Brothers and Sisters,
My name is Frank Hotchkiss, my official title is District Staff Organizer for the United Steelworkers. I have been asked by President Hoffert of the Buffalo Council to present a series of pieces regarding the global economy and in particular, Federal trade agreements and how they affect each of use in our daily life. I have been involved in legislative and political work for the United Steelworkers as a Staff Representative and as a rank and file member for many years. As a former employee of Bethlehem Steel Corporation, I have personally experienced the negative effects of bad trade deals and unfair trade.
I would like to start off by saying I am not an expert in this field nor do I pretend to have all the answers regarding trade, globalization or democracy. Also, not all the material you will receive is original thoughts or observations. I do not believe in reinventing the wheel, in other words a lot of this material has been taken from a wide variety of sources, too many for attribution. The intent is to present hopefully a different perspective on Free Trade and Globalization from what you may be familiar with. I strongly urge each of you to question what you read and research the material for yourself.
Additionally, you should be aware of the United Steelworkers position on Free Trade. We consider “Free Trade” to be the root of all evil. Free trade precipitates our race to the bottom economically, socially, culturally and our rapid decent to third world status as we loss our sovereignty and Democracy. We believe there is no such thing as free trade. Someone somewhere is paying the price. Our view is quite simple, trade as practiced today is that the people making the deals don’t have to pay the bill in lost jobs and pensions, lower wages, the loss of health benefits, increased unemployment, higher poverty rates, the dissolution of families, regressive taxes and the thing I find the most despicable of all, the loss of hope. Free trade is robbing the generations which follow of any hope in achieving the American dream.
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I would like to start with a definition of Free Trade. We have all heard the term countless times, but what does it really mean? The traditional view of trade can be described as follows, a reciprocal trade agreement, an international commercial treaty in which two or more nations grant equally advantageous trade concessions to each other. It usually refers to treaties dealing with tariffs or commodities. For example, one nation may grant another a special schedule of tariff concessions in return for equivalent advantages. Originally reciprocity agreements involved bilateral tariff reductions that were not to be extended to third countries.
Please take note of the word Treaty.
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Free trade, in modern usage, is trade or commerce carried on without such restrictions as import duties, export bounties, domestic production subsidies, trade quotas, or import licenses and can be extended to multiple parties. Carried to its ultimate logical conclusion, free trade as a noun has one meaning: International trade free of government interference.
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Besides not really knowing what “free trade” is or what it means to multiple constituencies we are also faced with a language barrier unique to trade. Everyone speaks in acronyms; GATT, WTO, PNTR, USTR, NAFTA, AFTA, DR-CAFTA, GATS, PFTA, FTAA.
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We need to break down this trade speak into real words, so we can attach some understanding of their real meaning.
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GATT - the General Agreement on Tariffs and Trade (GATT) was first signed in 1947. The agreement was designed to provide an international forum that encouraged free trade between member states by regulating and reducing tariffs on traded goods and by providing a common mechanism for resolving trade disputes. GATT membership now includes more than 110 countries.
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WTO -The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business. World Trade Organization (1995)
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NAFTA - NAFTA called for immediately eliminating duties on half of all U.S. goods shipped to Mexico and gradually phasing out other tariffs over a period of about 14 years. Restrictions were to be removed from many categories, including motor vehicles and automotive parts, computers, textiles, and agriculture. The treaty also protected intellectural property rights (patents, copyrights, and trademarks) and outlined the removal of restrictions on investment among the three countries.North American Free Trade Agreement (1994)
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DR-CAFTA - Dominican Republic-Central American Free Trade Agreement (2005) promotes trade liberalization between the United States and five Central American countries: Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. Modeled after the ten-year old North American Free Trade Agreement (NAFTA), CAFTA is widely considered to be a stepping stone to the larger Free Trade Area of the Americas (FTAA) that would encompass 34 economies.
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GATS - General Agreement on Trade and Services (2000) GATS is the first and only set of multilateral rules and commitments covering Government measures which affect trade in services. It has two parts—the framework agreement containing the rules, and the national schedules of commitments in which each Member specifies the degree of access it is prepared to guarantee for Foreign Service suppliers.
