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Public Citizen's Pocket Trade Lawyer: The Alphabet Soup of Globalization

December 1, 2005

Globalization is a defining phenomenon of our time. The current model, corporate economic globalization, is a version of globalization which is being implemented by a new array of international commercial agreements. While these pacts are called "trade" agreements, today's international commercial agreements no longer focus solely on traditional trade matters, such as reducing tariffs and quotas. Instead, the main mechanisms of globalization, such as the World Trade Organization (WTO) and the North American Free Trade Agreement (NAFTA), contain a comprehensive set of one-size-fits-all policies to which signatory countries are required to conform their domestic laws and regulations. These pacts prioritize commerce over other goals and values, in part by setting constraints on what environmental, food or product safety, social justice and other policies our national, state and local governments may implement. Yet, while institutions and agreements like the WTO, NAFTA and a whole alphabet soup of other globalization mechanisms and institutions have deep and direct impacts on many facets of the daily lives of people everywhere, the meaning and implications of their terms are often unintelligible. First, the agreements are written in a technical trade jargon which we have dubbed "GATTese." In GATTese, words with a clear meaning in common usage have entirely different meanings or implications. In some cases, one or two words are shorthand for entire twenty-year bodies of trade law jurisprudence that simply are not evident on the face of the term. Second, words used in trade and investment agreements have extremely precise legal meanings which can turn on the slight difference in a verb's tense. Since the text of these agreements are often only available in English (or perhaps also French), non-native speakers are put at a disadvantage from the start. Third, there are certain basics of legal interpretation that most non-lawyers simply do not know which can mask completely the meaning of trade agreement language. The actual provisions of some of the key mechanisms of globalization -- such as the WTO and NAFTA -- are so drastic that simply being able to understand what they mean for our environmental, food safety, social justice and other laws and policies is one of critics' strongest arguments. Meanwhile, innocent errors in interpretation made by critics are often used by proponents of corporate-managed trade to undermine the credibility of legitimate criticisms. This guide is intended to help people go to the legal sources with an understanding of some of the most essential specialized terms, language and legal quirks of globalization's instruments. Its goal is to empower the maximum number of people to be able to make their own informed decisions about the often intentionally murky provisions hidden in policies and agreements promoting corporate globalization.

Big Box Backlash: The Stealth Campaign at the World Trade Organization to Preempt Local Control Over Land Use

December 1, 2005

As communities across the United States and elsewhere are increasingly successful in their effort to limit "big box" store expansion and destructive retail practices through transparent and accountable measures at the local level, Wal-Mart and other retailers have pursued rules at the World Trade Organization (WTO) which threaten to preempt, or at the very least chill, these local laws. These rules are part of the General Agreement on Trade in Services (GATS). In 1994, the United States committed retail and wholesale distribution, as well as the hotel and restaurant sectors, to the terms of the GATS, one of 17 Uruguay Round agreements enforced by the Geneva-based World Trade Organization (WTO). The GATS expansive "market access" rules are geared toward facilitating the entry of foreign service providers into the U.S. market by incorporation or acquisition of U.S. firms. These GATS rules forbid limits on the number of services suppliers, as well as measures that would reduce the value of a service transaction or limit the number of employees. Policies containing economic needs tests, like that in the city of Los Angeles for very large retail operations, are explicitly forbidden. Unless the United States takes action to fix this problem in the current round of negotiations, local governments could see challenges to state and local land use laws brought before WTO tribunals, which are empowered to authorize trade sanctions against countries that refuse to conform their domestic policies to WTO dictates. Across the country, state and local officials are working to put laws in place to protect their communities, their environment, their wage base and tax dollars by putting land use limits on "big box" retailers, as well as retail chains and other development projects they deem destructive to the community or the environment or out of step with local needs and planning.

Trade Wars - Revenge of the Myth: Deals for Trade Votes Gone Bad

June 1, 2005

As the Bush administration steps up efforts to obtain congressional approval for a the Central America Free Trade Agreement (CAFTA) NAFTA expansion, Public Citizen released a new report documenting the fate of promises made to members of Congress since 1992 in exchange for their support of controversial trade agreements. The report, "Trade Wars -- Revenge of the Myth: When Trade Vote Deals Go Bad" reveals that of the more than 90 promises made to win trade votes since NAFTA, just 16 were kept.

