Can you say "Déjà vu" in Spanish?

Dear Neighbor:

Congratulations on your inclusion in the elite group of states that are currently negotiating the Trans-Pacific Partnership (TPP) Agreement! Your acceptance into this proposed “historic, 21^st century trade agreement” means that much of the “burden” of making laws and regulations for your nation will be taken off of you. No worries; lobbyists for Hollywood and American pharmaceutical companies and more than 600 official “corporate trade advisers” to the Office of United States Trade Representative (USTR) will help take care of the details.

Sorry to mention it, but we’re afraid many of your laws pertaining to intellectual property (IP), affecting issues from Internet privacy to access to affordable medications, might need a little “tweaking” to ensure they comply with the specifications of U.S. corporate “advisers.” The USTR’s demands at the TPP negotiations read like a wish list from the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Recording Industry Association of America (RIAA), and YOU have the opportunity to grant all their wishes.

You see, the condition the U.S. imposed for Mexico to get a seat at this corporate banquet was that Mexico agree to accept everything that the other countries already have negotiated over the past three years. Sure, NAFTA required some nasty changes to your IP laws. Remember the millions your government wasted trying to lift the U.S. patent on common yellow beans that a bio-prospector filed after NAFTA? Well, wait until you get a look at the 21^st century NAFTA on steroids!

As a part of the “historic” TPP negotiations, it is time for your laws to truly reflect your new “21^st century” status. For instance, you need to expand pharmaceutical patent protection and create new pharmaceutical monopolies in Mexico. You also need to extend copyright protection to device memory buffers and criminalize circumvention of technological protection measures, limiting fair and educational uses of all kinds of literary and artistic content. Overall, you are expected to introduce new, draconian provisions into Mexican law to lengthen, strengthen and broaden IP monopolies in Mexico.

The strict IP enforcement in this scenario may seem very familiar to you. In fact, you fought off a very similar – although less extreme – attack on your privacy and rights on the Internet in 2011 in the form of the Anti-Counterfeiting Trade Agreement (ACTA). Some objections to ACTA expressed by Mexico Senator Carlos Sotelo Garcia in September 2010 included the opaque nature of the ACTA negotiations, stringent IP enforcement measures (championed by the U.S.), and the “erosion” of access to information technology for approximately thirty million Mexican citizens.

A look at any current media coverage of the TPP will reveal a scene that is eerily familiar and equally concerning. Sorry to break the news, but the opacity of the TPP negotiations makes the ACTA process look like a pinnacle of open government. The TPP has been negotiated entirely in secret, with the only glimpse of the text coming from leaks of the IP, investment and other chapters. Furthermore, each of the negotiating nations has agreed to keep all documents besides the finalized text a secret for four years following the conclusion of negotiations, whether it is ever finalized or not. So whereas the same report by Senator Garcia implemented a working group to review the provisions of ACTA, no such legislative oversight would be possible in the TPP. Apparently the only way to get a look at the “21^st century agreement” – even for legislators of the countries in the negotiations – is to introduce a resolution demanding they be allowed to see how trade negotiators are rewriting a nation’s laws. In the U.S, the chairman of the Senate committee with official jurisdiction over TPP, U.S. Sen. Ron Wyden (D-Ore.), has done just that. Yup, the chairman of the Senate Finance Subcommittee on International Trade, Customs, and Global Competitiveness and his staff were explicitly refused access to even the U.S. negotiators’ proposal to the TPP negotiations.

The legislature of Mexico has already expressed its opinion of trade agreements that restrict privacy and rights on the Internet. On June 21, 2011, the Mexican Congress passed a resolution that urged that the Federal Executive not become a signatory of ACTA:

The Standing Committee of the H. Congress, respectfully urges the Federal Executive Power to, within the framework of its powers, instruct the ministries and agencies involved in negotiating the Anti-Counterfeiting Trade Agreement (ACTA), not to sign the Treaty.

Reading this sort of language coming from the national legislature of a sovereign nation, one might draw the conclusion that ACTA is doomed in that country. But foreign corporate interests have found another foothold in the laws of Mexico – in the form of the TPP. You may have believed that ACTA was dead in Mexico, but, like el chupacabras, it is rising again and this time it is even stronger.

Welcome to the 21^st century, dear neighbor.

 

Follow Public Citizen's Global Access to Medicines on Twitter: https://twitter.com/#!/PCMedsAccess
Read more at our webpage: http://citizen.org/Page.aspx?pid=4955

Just Relax, Canada. U.S. Pharma Will Handle It

Dear Fellow Canadians:

Welcome to the Trans-Pacific Partnership (TPP) negotiations! Since you are fresh off a bruising fight getting provisions that protect Internet freedom and privacy into Canada’s copyright Bill C-11, I’m sure that you are exhausted with defending your rights. Take heart. With the TPP, you will not have much of a say on laws or policies threatening your privacy, rights on the Internet or access to affordable medicines. Instead, lobbyists from major American industries and some 600 “corporate trade advisers” have helped lay out some of what the Office of the United States Trade Representative (USTR) expects from you.

These are the same industries that forced major concessions on C-11’s approach to digital locks despite near-universal criticism. Hundreds of pages of new non-trade policy contained in the most sweeping “free trade agreement” could face a mere up or down vote in the House of Commons. And the USTR proposes intellectual property provisions that cover dramatically more than copyright law. They touch a wide range of IP issues.

You thought NAFTA was a pill? Sure, Big PhRMA used NAFTA to attack our drug formulary system and all of those compulsory licenses for affordable meds. But back then, our government drew a line. Despite some considerable hysteria from the U.S. drug industry giants, you did not give away all of our policy space. This time, however, the TPP gives Prime Minister Stephen Harper a way to write all of us a real prescription for high drug prices and cement his view of Canada as an extended playground for corporate America.