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USTR - United States Trade Representative. The Office of the United States Trade Representative (USTR) is an agency of over 200 people, a highly committed group of professionals who have decades of specialized experience in trade issues and regions of the world. They negotiate directly with foreign governments to create trade agreements, resolve disputes and participate in global trade policy organizations. They also meet with governments, business groups, legislators and public interest groups to gather input on trade issues and explain the president’s trade policy positions. The agency was founded in 1962 and has offices in Geneva and Brussels.
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AFTA - Andean Free Trade Agreement-still being written In May, 2004 the U.S. launched negotiations for an Andean Free Trade Agreement with Colombia, Peru, and Ecuador. Bolivia might join the negotiations at a later date
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PFTA - Panamanian Free Trade Agreement-still being written. The United States and Panama began free trade negotiations on April 26, 2004. In 2003, bilateral trade between the United States and Panama totaled $2.1 billion, with U.S. exports accounting for $1.8 billion of that amount. Between 2002 and 2003, U.S. exports to Panama grew over 30%. Nearly half of Panama's total imports come from the United States. U.S. foreign direct investment in Panama totals roughly $25 billion. The NAM supports the Panama FTA as part of the broader effort to create a Free Trade Area of the Americas. The Panama FTA will likely come before Congress in 2006.
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_FTA - Insert the name of any country to create another Free Trade Agreement.
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FTAA - Free Trade Area of the Americas. The Free Trade Area of the Americas (FTAA) is the formal name given to an expansion of the North American Free Trade Agreement (NAFTA) to every country in Central America, South America and the Caribbean, except Cuba. Negotiations began right after the completion of NAFTA in 1994 and are to be completed by the end of 2004, to be implemented in 2005.
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FAST TRACK AUTHORITY - Fast track is the traditional trade negotiating authority granted by Congress that allows the President to negotiate international trade agreements. Under fast track procedures, the President submits the legislation to Congress for approval or rejection. No amendments are allowed. Congress has ninety legislative days to approve or reject. While congressional and private sector leaders are consulted throughout the negotiations, the final agreement presented as a package assures our trading partners that any solutions they strike with U.S. trade negotiators will not be renegotiated by Congress.
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There is a recurring term in the language of trade, the word is Agreement.
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I said free trade has one meaning: International trade free of government interference. Recently the Taiwan based Taipei Times reported in a talk entitled, “State Sovereignty Must Be Altered in a Globalized Era”
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Richard Hass stated “the time has come to rethink the notion of national sovereignty. “new mechanism for regional and global governance that include actors other than states. States must be prepared to cede some sovereignty to world bodies if the international system is to function” This is already taking place in the trade realm. The new mechanisms, Mr. Hass referred to include transnational corporations and non-governmental organizations (NGO’s) such as the World Bank and the International Monetary Fund. (IMF)
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Mr. Hass continued to identify one of the principles of national sovereignty that must be ceded: "the ability to control what crosses borders in either direction." This doesn’t sound bad from a free trade perspective. However we need to think about this further. If this one principle of sovereignty is ceded, we will no longer be able to call ourselves an autonomous country: we will have to bow to trade-community rules in terms of drug laws (both those that are currently legal as well as illegal), abandon national security efforts and allow others to determine our citizenship requirements because we won't be able to control immigration, give up rules that are intended to keep our foods and beverages safe, and forgo traffic and highway safety because we will not be able to control who is allowed to drive here or the safety of the vehicles they are driving. And this is just a partial list of negatives that will accrue by ceding just one little part of our sovereignty. On the face of it any rational person would ask, who would agree to such an action. Unfortunately, we are doing exactly that by being locked into “Free Trade” agreements over which we, as citizens, have no control.
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Historical Background.
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Near the end of World War II, approximately 700 world leaders met in New Hampshire to map a strategy for global economic stability. The result of the meeting was the formation of the General Agreement on Trade and Tariffs, the World Bank and the International Monetary Fund. Over the ensuing years, the World Bank and the IMF would bail out insolvent governments with massive loans, usually used pay off interest on other loans to first world banks. These new loans, however, would only come if the debtor nations agreed to "structural readjustment policies" dictated by the lending organizations. These policies usually mandated countries shore-up their currencies by cutting government costs in the form of education, health care and other social programs while lowering taxes and creating more business friendly economic environments.