NAFTA Chapter 11 Investor-State Cases: Lessons for the Central America Free Trade Agreement

February 1, 2005

This report describes how Canadian cattle producers are using NAFTA to demand $300 million in compensation from U.S. taxpayer funds, claiming that the Canadian cattle import ban instituted after mad cow disease was found in Canada violates their NAFTA rights. In addition, a Canadian tobacco company is using the private NAFTA tribunals to attack the U.S.tobacco settlements. These claims are among the 42 cases filed thus far by corporate interests and investors under NAFTA's "Chapter 11" investor provisions, which grant foreign interests more expansive legal rights and privileges than those enjoyed by U.S. citizens or corporations. With only 11 of the 42 cases finalized, some $35 million in taxpayer funds have been granted to five corporations that have succeeded with their claims. An additional $28 billion has been claimed from investors in all three NAFTA nations. The U.S. government's legal costs for the defense of just one recent case topped $3 million. Seven cases against the United States are currently in active arbitration. The report documents how "fixes" to the NAFTA investor protection model required by Congress in the 2002 "Fast Track" legislation were not included in the proposed CAFTA. CAFTA's investment provisions include several cosmetic, ineffective tweaks to the NAFTA investor protection language, but otherwise expand the system of new privileges and private enforcement to investors in six additional nations. These rights include the ability to demand compensation when public health and environmental policies -- even when applied equally to domestic and foreign firms -- might undermine a foreign firm's profitability. On this ground and others, CAFTA fails to meet Congress' most significant Fast Track requirement regarding investment rules in future pacts by granting foreign firms greater rights when operating within the United States than U.S. firms or residents enjoy under constitutional property rights interpreted by the U.S. Supreme Court. CAFTA was signed in 2004 but has not yet been brought up for congressional consideration; support for the deal is limited, in part because of its investment provisions. The United States has not yet lost a case, thanks to an array of lucky technical breaks -- such as an investor relocating into the United States and thus losing foreign investor standing under NAFTA. However, with the overall win-loss ratio of NAFTA investor-state cases running around 50-50, it is just a matter of time before a NAFTA claimant is successful against the United States.

Another America is Possible: The Impact of NAFTA on the U.S. Latino Community and Lessons for Future Trade Agreements

August 1, 2004

A joint report by Labor Council for Latin American Advancement and Public Citizen's Global Trade Watch. The Labor Council for Latin American Advancement (LCLAA) and Public Citizen celebrate the promise of increased interaction and cross-border cooperation among different nationalities on pressing global concerns. This is why we are concerned about the current model of corporate globalization being fostered by "free trade" agreements such as the North American Free Trade Agreement (NAFTA). Negotiated behind closed doors by unelected and largely unaccountable bureaucrats who represent mainly business interests, these trade agreements invariably fail to promote equitable regional integration and cooperation. Instead, this model of corporate globalization explicitly benefits large multinational corporations at the expense of workers, farmers, immigrants, women, people of color, the environment and democratic governance. As the fastest-growing sector of the U.S. population, Latinos are and will continue to be among the groups most affected by this model of corporate globalization. Whether newcomers from El Salvador or fifth-generation Mexican-Americans, U.S. Latinos are seeing adverse effects on their job security, health and environment. Many are immigrants who left their homelands due to the economic and social devastation caused by the current globalization model. In both the United States and in their countries of origin, Latinos have seen their environment and their livelihoods harmed by the status quo globalization package of free trade, investment and finance liberalization, new protections for foreign investors and intellectual property, and new powers that enable multinational corporations to attack state, local and federal public interest laws. In this report, we examine the impact of NAFTA on Latino communities throughout the United States. Implemented in 1994, NAFTA is the most fully realized version of the corporate globalization model. It is currently being used as the blueprint for other trade and investment agreements that the Bush Administration is pushing in the hemisphere, such as the Central American Free Trade Agreement (CAFTA), the Free Trade Area of the Americas (FTAA) and an array of bilateral free trade agreements with the Andean countries (Bolivia, Colombia, Ecuador and Peru) and Panama. Although we support trade, we feel that NAFTA is not the model to follow and should not be copied in these agreements.