Here are some of the highlights of the U.S. proposed IP chapter:

• Expand patent evergreening and create new pharmaceutical monopolies, raising medicine costs;

• Dramatically increase the life of a copyright term from 50 years in most cases under C-11 to 95 years;

• Increase penalties for circumvention and reduce the exceptions for individuals; and

• Establish an American-style notice-and-take down system for online copyright infringement.

This seems like a lot. If you were worried, however, that we had some duty to at least read the proposals for the law and voice our democratic concern, fear not. Negotiators act in secret. The only glimpse of the actual agreement so far has come from leaked copies of the text from the IP, Investment and other chapters. Remember in the good old days of ACTA when the University of Ottawa filed an access-to-information request but received a blacked out document with only the title visible? Expect similar treatment during TPP negotiations. While lobbyists and corporate liaisons are granted electronic access to the agreement, your parliamentary representative might have to walk down to the Department of Foreign Affairs and International Trade to speak personally with The Honourable Ed Fast P.C. , M.P., Minister of International Trade.

Moreover, if you are distressed by the fact that our respectable Department of Trade will have lots of work reviewing all the work done so far once Canada’s negotiators get hold of these secret drafts, you will be relieved to hear that Canada has a lesser role in the negotiations. By coming late to the table, Canada has achieved a second-tier position. This status requires Canada to agree to all the settled chapters, which its officials have not even read, and Canada cannot veto current provisions. Thus, not even lobbyists or the trade minister need concern themselves with settled provisions. The TPP negotiations shut individual citizens and even members of parliament and ministers out of the process.

The public response to C-11 proved that civil engagement has made a difference on intellectual property issues in Canada. The people—frustrated, fearful and bedraggled—woke up to the oppressive measures of industry groups and fought hard. But this is far from the end. In upcoming years, we might still witness the implementation of a multinational corporations’ wish list, which seeks to criminalize copyright infringement, implement ACTA-plus provisions and restrict Canadians’ access to affordable medicines. Through the TPP, the USTR seeks to achieve all these goals and more—without too much of a voice from us. Will we allow American industry to dictate to the Canadian people our rights—or stand up and demand that Canada step down from these negotiations?

Follow Public Citizen's Global Access to Medicines Program: https://twitter.com/#!/PCMedsAccess

James Cormie is a legal intern at Global Access to Medicines Program.  Originally from Edmonton, Alberta, James blogs on issues of trade, IP, and international law.

CAFTA Ruling Continues Corporate Attack on Environmental Protection

Part of Attack on Mining Law Will Proceed at International Tribunal; El Salvador May Pay Millions in Tribunal, Legal Fees Even for Dismissed Claims

WASHINGTON, D.C. – A tribunal constituted under the Central America Free Trade Agreement (CAFTA) ruled that Pacific Rim Mining Corp. could proceed with half of its attack on an El Salvadoran mining law strongly supported in that country by the left and right political parties and the Catholic Church. Given the extraordinary facts of this case, the only reasonable outcome should have been total dismissal and that today’s outcome is even possible spotlights why the extreme investor rights and their private enforcement in foreign tribunals included in past U.S. “trade” pacts must be ended, Public Citizen and Sierra Club said today.
 
Legal observers expected the tribunal, constituted under the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), to deny all jurisdiction. Not only is Pacific Rim a Canadian firm, but it failed to complete the permitting process to operate a mine. The tribunal also held that the Canadian firm could not pursue claims under a trade pact between the United States and six Central American countries, but refused to waive millions in tribunal costs and legal fees accrued by El Salvador defending against that aspect of the attack. It permitted Pacific Rim’s claims at ICSID under an investment law with provisions similar to CAFTA to continue.
 
“The fact that corporate attacks on a sovereign country’s domestic environmental policy before a foreign tribunal would even be possible – much less cost a country millions when a key element of the attack is dismissed – highlights what is wrong with our ‘trade’ agreement model,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “These investor rules are an outrageous example of how ‘trade’ pacts have been stuffed with special-interest terms that empower corporate attacks on basic democratic public interest policymaking at home and abroad.”

“The CAFTA attack on mining policy has reignited the debate about trade pacts’ threats to the environment and public health, and spotlights why the Obama administration must exclude these extreme investor rights for future trade deals,” said Margrete Strand Rangnes, director of Sierra Club’s Labor and Trade Program. “Even when a country successfully defends against elements of an attack on its environmental laws, it can face major legal costs. The very existence of this undemocratic mechanism threatens critical environmental and health improvements.”
 
Unfortunately, the long tragedy of the Pacific Rim case is not over. The tribunal found that, thanks to a neoliberal law put in place by El Salvador in 1999, many claims similar to those under CAFTA can continue to be adjudicated in foreign courts, namely at ICSID. That poor countries have been pushed to offshore their very judicial systems – through trade pacts’ investor-state enforcement systems and through investment laws like El Salvador’s – show that the world needs a fundamental rethink of the way we regulate foreign investment, said Public Citizen and Sierra Club.

The tribunal’s conclusion that this Canadian firm could not pursue CAFTA claims is welcome. But that El Salvador could be charged millions for costs related to that aspect of the case is outrageous, given Pacific Rim had no U.S. business activity and established a U.S. corporation only months before launching its CAFTA case. Public Citizen and Sierra Club urge the tribunal to waive these costs, already totaling millions.
 
