=======================Electronic Edition========================
RACHEL’S HAZARDOUS WASTE NEWS #303
—September 16, 1992—
News and resources for environmental justice.
——
Environmental Research Foundation
P.O. Box 5036, Annapolis, MD 21403
Fax (410) 263-8944; Internet: erf@igc.apc.org
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FREE TRADE–PART 1:
IS PRICE THE ONLY MEASURE OF VALUE?
The world is being remade before our very eyes, though most of us
cannot see it happening. It is being done in the name of “free
trade” and it is being done behind closed doors. Even the minutes
of the meetings are not being made public as U.S. negotiators
hammer out “free trade” agreements with other countries, which
will have the effect of curtailing–in some cases completely
nullifying–environmental protections, and protections of
workers’ rights, that took 50 years to win.
Free trade is coming upon us like a locomotive. The U.S. and
Canada signed a free trade agreement in 1989. The North American
Free Trade Agreement (NAFTA) between Canada, the U.S. and Mexico
is before Congress now, facing a “yes or no” vote later this
fall. The granddaddy of free trade agreements is the GATT [the
General Agreement on Tariffs and Trade], which came into
existence in 1948. The GATT has been signed by 102 countries
including the U.S., and another 30 countries abide by its rules
though they are not formally “contracting parties.” GATT sets
rules governing the kinds of trade restrictions that are allowed
between GATT participants. The explicit aim of GATT is to
eliminate all trade restrictions.
The latest round of GATT talks have been going on for six years
now, seeking to abolish all trade restrictions between GATT
countries. Because this round of GATT negotiations began in 1986
in Uruguay, people call this the “Uruguay round” of GATT talks,
though the talks have long since moved to Geneva, Switzerland.
In principle, free trade sounds good. Free trade means the
unrestricted exchange of commerce between buyers and sellers
across international boundaries. Another term for free trade is
LAISSEZ FAIRE (a French phrase meaning roughly, “let [people] do
or make [whatever they want to]”). It means, basically, keep
government interference to a minimum in all matters of trade.
Free trade means no trade barriers. Trade barriers are such
things as TARIFFS and QUOTAS and SUBSIDIES.
TARIFFS are taxes on imports, aimed at protecting domestic
producers. If U.S. cotton growers are being hurt by imports of
cheaper cotton from Guatemala, a tariff on Guatemalan cotton
raises the price of imported cotton and gives U.S. cotton
producers an edge in the U.S. market. But in terms of price, the
loser is the U.S. consumer who pays an artificially inflated
price for cotton. In principle, free trade promises cheaper
t-shirts for everybody.
QUOTAS are artificial restrictions on the quantity of goods one
country can sell to another. For example, if GM persuades
Congress that Japanese cars are hurting the Detroit economy,
Congress might establish an IMPORT QUOTA on Japanese cars, to
allow only so many in. One result: the consumer pays an inflated
price or has fewer kinds of cars to choose from.
Another kind of trade restriction is the EXPORT QUOTA. For
example, Congress might restrict the export of American high
technology products, such as computer chips or software, to keep
them from our competitors.
Another kind of trade barrier is the SUBSIDY. If the U.S.
government employs taxpayer dollars to invent a new strain of
wheat that grows fast in dry regions, wheat farmers in dry parts
of Nebraska are better-equipped to compete against Canadian wheat
farmers.
Free trade advocates envision an end to all trade restrictions,
aiming to give the lowest prices to consumers everywhere and the
highest profits to producers everywhere. And if price and profit
were the only measures of value, free trade would create heaven
on Earth.
But trade barriers are not always about price. For example, the
U.S. Marine Mammal Protection Act, a federal law, bans the import
of tuna into the U.S. from countries, like Mexico, whose fishing
nets kill more dolphins than U.S. standards allow. Tuna and
dolphins swim together, and tuna nets catch and kill dolphins
needlessly, so U.S. law aims to protect dolphins by outlawing the
import of tuna not caught by “dolphin-safe” techniques. This is
an example of an IMPORT RESTRICTION established not for price but
to protect a valued species of mammal, the dolphin.
EXPORT RESTRICTIONS are also used to achieve social goals having
nothing to do with price. For example, one U.S. law restricts the
export of hazardous wastes on the theory that we’re all better
off if hazardous waste isn’t spread about the planet willy nilly.
Import and export QUOTAS are sometimes used to preserve resources
and to protect endangered species. For example, the U.S. has
sometimes placed import quotas on Japanese and Icelandic fish
products, to put an economic squeeze on these two countries, to
pressure them to stop killing endangered whales.
SUBSIDIES are used often to protect the environment. For example,
the U.S. government may pay farmers to set aside some land, to
allow the land to rest and become revitalized–a method of soil
conservation. The Canadian province of British Columbia
subsidizes its logging industry, using tax dollars to replant
trees in forests after logging because forests provide many
benefits to the land, to rivers, and to humans.
Free trade advocates want GATT and NAFTA to abolish all trade
restrictions–even those that serve social goals like preserving
species, maintaining forests, and stopping the spread of toxic
waste.