The Ten Year Track Record of the North American Free Trade Agreement: The Mexican Economy, Agriculture and Environment

December 1, 2003

This fact sheet is part of Public Citizen's "NAFTA at Ten Series" and documents the results of the failed NAFTA model. Before NAFTA, trade agreements dealt with traditional matters such as cutting tariffs and lifting quotas that had set the terms of trade in goods between countries. NAFTA shattered the boundaries of trade agreements; its central focus and most powerful rules concerned investment, and it contained 900 pages of one-size-fits-all "non-trade" rules with significant implications for food safety, drug patents and access to medicines, not to mention jobs, wages and economic security. It also constrained the ability of local government to zone against sprawl or toxic industries. NAFTA was a radical experiment -- never before had a merger of three nations with such different levels of development been attempted. When NAFTA was being debated, proponents and opponents alike predicted its consequences. Now the data are in. What are NAFTA's lessons in Canada, the United States and Mexico? The Free Trade Area of the Americas (FTAA) and Central American Free Trade Agreement (CAFTA) are both proposals to expand NAFTA, but NAFTA's record is playing a significant role in both the hesitance of some FTAA target countries to adopt the NAFTA model and the concerns of U.S. lawmakers to approve CAFTA.

The Ten Year Track Record of NAFTA: U.S., Mexican and Canadian Farmers and Agriculture

December 1, 2003

This fact sheet is part of Public Citizen's "NAFTA at Ten Series" and documents the results of the failed NAFTA model. Before NAFTA, trade agreements dealt with traditional matters such as cutting tariffs and lifting quotas that had set the terms of trade in goods between countries. NAFTA shattered the boundaries of trade agreements; its central focus and most powerful rules concerned investment, and it contained 900 pages of one-size-fits-all "non-trade" rules with significant implications for food safety, drug patents and access to medicines, not to mention jobs, wages and economic security. It also constrained the ability of local government to zone against sprawl or toxic industries. NAFTA was a radical experiment -- never before had a merger of three nations with such different levels of development been attempted. When NAFTA was being debated, proponents and opponents alike predicted its consequences. Now the data are in. What are NAFTA's lessons in Canada, the United States and Mexico? The Free Trade Area of the Americas (FTAA) and Central American Free Trade Agreement (CAFTA) are both proposals to expand NAFTA, but NAFTA's record is playing a significant role in both the hesitance of some FTAA target countries to adopt the NAFTA model and the concerns of U.S. lawmakers to approve CAFTA.

The Ten Year Track Record of NAFTA: Undermining Sovereignty and Democracy

December 1, 2003

This fact sheet is part of Public Citizen's "NAFTA at Ten Series" and documents the results of the failed NAFTA model. Before NAFTA, trade agreements dealt with traditional matters such as cutting tariffs and lifting quotas that had set the terms of trade in goods between countries. NAFTA shattered the boundaries of trade agreements; its central focus and most powerful rules concerned investment, and it contained 900 pages of one-size-fits-all "non-trade" rules with significant implications for food safety, drug patents and access to medicines, not to mention jobs, wages and economic security. It also constrained the ability of local government to zone against sprawl or toxic industries. NAFTA was a radical experiment -- never before had a merger of three nations with such different levels of development been attempted. When NAFTA was being debated, proponents and opponents alike predicted its consequences. Now the data are in. What are NAFTA's lessons in Canada, the United States and Mexico? The Free Trade Area of the Americas (FTAA) and Central American Free Trade Agreement (CAFTA) are both proposals to expand NAFTA, but NAFTA's record is playing a significant role in both the hesitance of some FTAA target countries to adopt the NAFTA model and the concerns of U.S. lawmakers to approve CAFTA.