Pacific Rim began exploring for gold in El Salvador in 2002 and applied for an “exploitation permit” in December 2004. Its application lacked three of the five required elements, and no permit was issued. A year later, CAFTA went into effect. In December 2007, Pacific Rim reincorporated a Cayman Islands corporate shell (which had formally owned the Salvadoran operations) in Nevada. Shortly thereafter, the company launched the first environmental challenge under CAFTA, using the extremely controversial “investor-state” enforcement procedure. This process allows investors to directly sue signatory governments in foreign tribunals, where they can demand cash compensation for government policies they claim undermine their new CAFTA investor rights. Pacific Rim’s attack on El Salvador demanded more than $200 million in compensation, alleging (among other claims) that the failure to automatically issue an exploitation permit was a violation of CAFTA.

“These trade pact investor attacks ring an alarm across the political spectrum – from conservatives concerned about sovereignty threats posed by the U.S. government being under the jurisdiction of foreign tribunals, to progressives concerned about corporate attacks on domestic environmental or health policies,” said Wallach. “Do we want to leave a two-track justice system to our children: one for multinational corporations and another for average citizens?”

The Pacific Rim CAFTA case also spotlights how a U.S. “trade” agreement can be exploited by a multinational mining firm to attack El Salvador’s fragile democracy, which emerged from 12 years of civil war, and to undermine the laws enacted by its elected leaders to regulate mining and safeguard the environment. Although Salvadoran civil society has been effective in getting the government to review the potential environmental and social impacts of mining, the government has made no decisions about future mining policy. CAFTA’s extreme investor rights now loom over these policy decisions, with the government forced to calculate potential CAFTA liabilities against publicly demanded improvements in environmental policy. Another CAFTA attack on the mining law by U.S. firm Commerce Group was dismissed last year because that firm had not terminated its domestic legal challenge of the law, but the firm has since filed to annul the dismissal.
          
Increasingly, multinational companies are using trade-agreement investor rights in situations where natural resources and public health are at stake. Of the 137 investment cases pending before ICSID, 59 cases relate to oil, mining or gas projects. The Pacific Rim case also raises much broader concerns about the foreign investor rights provided in U.S. trade agreements. Even assuming that foreign firms meet all laws in effect in another country when setting up operations, a trade agreement should not guarantee that foreign firms are sheltered from or compensated for having to meet new laws that apply to foreign and domestic firms equally that are enacted through normal democratic practices, Public Citizen maintains.

“We have seen an alarming increase of cases related to oil, mining and gas projects with hundreds of millions of dollars already paid to corporations through these secret trade tribunals,” said Strand Rangnes. “Not only are the environmental and health implications for local communities severe, but this is also the exact wrong way to go as we look to curb global warming and climate change.”

TPP Chiefs Raise Doubts about USTR’s Corporate IP Wish List

At the May 13th stakeholder briefing of the Trans-Pacific Partnership (TPP) trade talks outside Dallas, at least six countries' Chief Negotiators began to openly distance themselves from the Office of the United States Trade Representative (USTR), particularly from USTR’s radical intellectual property (IP) proposals, which would expand the scope and duration of pharmaceutical monopolies and challenge internet freedom.

In the past, these stakeholder briefings have felt like exercises in the art of saying little. USTR has sought to keep all nine countries on a common, limited message. But perhaps USTR can only push other countries and the public so far.

Early in the session, I asked the Chiefs:

The past year has witnessed the rise of an internet freedom social movement, with more than 3 million people petitioning the US Congress to block SOPA [the Stop Online Piracy Act] and tens of thousands protesting in the streets across Europe to shut down ACTA [the Anti-Counterfeiting Trade Agreement]. I think in Poland, these may have been the largest demonstrations since the Solidarity movement. Even Germany’s ministry of economic development is recommending against developing countries signing ACTA. Given that you are not releasing the TPP text, how will you assure people that the TPP will not pose similar problems?

Chile kicked things off, answering:

We are nine countries with many different positions—we are not all the same.

This may sound tame, but for those listening to the evolution of TPP sound bites, it was a surprisingly public distancing from USTR and its copyright and enforcement demands. And it set the pace for the day.

More Tumult at the TPP: Secret Negotiations Against Internet Freedom Continue this Week in Chile; Big Pharma Allies Attempt to Shut Down Critics’ Event (Again)

Talks on the Trans-Pacific Partnership Agreement (TPP), which the U.S. is negotiating with Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam, are continuing this week (April 9-13) in Santiago, Chile in the form of an “intersessional meeting” on intellectual property (IP) – focusing on internet policy. The last time such a meeting was convened on IP in January in Hollywood, a stakeholder event organized by public interest groups in the same hotel as the negotiations was cancelled after the hotel received pressure from the Office of the United States Trade Representative (USTR). Simultaneously, USTR made sure the Motion Picture Association of America (MPAA) had access to negotiators, as they were given an exclusive tour of 20th Century Fox Studios guided by a representative of the studio’s government relations office.

USTR is clamping down on public participation to minimize the spread of information which challenges their hardline IP maximalist agenda. In addition to increasing reliance on intersessionals, like this week’s Santiago meeting, where stakeholders are not given a forum to participate, USTR has now effectively reduced stakeholder participation in the official negotiating rounds by eliminating their opportunity to give presentations to negotiators in an official forum. USTR’s response signals the substantial impact critics of the TPP are having. At the March negotiating round in Melbourne, one stakeholder presentation after another criticized USTR’s aggressive pro-Big Pharma patent proposal, filling most of the afternoon. Now TPP countries are resisting USTR demands that would imperil their access to medicines.

