Everyone's Talking about Trade: Blog Roundup
Obama: Making Trade Too Complex?

Corporate groups agree: FTAs threaten U.S. sovereignty!

John Engler, president of the National Association of Manufacturers (NAM), actually brings some much needed attention to an issue corporations have often dismissed as fake arguments – current trade agreement rules undermine state sovereignty, namely our domestic ability to set policy priorities and regulate. We're glad that they've reversed their position!

Specifically, Engler says, "For state constitutions or laws to be subject to a foreign nation’s challenge would be unacceptable." Granted, he's talking about corporations' fears about proposed labor provisions in FTAs, but the basic argument holds true across a wide range of issues.

What's really unacceptable that the truly alarming threat to state sovereignty already exists in most NAFTA-style "trade" agreements and in WTO rules. After the break, see some examples of how "trade" rules threaten state laws or policies:

  • Stringent government procurement rules in FTAs dictate what states can or cannot do with their own taxpayer dollars. These rules conflict with "Buy local" or "Buy America" policies intended to promote local economic development; requirements for recycled content in goods or percentage of energy from renewable sources; and prevailing or living wage laws.
  • Procurement rules also threaten policies that target companies' or countries' human and labor rights conditions. Under the WTO, the EU and Japan challenged a Massachusetts law that banned purchases from companies that did business with the Burma (Myanmar) dictatorship.
  • Antigua has launched a WTO case against the United States for our Internet gambling laws. The series of rulings confirmed at least one thing for sure: the United States exposed state gambling laws to challenge under WTO rules – threatening state lotteries, statewide gambling bans (in Utah and Hawaii), and exclusive Indian gaming rights.

Check out our States' Rights and International Trade guide (PDF), which provides an overview of what state and local issues are at stake in trade agreements.

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