On August 16, 1991, a GATT panel concluded that U.S. import
restrictions on “dolphin-unsafe” tuna from Mexico constituted an
illegal restriction on trade. THE GATT PANEL RULED THAT IT IS
ILLEGAL FOR MEMBER COUNTRIES TO MAKE DISTINCTIONS BETWEEN
PRODUCTS BASED ON THE MANNER IN WHICH THEY ARE PRODUCED.
On February 7, 1992, another GATT panel concluded that liquor
laws in 38 states of the U.S. constituted a subsidy to the U.S.
liquor industry and illegally discriminated against Canadian
liquor producers. The panel further concluded:
…THAT BOTH PARTIES [THE U.S. AND CANADA] AGREED THAT UNDER
UNITED STATES CONSTITUTIONAL LAW, GATT LAW IS PART OF THE UNITED
STATES FEDERAL LAW AND, BASED ON THE COMMERCE CLAUSE OF THE
CONSTITUTION, OVERRIDES, AS A GENERAL MATTER, INCONSISTENT STATE
LAW.
Even if this radical interpretation is not upheld, it indicates
that, at a minimum, free trade will require federal governments
to pass laws curbing the powers of state and local governments.
Since 1989, Canada and the U.S. have been joined in a Free Trade
Agreement (FTA). Some recent events indicate the direction things
are taking:
U.S. logging companies recently sued to stop the provincial
government of British Columbia from subsidizing the replanting of
forests in Canada, claiming it was an unfair subsidy of Canadian
loggers. The government of British Columbia conceded and stopped
paying for the replanting.
The Canadian timber industry is urging Canada’s federal
government to challenge a U.S. law requiring the use of recycled
fiber in newsprint because the Canadian logging industry says
such laws are “disguised non-tariff barriers to trade because
Canada does not have the supply needed of recycled fiber to
maintain market share in the United States.”
When the U.S. Environmental Protection Agency in July 1989
announced its intention to phase out production, import, and use
of asbestos over a seven-year period, the Canadian government
challenged EPA’s regulations in a U.S. court, claiming EPA had
violated GATT and the Canada-U.S. free trade agreement. In its
legal brief, the Canadian government challenged U.S. health and
safety regulations on asbestos, saying there is no international
scientific consensus to support them.
The U.S. non-ferrous metals industry has challenged Canadian
pollution control programs aimed at reducing emissions from, and
improving workplace safety in, several lead, zinc, and copper
mines. The Canadian government says its goal is to protect
workers and reduce acid rain, but U.S. industries say the effect
is to give an unfair competitive advantage to Canadian smelters.
If the U.S. wins the challenge, the Canadian government may do
what the British Columbia government did when challenged over its
tree planting pro-gram: abandon environmental values to avoid
economic retaliation by the U.S.
From the Canada-U.S. free trade agreement alone, the trend is
clear: laws intended to promote recycling, environmental health,
sustainable use of fisheries, reforestation, and acid rain
reduction are being challenged as “non-tariff barriers” and are
in danger of being wiped off the books in both Canada and the U.S.
But it gets worse.
Both GATT and NAFTA will require all participating countries to
adopt international standards for risk assessment. Furthermore,
risk assessments will be required to include cost-benefit
analyses. Merely protecting human health or other values will
not be sufficient justification to establish the validity of a
regulation. One will need to show that the economic advantages
outweigh the economic disadvantages of a regulation. This
principle is already embodied in U.S. pesticide law, widely
criticized as among the weakest of U.S. environmental regulations.
The public has no direct way to affect free trade negotiations or
disputes. Negotiations take place behind closed doors. Meetings
are not announced. No written record of negotiations is released.
Even the decisions of GATT panels, which are convened to settle
disputes, are secret. However, representatives of multinational
corporations are routinely invited to serve as advisors.
Companies like Dow Chemical, Scott Paper, Weyerhauser, Amoco,
Mobil, and General Motors, are invited to help decide the U.S.
position. Is this the future of our democracy?
A recent must-read report from the Environmental Grantmakers
Association says,
CURRENT NEGOTIATIONS HAVE BECOME A TITANIC STRUGGLE BETWEEN FREE
TRADE AND ENVIRONMENTAL PRESERVATION. IN FACT, TRADE NEGOTIATIONS
IN GENERAL ARE BECOMING A KEY FORUM FOR SHAPING ENVIRONMENTAL
POLICY.
This is an understatement. Many hard-won victories of the last 50
years are in danger of being scuttled by free trade fever.
Grass-roots activists need to start paying attention. [More on
this next week.]
GET: Thomas A. Wathen, A GUIDE TO TRADE AND THE ENVIRONMENT (New
York: Environmental Grantmakers Association and the Consultative
Group on Biological Diversity, July, 1992). Available from:
Environmental Grantmakers Association, 1290 Avenue of the
Americas, Suite 3450, New York, NY 10104; phone (212) 373-4260.
97 pages. $7.50 for one copy; $5.00 each for three or more
copies. A lucid introduction to a dense and arcane topic. Highly
recommended.
–Peter Montague, Ph.D.
Descriptor terms: free trade; gatt; tariffs; quotas; subsidies;
marine mammal protection act; nafta; epa;