Cozy relationships with government aren’t the only way corporations are influencing these talks. This week, American University and the University of Chile arranged to host an event to present analyses critical of particular proposals in the TPP. These include leaked provisions that would greatly favor Big Pharma, expand drug monopolies and raise medicine prices. The keynote speaker was to be Senator Ricardo Lagos, a major political figure in Chile considered to be a possible candidate for the Presidency. Nevertheless, the public University of Chile law school canceled the event on less than two days’ notice, evidently on the advice of a member of the faculty who is a paid advisor of the multinational pharmaceutical companies’ association in Chile (the Cámara de Industria Farmacéutica, or CIF).

The cancellation sent organizers scrambling for a new venue, which they found in Chile’s Catholic University.

Stakeholders from a spectrum of communities concerned with the implications of the TPP are continuing to shine light on the negotiations. Criticism of the TPP process is mounting from members of both state and federal government in the United States. Internet activists in Chile are calling on their government to defend the rights of their citizens from what could be the next SOPA, while analyses from academic experts on IP show that the U.S.-proposed TPP provisions go beyond those seen in ACTA. Meanwhile, USTR claims that allowing 600 corporate advisors to examine the negotiating text, including representatives of the Recording Industry Association of America (RIAA) and the Entertainment Software Association (ESA), while keeping it hidden from the general public justifies their claim of “unprecedented” transparency in the negotiations.

SOPA proved that the netroots can beat IP maximalism and rulemakings from Washington designed to curb internet freedom, while the populist response to ACTA has shown that policy laundering attempts by industry and their allies in government will face serious resistance. Ambitious, secret economic agreements have been defeated before through public awareness and organizing. Now it’s time to stand up and tell our governments we will not stand idly by while our rights are under siege.

Obama Ignores Korean Request for Changes to Trade Deal; Implementation Rushed to Beat Korean April Election

Korean Party Expected to Win Warns Obama It Will Revoke Pact Absent Changes

 WASHINGTON, D.C. – The Obama administration should accept Korean demands to remove controversial private corporate protections from the Korea Free Trade Agreement (FTA), rather than rush to implement the deal ahead of the April 11 Korean parliamentary elections (which recent polls indicate will elevate a political party that has vowed to terminate the pact unless the “investor-state” enforcement system is altered), Public Citizen said today. The mid-month implementation date being pushed for the Korea FTA is extremely rare for the United States. Generally, trade pacts are implemented on the first day of a month, since tariff cut phase-ins are determined from the date a pact goes into effect.

On Dec. 27, 2011, the Korean parliament passed a resolution calling for FTA renegotiations to remove the private investor enforcement system. On Feb. 8, nearly 100 parliamentarians – mainly from the opposition Democratic United Party (DUP), which is expected to gain control of the parliament in April – wrote President Barack Obama, vowing to terminate the FTA if it is implemented without changes. Shortly thereafter, the United States Trade Representative announced that the pact would be implemented on March 15.

Tens of thousands of anti-FTA protestors are again in the streets of Korea, while Korean polling shows 70 percent opposition to the pact. The FTA is one of the defining issues of the Korean election. The ruling party reorganized under a new name after polling predicted defeat by the DUP, which has made opposition to the current FTA one of its marquee issues.

“Just how damaging this deal is to the 99 percent in both countries has been repeatedly revealed from this latest disgrace of trying to outrun the democratic accountability of Korea’s election to the White House, notably canceling a public bill-signing ceremony after the FTA was passed here,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “By rushing the implementation, the Obama administration is trying to cement in the extreme NAFTA-style corporate investor privileges that candidate Obama pledged would not be included in his trade agreements and that a large majority of Korea’s parliament also opposes.”

 NAFTA-style foreign investor privileges and their private “investor-state” enforcement are among the most controversial aspects of past U.S. trade deals. In fact, this provision is now emerging as a point of major contention in the Trans-Pacific Partnership (TPP) negotiations, where Australia has indicated it will not accept “investor-state” enforcement. The terms of “investor-state” promote job offshoring by requiring host countries to guarantee privileged treatment for foreign investors, forbidding limits on investors’ capital transfers, and providing corporations with a private enforcement of these rights. The system allows corporations to sue governments directly for cash damages in tribunals of three private-sector lawyers who alternate between serving as “judges” and bringing cases against governments for corporations, and who operate under arbitration rules of the World Bank and United Nations.

 The “investor-state” regime eliminates many costs and risks normally associated with relocating production to low-wage developing countries. It also exposes a wide range of common government policies and actions to challenge outside domestic courts. Currently, Chevron is using an “investor-state” tribunal to try to avoid paying $18 billion in environmental cleanup and punitive damages ordered after 18 years of U.S. and Ecuadorian court rulings. Philip Morris is using the system to attack Australian and Uruguayan cigarette plain packaging laws. More than $675 million has been paid by governments to corporations under U.S. pacts’ “investor-state” provisions alone, 70 percent of which has been in attacks on environmental, health and other non-trade policies.

 A greater percentage of Democrats in the U.S. House of Representatives opposed Obama on the Korea FTA’s passage (and two other trade deals passed the same day) than on any other legislation during his presidency. A higher percentage of House Democrats voted against Obama on this deal than did House Democrats against former President Bill Clinton’s North American Free Trade Agreement (NAFTA) or China’s entry into the World Trade Organization.

 The official U.S. International Trade Commission study showed that the Korea FTA is projected to increase the overall U.S. trade deficit, with seven U.S. manufacturing sectors particularly hard hit. The Economic Policy Institute used government trade balance data to project that the pact would cost 159,000 American jobs in its first seven years.

 The pact, signed before the global financial crisis, also includes limits on financial regulation. The Obama administration did not remedy this problem in 2010 when it tweaked auto trade provisions of the pact that had been signed in 2007 by then-President George W. Bush. Citigroup called the Korea FTA “the best financial services chapter negotiated in a free trade agreement to date.”