Ten Year Track Record of NAFTA: U.S. Workers' Jobs, Wages, and Economic Security

November 1, 2003

This fact sheet is part of Public Citizen's "NAFTA at Ten Series" and documents the results of the failed NAFTA model. Before NAFTA, trade agreements dealt with traditional matters such as cutting tariffs and lifting quotas that had set the terms of trade in goods between countries. NAFTA shattered the boundaries of trade agreements; its central focus and most powerful rules concerned investment, and it contained 900 pages of one-size-fits-all "non-trade" rules with significant implications for food safety, drug patents and access to medicines, not to mention jobs, wages and economic security. It also constrained the ability of local government to zone against sprawl or toxic industries. NAFTA was a radical experiment -- never before had a merger of three nations with such different levels of development been attempted. When NAFTA was being debated, proponents and opponents alike predicted its consequences. Now the data are in. What are NAFTA's lessons in Canada, the United States and Mexico? The Free Trade Area of the Americas (FTAA) and Central American Free Trade Agreement (CAFTA) are both proposals to expand NAFTA, but NAFTA's record is playing a significant role in both the hesitance of some FTAA target countries to adopt the NAFTA model and the concerns of U.S. lawmakers to approve CAFTA.

The WTO Comes to Dinner: U.S. Implementation of Trade Rules Bypasses Food Safety Requirements

July 1, 2003

A Special Report By Public Citizen's Global Trade Watch and Critical Mass Energy and Environment Program. A review of U.S. government "system" audits of five nations (Brazil, Mexico, Argentina, Australia and Canada) reveals that the U.S. Department of Agriculture (USDA)'s Food Safety and Inspection Service (FSIS) deemed "equivalent" systems with sanitary measures that differ from FSIS policy, and in some cases, violate the express language of U.S. laws and regulations. Because FSIS has refused to respond to Public Citizen Freedom of Information Act requests for correspondence and other documentation regarding these equivalency decisions, it is impossible to determine what is the current status of these issues and whether they have been resolved by regulators. - The U.S. law requiring meat to be inspected by independent government officials was violated by Brazil and Mexico and they retained their eligibility to export to the United States. - The USDA's zero tolerance policy for contamination by feces was repeatedly violated by Australia, Canada and Mexico. - U.S. regulations requiring monthly supervisory reviews of plants eligible to export be conducted on behalf of USDA by foreign government officials were violated by Argentina, Brazil, Canada and Mexico, several of whom are seeking to avoid this core requirement of U.S. regulation. Monthly reviews are vitally important to remind the meat industry that the meat inspector who works the line in the plant is backed by the weight of the government and to double-check the work of meat inspectors on a regular basis. - Even though U.S. regulations requiring that a government official -- not a company employee -- sample meat for salmonella microbial contamination, the USDA approved company employees performing this task as part of an equivalency determination with Brazil and Canada. - Even though U.S. regulations require certain microbial testing to be performed at government labs, the U.S. approved testing by private labs as part of the equivalency determination with Brazil, Canada and Mexico. - Unapproved and/or improper testing procedures and sanitation violations have been re-identified by FSIS year after year for Australia, Brazil, Canada and Mexico, but the countries have retained their eligibility to export to the United States. - After its regulatory systems was designated "equivalent," Mexico began using alternative procedures for salmonella and E. coli that had never been evaluated by FSIS, yet the country retained its eligibility to import to the United States. - Australia and Canada were allowed to export to the United States while using their own methods and procedures for such matters as E. coli testing, postmortem inspection, monthly supervisory reviews and pre-shipment reviews while awaiting an equivalency determination from FSIS. - FSIS auditors and Canadian food safety officials continue to disagree about whether particular measures have already been found "equivalent" by FSIS, yet Canadian imports remained uninterrupted. - The regulatory systems of Brazil and Mexico have been rated equivalent even though the countries plead insufficient personnel and monetary resources to explain their inability to carry out all required functions.