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Proponents of these policies point to stable currencies as evidence of success while opponents point to hunger, illiteracy, disease and ensuing political instability as the true costs of structural readjustment. In effect we are talking about Socialism for the upper levels of society and free market capitalism for the rest of society.
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One of the prime examples of this type of reform is what occurred in Mexico in 1994. Previous to NAFTA, investors had poured money into Mexico in anticipation of raising prices for Mexican securities and other assets. However, after NAFTA was consummated, investor began pulling their profits out of Mexico, forcing a devaluation of the peso. To try and stabilize the currency, the Mexican government, issued special bonds called “tsebonos “ that would pay the holders in dollars. Mexican dollar reserves dropped, and the foreign debt rose to over $30 billion dollars. The U.S. Treasury put up $20 billion and the IMF put up the rest, not to rejuvenate the Mexican economy, but to ensure that the foreign investors in “tsebonos” did not lose any money. The Mexican people where left paying off the enormous dept that devastated their economy.
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The World Trade Organization (WTO), the new "governing" structure [of GATT], was crafted at the end of the Uruguay Round of negotiations [in the Fall of 1994] to organize and enforce this new system of limits on every nation's laws and policies.
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Nationalists and other critics around the world complained that the WTO undermines national sovereignty, earning the title “protectionist”. President Clinton and the American corporate backers of the WTO rebutted, arguing that if a WTO ruling was ever disputed . by the United States, the US could simply back out of the organization, thus destroying it. Hence, the WTO emerged, like the IMF and the World Bank, as a US dominated organization. I’m using the term US loosely here, however, as US citizens don’t have the opportunity to elect representatives to this new global government, no one does.
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Once the WTO was formed, there began a steady march to ever expanding trade agreements. Allow me to enlighten you as to the legal commitments of New YorkState to Federal trade agreements. The WTO, US-Singapore FTA, US-Chile FTA, US-Australian FTA, US-Morocco FTA, DR-CAFTA, Andean FTA, US-Panama FTA, remember, the last two are still being written but NY State and all of us are signatory parties to all these agreements. This means we are subject to economic sanctions if NY State violates any of the terms or conditions of these agreements.
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How you may be wondering did NY State become a signatory party to these trade agreements. It was very simple; the USTR wrote a letter to the Governor of the state asking if we would like to be included in the agreements. How fortunate for us the Governor of NY has never seen a trade deal he didn’t like, even the ones not written when he agreed to commit the state.
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By the Governors actions, New York’s ability to write laws to express the wishes and protect the tax payers of the state is severely restricted by the "RULES" of the WTO. WTO rules and restrictions are now enforceable as regards all existing federal, state, and local laws, and future laws too. WTO Member countries are now required, when promulgating new federal, state, or local laws, to take into account whether or not the new law will conform with WTO rules. Thus the WTO has a chilling effect on policies that are now being written and rewritten with the fear of a future WTO challenge in mind.
Earlier, I singled out the words Agreement and Treaty. We need to examine exactly what these words mean in relation to current Federal trade policies.
An agreement is defined as:
- Formal contract or arrangement either written or verbal and sometimes enforceable bylaw.
- Act or state of agreeing- the reaching or sharing of the same opinion that somebody or others hold.
- Consensus of opinion- a situation which everyone accepts the same terms or has the same opinion.
A few other words or synonyms for agreement are: Accord, Concord, Conformity, Harmony, Unity, Concurrence, Contract, Arrangement, Covenant, Treaty, Promise, Pact, Settlement, Understanding, and Deal.
Of all those words, there is one that stands out. It is Treaty.
A few other words for treaty are: Agreement, Accord, Contract, Pact, Truce, and Settlement.
The dictionary defines treaty as:
- Agreement between states, in political terms, a formal contract or agreement negotiated between countries or other political entities.
- Pact-an agreement or contract between two or more parties.
Why concern ourselves over the meaning of agreements and treaties if they are in reality the same thing?
Under Article2, Section: 2 of the US Constitution it states in reference to Presidential powers ; …He shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States,…
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We need to ask ourselves that if the Constitution is followed in the appointment of judges, ambassadors and all Officers of the United States, then why is the Constitution not followed when it comes to Treaties. These “agreements” are considered to be treaties under International Law.
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I believe this is sufficient for the first installment, and I reiterate, doubt and question what I have presented research the material for yourself.
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