“The Korea FTA has become the major campaign issue in Korea. And given the growing focus on American manufacturing in the U.S. election, I suspect many American politicians will rue the day that they supported a deal that even the official government studies show will increase our trade deficit and slam seven U.S. manufacturing sectors,” said Wallach.

 

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Public Citizen is a national, nonprofit consumer advocacy organization based in Washington, D.C. For more information, please visit www.citizen.org

Public Citizen statement on ruling in favor of Chevron

Speaking of the Chevron case, there was just a major development. Here's the ruling, and here's our statement:

Will Chevron Case Take Down Trade Pact ‘Investor-State’ Enforcement System?

Unprecedented Ruling Today by International Investor Tribunal Orders Ecuadorian Government to Violate Its Constitution, Interfere in Its Independent Court System to Help Chevron Evade Liability for Amazonian Contamination

WASHINGTON, D.C. – An unprecedented ruling, in which an investor-state international arbitral tribunal initiated by Chevron ordered the Ecuadorian government to interfere in the operations of Ecuador’s independent court system on behalf of the oil giant, provides a chilling glimpse of how corporations are trying to use international investor tribunals to evade justice, said Public Citizen.

After having lost on the merits in Ecuador and U.S. courts and after 18 years of trying to stall judgment, Chevron turned to an ad hoc “investor-state” tribunal of three private lawyers as the last chance to help the company avoid paying to clean up contamination in the Amazonian rainforest. Chevron is trying to get this private tribunal to suspend enforcement of or alter an $18 billion judgment against Chevron rendered by a sovereign country’s court system.

The tribunal issued a ruling yesterday even though it has not even determined that it has jurisdiction over the case. Past such international investor cases in which tribunals have ordered governments to pay cash damages to corporations have led to growing controversy.

“The Ecuadorian government should not violate its own constitution and interfere with its independent courts’ order for Chevron to clean up its horrific contamination in the Amazon, because some unelected ad hoc tribunal of three private sector lawyers called together by Chevron to meet in a rented room in Washington, D.C., pretends to have the authority to second-guess 18 years of U.S. and Ecuadorian court rulings,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

“Consider the broader implications of this star chamber ‘investor-state’ system: How can a panel of three unelected private sector lawyers order a sovereign government to violate its own constitution’s separation of powers and interfere in its court system, all to help Chevron (a company whose severe contamination of the Ecuadorian Amazon has been repeatedly proven), and how can that tribunal do this all before it has even decided that it has jurisdiction over this case,” Wallach said.

Meanwhile, the three private-sector lawyers serving as tribunalists on this kangaroo court will continue to rack up large hourly fees even as they order Ecuador’s government to help Chevron deny justice to the 30,000 Amazonian indigenous people who have won a historic $18 billion clean-up of deadly environmental contamination. Tribunalists in this system, who alternate between serving as “judges” and representing corporations in cases before panels of their colleagues, are paid on an hourly basis.

“The only silver lining of this obscene ruling is that having one of these shady investor-state tribunals presume to attack a country’s constitution, justice system and 30,000 people whose futures rely on Chevron cleaning up its mess could lead to the implosion of the entire investor-state system, which international companies are increasingly using to try to evade justice worldwide,” said Wallach.

These unaccountable investor-state tribunals have issued perverse rulings in the past on behalf of corporate claimants. Recent U.S. trade agreements empower foreign corporations to use this system to skirt our domestic courts and directly use our government before these corporate tribunals to obtain payment of unlimited taxpayer funds when they claim domestic environmental, land use, health and other laws undermine their “expected future profits.”  More than $350 million has been paid by government to corporations in attacks on toxics bans, environmental issues and zoning permits under the North American Free Trade Agreement (NAFTA.) Billions in additional claims are pending. Possible inclusion of the investor-state private enforcement system for corporations to sue governments is becoming one of the most controversial issues in the first “trade” deal the Obama administration is negotiating – a new Trans-Pacific Partnership trade deal.

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Public Citizen is a national, nonprofit consumer advocacy organization based in Washington, D.C. For more information, visit www.citizen.org.

Will Chevron case take down trade pact investor-state system?

After having lost on the merits in Ecuador and U.S. courts, Chevron has turned to an ad hoc “investor-state” tribunal of three private lawyers to help the company avoid paying to clean up horrific contamination in the Amazonian rainforest.

Chevron is trying to get this private tribunal to suspend enforcement of or alter an $18 billion judgment against Chevron rendered by a sovereign country’s court system. The closed-door tribunal will meet in a rented room in Washington, DC Saturday and Sunday (February 11-12).

These unaccountable panels, from which no outside appeal is available, have issued perverse rulings in the past on behalf of corporate claimants. Recent U.S. trade agreements empower foreign corporations to use this system to skirt our domestic courts to directly use our government before these corporate tribunals to obtain payment of unlimited taxpayer funds when they claim domestic environmental, land use, health and other laws undermine their “expected future profits.” Really! This is becoming one of the most controversial issues in the first “trade” deal the Obama administration is negotiating - a new Trans-Pacific Free Trade Agreement (FTA).

Public Citizen, Amazon Watch and the Rainforest Action Network are standing up to Chevron's kangaroo court by organizing a rally and conducting a Teach-In at American University about Chevron's attempt to use the investor-state system to evade justice. They also will be conducting a press briefing. You are invited to attend all events.

Public Citizen Applauds Obama Administration’s Appeal of Trade Ruling Against U.S. Dolphin Protection Measures

Public Citizen commends the Obama administration for taking the necessary step of appealing today the harmful World Trade Organization (WTO) ruling against U.S. consumer and dolphin protection measures.

