1).)

Book (03J1) Says Rich Nations Use Bribery, Fear In WTO Negotiations.

Under the GATT (predecessor of the WTO), a US law to protect dolphins from encirclement and drowning in tuna nets was ruled to be an illegal barrier to trade in 1991. Congress later weakened this law to avoid another clash in the WTO (97S1).

As the GATT agreement stands, it will now be easier for countries to charge that some individual nation's environmental product standard, such as automotive fuel efficiency requirements, recycled paper content stipulations and refillable bottle laws, are unfair restrictions on commerce. Food safety laws such as pesticide residue limitations could also be vulnerable (Hilary F. French, WorldWatch, March/April, 1994).

A GATT dispute resolution of 9/91 ruled than a US embargo against Mexican tuna caught with purse-seine nets violated the GATT agreement (99H1).

Austria was forced to abandon plans to introduce a 70% tax on tropical timber, as well as a requirement that tropical timber be labeled as such, when the Assn. of Southeast Asian Nations (ASEAN) complained that the law violated GATT. (H. F. French, World Watch, 6(5) (1993))

Around 1996, a NAFTA tribunal ordered Mexico to pay $19 million in damages to the US-based Metalclad Corporation after environmental officials in the Mexican state of San Luis Potosi blocked a planned hazardous waste landfill that, state officials say, threatened to pollute the region's water supply (97S1).

Around 1996, a NAFTA investors' tribunal ordered Canada to pay $50 million to S.D. Myers, an Ohio-based toxic waste disposal company, which claims it was denied the right to import hazardous PCBs from Canada for incineration in the US. So doing, the NAFTA tribunal undermines an international treaty that attempts to control toxic pollution by discouraging export of hazardous wastes (97S1).

In 1998 Canada was forced to settle a NAFTA "takings" complaint filed by Virginia-based Ethyl Corporation over Canada's ban on MMT, a gasoline additive that may cause brain damage. As conditions of the settlement, Canada ended its ban on MMT, paid $13 million to Ethyl, and declared publicly that MT is safe, despite the known risks (97S1).

Minnesota legislators found 30 state laws that could be overturned by NAFTA that would have the same authority as the US Constitution. US taxpayers would guarantee a $3-4 billion loan the World Bank plans to give Mexico to help Mexico adjust to NAFTA (Patrick J. Buchanan, "NAFTA? Don't hafta", Pittsburgh Post Gazette (8/23/93)).

On 11/26/01, the Supreme Court refused to revive the challenge to NAFTA put forth by United Steelworkers of America. The claim was that the 1993 trade accord among the US, Canada and Mexico was a treaty, and therefore required a 2/3 vote of the Senate as specified by the US Constitution. (NAFTA was implemented by a simple majority vote of both houses of Congress.) A federal appeals court in Atlanta had ordered the lawsuit dismissed earlier in 2001, concluding that the case presented a "political question" that didn't belong before the courts (Scott Ritter, Wall Street Journal (11/27/01)). Comments: What essential elements of a treaty are lacking in NAFTA that make it less than a treaty? The US Constitution does not spell out what a treaty is, but does this render the Constitution's requirement about a 2/3 vote on treaties absolutely void of any meaning?

Under the "expropriation" language in NAFTA, the US-based Ethyl Corporation is suing Canada for $251 million for banning the company's gasoline additive, MMT, a suspected neurotoxin (Sierra, July/August, 1998).

The MAI would spell an end to boycotts and trade sanctions against countries or businesses violating environmental, labor and human-rights standards (Sierra, July/August, 1998).

The MAI would allow the US to shield certain environmental protections, but only if it agreed not to pass any more such laws in the future, and to phase out existing statutes (Sierra, July/August, 1998).

Laws like those in Oregon and Idaho forbidding the export of raw logs would be threatened by the Multilateral Agreement on Investments (MAI) (Sierra, July/August, 1998).

Go to top of this Chapter 6 ~ Trade Agreements ~
Go to top of this Section (6-B) ~ Sovereignty Violations ~
Go to List of References for this Literature Review ~
Go to Table of Contents of this Literature Review ~
Go to "Globalization: The Convergence Issue" ~
Go to Home Page of this Entire Web Site ~

A PBS DGA poll conducted for Gazeta on 3/8/08 found that:

About 2/3 of Poles wouldn't buy GMO foods, even if they were significantly cheaper than traditional products.

About 60% of Poles believe that eating GMO foods can be harmful to your health.

About 50% of poles would support a ban on the cultivation of GMO plants even if that were to mean higher food prices.

The European Commission filed a lawsuit against Poland in the European Tribunal of Justice for passing a law banning GMO seeds and animal fodder. Poland counter-sued (08N1).

As many as 45% of Poles said it was worth maintaining the GMO ban "even if it meant a conflict with the European Commission. Some 37% thought otherwise (08N1).

In Austria, 25% are in favor of GMO; (29% in France) (19% in Latvia) 12% in Greece) (74% in Spain) (65% in Portugal) (55% in Ireland) (08N1).

Spain and Portugal were not permitted to enter the European Union (EU) until they permitted free, democratic elections, and until they began to raise their labor and environmental standards to levels prevailing in the most advanced European economies (Karen Lissakers, Wall Street Journal, 11/19/92).

China, according to the AFL-CIO, has violated all four trade agreements it has made in the last 10 years. The chairman of the China Insurance Regulatory Commission said that even after China's accession to the World Trade Organization, Beijing reserves the right to block licenses for foreign insurance companies (00K1).

"We will oppose any and all measures to create or even imply binding obligations for governments or business related to environment or labor" Abraham Katz, president of the US Council for International business (Sierra, July/ August, 1998).

Four years after NAFTA was passed (after two side deals were worked out to correct perceived abuses to labor and the environment in Mexico) both supporters and opponents of NAFTA agree that the side agreements have had little impact, mainly because the mechanisms they created have almost no enforcement power. At best, critics say, the NAALC (North American Agreement on Labor Cooperation) did little more than create an apparatus for holding public meetings, which are often ignored by employers since the law itself provides no means to punish abusers. The Commission on Environmental Compliance (CEC) created by NAFTA is similarly weak (Joel Millman, Wall Street Journal (10/15/97)).

Go to top of this Chapter 6 ~ Trade Agreements ~
Go to List of References for this Literature Review ~
Go to Table of Contents of this Literature Review ~
Go to "Globalization: The Convergence Issue" ~
Go to Home Page of this Entire Web Site ~