Record on Deals for Trade Votes: Don't Get Fooled Again - Lessons from NAFTA and China PNTR Deal-for-Vote Swapmeets

December 1, 2001

In this report, we follow up on the status of the NAFTA promises and the China Permanent Normal Relations (PNTR) promises which still had the possibility of being kept. (For instance, a promised fund-raiser is irrelevant once the Member is out of Congress.) Nearly eight years after the NAFTA deals were made and eighteen months after PNTR and promises for domestic programs remained unfunded. The special deals promised to obtain NAFTA and PNTR votes remain unfulfilled. Promises remain unmet even though the Members of Congress involved kept their end of the bargain and voted for NAFTA C some incurring long-lasting political ire at home. Many of the Administration's promises were delivered in formal letters to the target Members by Cabinet Secretaries or the President. Other deals were added into the NAFTA legislation in the House Rules Committee on the eve of the vote. While the letters of "commitment" have made tracking the deals somewhat easier, the letters proved to be worth less than the paper on which they were written. Promises in the NAFTA implementing legislation either were not funded or, in the case of safeguards for Florida fruits and vegetables, were not implemented. Over eight years, the Clinton Administration failed to deliver on the NAFTA vote-deals -- special funding for in-district projects and the policy-related promises to change U.S. regulation. Now, the Bush Administration is trying desperately to gin up support for the controversial Fast Track trade negotiating authority, bill H.R. 3005. Days before the vote, the measure is 40-plus votes short of passage, as critics of corporate managed trade have successfully demonstrated the woefully inadequate track record of NAFTA and the substantial failures of trade agreements to generate jobs, economic growth or protect the environment. The examination of the actual follow through of the deal-making necessary to secure NAFTA and PNTR votes reveals that promises on Fast Track also are unlikely to come to fruition. The Bush Administration's capacity to press Democrats on any spending plan after bailouts of the airlines, additional safeguards for insurers against terrorism losses and huge corporate tax breaks is rapidly eroding, making special pork barrel deals for Fast Track votes less likely to be fulfilled.

Down on the Farm: NAFTA's Seven-Years War on Farmers and Ranchers in Florida

August 1, 2001

In the summer of 2001, family farmers and ranchers throughout North America are struggling. During the 1993 debate over the fate of the North American Free Trade Agreement (NAFTA), Florida farmers and ranchers as well as farm communities across the U.S. were promised that NAFTA would provide access to new export markets and thus would finally bring a lasting solution to farmers off-and-on struggles for economic success. Now, seven years later, the evidence shows the income of independent Florida farmers has declined, consumer prices have risen while some giant agribusinesses have reaped huge profits. Florida has lost 1,000 small and medium sized farms since NAFTA went into effect. Total net income for "farm operations" in Florida increased between 1993 and 1999 but all of the income gain was in corporate farms. When corporate income increases are eliminated farm income drops steeply in Florida. During the seven years of NAFTA, net farm income for non-corporate Florida farm operations fell 74.4% between 1993 and 1999 from $51.4 million to $13.4 million. These bad outcomes for independent farmers are defining the growing national debates over President Bush s proposals to establish Fast Track trade authority and to expand NAFTA to 31 other Latin American and Caribbean nations through the Free Trade Area of the Americas (FTAA). This report documents the results that are causing farmers concern about NAFTA and its model of export-oriented agriculture. This special Florida supplement to a recent national report on NAFTA s agriculture-sector outcomes examines the impact of NAFTA on Florida farmers. For the past seven years, Florida vegetable growers, especially tomato and bell pepper growers, have been facing intense pressure from increasing imported vegetables from Mexico. Florida s citrus crop, the jewel of Florida s agriculture production, is already facing increased pressure from Mexico and will face even further import threats if President Bush is granted Fast Track trade authority. President Bush has announced he is seeking trade authority to negotiate FTAA NAFTA expansion which could result in Florida facing severe competition from powerhouse citrus producer Brazil. Farmers raising beef cattle in Florida who have seen incomes decline as farmgate prices for beef have collapsed in Florida under NAFTA would face new FTAA imports from beef giants Argentina and Brazil. Moreover, sugarcane farmers, who received special protection from Mexican sugar imports when NAFTA was negotiated, face even greater threats from FTAA nation Brazil which dominates the world sugar trade. Brazil has announced that access tothe U.S. for its citrus, beef, and sugar is a non-negotiable requirement for any FTAA deal. The complete executive summary and access to the full report are available via the link below.