In September 2011, a WTO panel ruled that the U.S. dolphin-safe tuna labeling law violates WTO rules. The labels have been enormously successful in reducing dolphin deaths by tuna fishers – a major problem in the past, when tuna fleets set upon dolphins to catch tuna, since the two species associate with one another in the Eastern Pacific Ocean. The label allows consumers to “vote with their dollars” for dolphin-safe methods. Mexico successfully challenged the U.S. standard after decades of refusing to transition its fishing fleet to more dolphin-safe fishing methods.

The ruling’s implications are dire, especially in the context of a decades-long battle to save dolphins. This struggle has been beset by countless trade-related obstacles: 1991 and 1994 rulings under the WTO’s predecessor organization led to the U.S. eliminating the more potent import ban of dolphin-unsafe tuna, and environmentalists fighting successfully in U.S. court to block the Clinton and Bush administrations from also watering down the voluntary labeling policy. These groups narrowly blocked this executive branch effort, which U.S. courts deemed “Orwellian” and “a compelling portrait of political meddling.” The legitimacy of the WTO is likely to be further undermined if the WTO’s Appellate Body upholds the lower panel ruling. Consumer and environmental groups will see that the WTO allows anti-environmental forces a second (or third) bite at the apple, even when such forces fail in their U.S. legal and political efforts to undermine a domestic policy to which they object.

The Obama administration is considering expanding some of these anti-consumer and environmental rules in the first trade deal it is negotiating: the nine-nation Trans-Pacific Free Trade Agreement. The WTO ruling – and two others in 2011 against country-of-origin labels on meat and a ban on sweet cigarettes used to entice teens into smoking – show that a new approach to trade policy is needed, one that puts consumers, the environment and communities first.

NAFTA a way to restart Keystone Pipeline?

The Obama administration made a lot of us environmentalists happy with yesterday's decision to reject the Keystone XL pipeline.

Given that the Canadian government and corporations appear to be steaming mad about this, it's worth all of us reflecting on what their next move could be. A NAFTA case, for one, does not seem out of the question.

(If it seems far-fetched that Canadian entities might pursue these options, think of how much energy they've put into this pipeline. Compare this with how relatively little energy they've put into opposing U.S. financial regulations, yet in that case, they've already threatened to invoke NAFTA to derail the Dodd-Frank financial reform legislation.)

On what basis might a Canadian corporation, say, challenge the decision to reject the pipeline? The pending case against the Sultanate of Oman brought by U.S. investor Adel A Hamadi Al Tamimi under the US/Oman FTA is instructive. (That FTA is modeled on NAFTA.)

Mr. Al Tamimi is a UAE native, naturalized U.S. citizen and real estate developer in New England who invested in Oman through two UAE shell companies.  In 2006, his companies concluded ten-year lease agreements with the Oman Mining Company LLC (OMCO, a state-owned enterprise) related to a limestone quarrying/crushing operation.  OMCO committed to “use its best endeavors” to obtain “the necessary environmental and operating permits.”  In August 2007, OMCO told al Tamimi’s companies that the permits had been obtained, and that he was contractually required to commence operations,  which he did in September. Within weeks, officials from the Commerce and Environmental Ministries told al Tamimi that the final permits had not been obtained, and various stop-work orders were issued. 

As al Tamimi states, “OMCO now had to make a choice: it could fulfill its obligations under the Lease Agreements, which would mean disobeying or confronting the Environmental and Commerce Ministries, or it could use whatever leverage it had over the Companies and exert every effort to get them to suspend their operations until a solution could be found to the permitting issues. It chose the latter.”

By April 2008, al Tamimi had ceased operations.  Al Tamimi racked up various environmental fees, which he apparently did not pay.  In April 2009, OMCO told al Tamimi that he was in violation of environmental laws,  and in May 2009, he was arrested.  After being convicted of stealing and breaking environmental laws by a criminal court in November 2009, his conviction was overturned by an appeals court in June 2010.

Tying this back into the FTA rules... In 2011, al Tamimi launched an investor-state case under the Oman-U.S. FTA. He alleges that Oman expropriated his property rights by terminating the leases and bringing “the full force of the police power of the State to ensure cessation of all activities…”  He additionally claims that Oman undermined “his legitimate expectations” that he would be able to conduct quarrying operations and failed to provide “protection and security,” in violation of the U.S.-Oman FTA’s fair and equitable treatment (FET) standard.  He also says that other quarrying operations which he “believes to be owned and controlled by nationals of Oman” have been allowed to operate quarrying operations, in violation of the FTA’s national treatment obligations.

Similar arguments could be constructed in the Keystone case under NAFTA. TransCanada could point to a long string of overtures by the U.S. government that led it to develop "legitimate expectations" (as that is defined under trade law) that it would be able to build the pipeline, going from the private assurances in favor of the pipeline (recently revealed by FOIA documents to Friends of the Earth) and ending in the December 2011 payroll tax cut (which included Keystone-related provisions).

Those "expectations" could be then measured against what could be characterized under the FET standard as an arbitrary decision-making process, as when the Obama administration delayed the pipeline decision in November 2011 until after the presidential election.

TransCanada could point to some domestic pipeline operators that have not confronted similar hurdles as a basis for a National Treatment claim under NAFTA, while they could point to any lost expected future earnings as a basis for an "indirect expropriation" claim.

Stranger cases over much smaller sums of money have been launched before. There's been an outrageous string of cases against El Salvador over mining permitting issues. Over $350 million in compensation has already been paid out to corporations in a series of investor-state cases under NAFTA-style deals. This includes attacks on natural resource policies, environmental protection and health and safety measures, and more. In fact, of the over $12.5 billion in the 17 pending claims under NAFTA-style deals, all relate to environmental, public health and transportation policy – not traditional trade issues. For a full rundown of these NAFTA-style cases up until now, see this link.

If all of this seems like an outrage, it is. And what's worse is that the Obama administration is considering putting similar investor rules in a NAFTA-style deal with nine nations, called the Trans-Pacific FTA. Stay tuned for more on this!

99 Percent Asked to Leave While the 1% Takes Center Stage At Trans-Pacific FTA Hearing

The Occupy movement was in full force in Washington last week, as local activists and members of Trade Justice New York Metro attended the Trans Pacific Free Trade Agreement (FTA) hearings. The activists wanted to tell members of Congress as well as officials from the Office of the U.S. Trade Representative (USTR) that the Trans-Pacific FTA needs to live up to the high standards the Obama administration promised the American people.

The activists donned t-shirts, with the messages “Don’t Trade Our Lives Away,” “Make Trade Fair for the 99 percent,” and “Got Text?” to represent their opposition to the way the Trans-Pacific FTA has been negotiated thus far. During an intermission between panelists, the activists linked arms and stood by the door to allow the press and members of Congress to read their messages of dissent. The Capitol police photographed the activist attending the hearing and then promptly asked them to leave. While it was clear that the 99% was not wanted at the hearing, the 1% took center stage before the powerful Ways and Means Committee, which oversees trade deals.

First, the panel heard the testimony of Deputy U.S. Trade Representative, Ambassador Demetrios Marantis.

Angela Hoffman, Vice President of Global Integrated Sourcing and Trade for Wal-Mart Stores, also testified in favor of some very one-percenter policies. The Wal-Mart representative stated, “USTR should consider alternative approaches to yard forward provision.” The “yard-forward rule of origin” provisions was presented by members of Congress trying to protect over 470,000 American workers in their districts, who are employed in the US textile industry and cannot compete with the low wages paid to workers in Vietnam and China. Wal-Mart also pushed for greater liberalization of non-tariff regulations such as “limitations on size, geographic locations and merchandise assortment.

One of the concerns presented by the activists is the lack of transparency. While Obama and the USTR stated that they would usher in a new era of transparency, this has not been the case. Instead, the only text of the negotiations that has been released is a memo of understanding signed by the Obama administration and negotiating parties that they will not release the text of the negotiations until 4 years after the deal is concluded or the talks have ended. Activists were also concerned with troubling limitations on access to medicines, which may occur if trade negotiators extend intellectual property rights as well as data exclusivity beyond the May 10, 2007 agreement, which helped to increase access to medicine by allowing low income countries to produce generic medicines under more flexible arrangements.

Members of Congress have also issued letters to the United States Trade Representative, Ron Kirk, to ensure that the new TPP negotiations do not worsen access to medicines for critical programs to combat AIDS, malaria, tuberculosis, and other life-threatening diseases. Yet, it seems as if US trade negotiators hear the voices of the 1% far louder than those of the 99%, and are now considering a medical pricing proposal brought to them by Big Pharma. We have not forgotten the words made when President Obama was simply the Senator from Illinois, fighting for the 99% “Together, we must forge trade that truly rewards the work that creates wealth, with meaningful protections for our people and our planet.” We will fight to keep this promise even if the 1% do not.

COOL Ruling Not COOL

As we noted last week, the WTO has just issued a major ruling against U.S. country-of-origin labels (COOL) on meats. The decision confirms the direst predictions when the WTO was established, which questioned the wisdom of setting internationally binding rules against consumer protection.

The ruling and its six supporting annexes are hundreds of pages long, so going through all of them will take some time. Here are some additional items that we did not include in our longer analysis from Friday.

COOL is hearted by consumers

COOL is very popular, as the Obama team noted during the proceedings:

Numerous polls also indicate strong consumer support for mandatory country of origin labeling. Among the polls cited in various submissions received by USDA during the regulatory process are the following:

• 92 percent of respondents in a 2007 Consumers Union poll believed that imported foods should be labeled with their country of origin
• 88 percent of respondents in a 2007 Zogby poll indicated that they want all retail foods labeled with country of origin information
• 95 percent of respondents in 2007 Zogby poll indicated that they have a right to country of origin information for food
• 82 percent of respondents in a 2007 Food & Water Watch poll supported mandatory country of origin labeling
• 82 percent of respondents in a 2004 nationwide poll conducted for the National Farmers Union supported country of origin labeling
• 86 percent of respondents in a 2002 survey for Packer magazine supported country of origin labeling

However, the panel didn’t explicitly mention these polls. Throughout much of the proceedings, it was treated as an open question whether consumers actually wanted COOL.

Democracy is impermissibly uncertain; hortatory is the new mandatory

This WTO decision is the most recent of three cases with deeply troubling implications for consumers. In September, the WTO also ruled against U.S. efforts to reduce teenage smoking and dolphin mortalities. In the dolphin case, the purely voluntary dolphin-safe labeling scheme was deemed “mandatory,” despite the fact that tuna not having the label was and is sold in the U.S. After that ruling, we joked that “voluntary is the new mandatory.”

But this COOL ruling takes this joke to sad new levels, so that “hortatory is the new mandatory.”

Here’s why.

Songs of Protest Occupy APEC

While world leaders met inside well-secured hotels and facilities last weekend during the Asia-Pacific Economic Cooperation, the streets of Waikiki were occupied with voices of dissent.

First, on Friday, union workers from the International Brotherhood of Electrical Workers (IBEW) went on strike against the phone company Hawaii TelCom. Striking workers protested against the company’s export of Hawaii jobs to Saipan and its demand to reduce crucial worker benefits.  The opportunity to demonstrate the connection to APEC and the current negotiations between the Trans-Pacific Free Trade Agreement (FTA) countries was not lost on workers and civil-society. IBEW and UNITE-HERE Local 5 sponsored a rally and teach-in on the FTA that was attended by labor groups, international allies and local activists. Hundreds poured in during the rally to denounce APEC’s conference of bankers, corporations and politicians and the secret negotiations seeking to expand a NAFTA of the pacific.

The following day many more protesters and Occupiers marched from Honolulu to the center of Waikiki chanting and voicing their opposition to APEC’s free trade talks. (Read more about the march here.) But the most creative outlet to decry the summit’s intent on corporatizing the world came from renowned Hawaii guitarists and singer Makana. The artist was invited to perform at an APEC gala held inside Hale Koa hotel. He surprised world leaders by not only wearing a t-shirt that read “Occupy with Aloha,” but also by singing protest ballad called “We are the Many.” Check out the performance below:


Read more about Makana occupying APEC here.

Trade disaster: Congress votes tomorrow

A message from Lori Wallach, Director of Public Citizen's Global Trade Watch

You don't hear from me often. Over the past year, I have spend most of my time on Capitol Hill, meeting with members of Congress, educating them about our current flawed trade policy and how we can create a trade model that works.

I have been working to get a majority on Congress to say NO to the three devastating NAFTA-style trade deals signed by Pres. Bush that now Pres. Obama is trying to ram through Congress.

But today, I urgently need a favor from you. It will take about five minutes. Congress will vote on these job-killing, unsafe-import-flooding deals on Wednesday. I need you to pick up the phone and call 1-800-718-1008 right now to stop the three unfair trade deals with Korea, Colombia, and Panama.

Take 5 minutes to save jobs. Dial 1-800-718-1008 and tell your Representative to vote NO on all three flawed trade deals.

Here’s why:

• The Korea trade deal is the largest offshoring deal of its kind since NAFTA. If approved, the deal will displace 159,000 American jobs in the first seven years. Even the official U.S. government study on the Korea pact says that it would increase our trade deficit, and it hits the "jobs of the future” sectors hardest – solar, high speed trains, computers. [Learn more]
• We should have never even discussed a new trade deal with Colombia, the world capital for violence against workers. More unionists are assassinated every year than in the rest of the world combined. In 2010, 51 trade unionists were assassinated. Do you think we would consider a trade deal with a county where 51 CEOS were murdered? So far in 2011, another 22 have been killed, despite Colombia’s heralded new "Labor Action Plan.” [Learn more]
• The Panama agreement has many of the same problems as the other two deals -- undercutting the reregulation of the big banks and speculators who destroyed our economy and empowering foreign investors to attack U.S. health, safety, labor and environmental laws before foreign tribunals. But, Panama is also one of the world’s largest tax havens. There, rich U.S. individuals and over 400,000 corporations take advantage of the offshore financial center, many dodging paying the taxes our communities desperately need. This FTA would undercut our current tools to fight tax dodging and money laundering. [Learn more]

Stop the trade deals that replicate the failed policies of the past. Call your Representative today.

Behind the scenes and throughout the country, our team has done everything we can do to try and get through to the leaders in Congress to stop these trade agreements. But it looks like many of our leaders in Washington—both Democrats and Republicans—are siding with corporate lobbyists instead of learning from the experience of working Americans.

YOU know the reality of these trade deals better than corporate lobbyists—and Congress needs to listen to you.

Please call 1-800-718-1008 right now.

Speak out with millions of Americans against the job-killing trade deals that only reward fat cats, off-shore our jobs and undermine our environmental and financial stability safeguards.

Flipper gets axed by the WTO

Today, U.S. efforts to reduce dolphin deaths by corporate tuna fishers through dolphin-safe labels on tuna were found to violate the WTO. This follows last week's ruling that U.S. efforts to reduce teen smoking violated the trade organization's rules. These smackdowns of major consumer regulations will be followed by a third in the near future, when the WTO is expected to rule against country of origin labeling for beef.

What this ruling means for consumers and dolphins

When the WTO rules against a country's policy, that country has to change the law to comply, or risk trade sanctions.

The U.S. will have to get rid of the dolphin-safe labels, or water down the policy to Mexico's satisfaction. Mexico's long-standing position (reiterated in this case) is that it should get to receive a dolphin-safe label, even though tuna corporations there use methods to capture tuna that are dangerous for dolphins.

The U.S. currently defines "dolphin-safe" as tuna not caught using dangerous purse-seine nets anywhere in the world. For tuna caught in the Eastern Pacific, a unique region where dolphins and tuna swim together, additional steps are required to earn the label.

Shipping fleets of the U.S. and many developing countries (like Ecuador) operating in the Eastern Pacific have been able to meet these higher standards, thereby giving greater assurance to consumers that their tuna purchases are not harming dolphins.

In contrast, much of the Mexican fleet has chosen not to take such steps. Mexico has advocated use of a distinct standard that even the WTO acknowledges is weaker than the U.S. standard. The WTO ruling wrote of that distinct standard:

... taken alone, it fails to address unobserved adverse effects derived from repeated chasing, encircling and deploying purse seine nets on dolphins, such as separation of mothers and their dependent calves, killing of lactating females resulting in higher indirect mortality of dependent calves and reduced reproductive success due to acute stress caused by the use of helicopters and speedboats during the chase. 7.739 We also note that, to the extent that the AIDCP standard addresses setting on dolphins and not other fishing techniques that may also result in adverse effects on dolphins, it would also not provide an effective or appropriate means of fulfilling the US objectives in this respect.

Nonetheless, the WTO ruled against the U.S. standard. (We explore more of the details of the ruling below.)

Initial reports indicate that the Obama administration will appeal the ruling, although the track record of successful appeals is very limited and the WTO rules against challenged policies 90 percent of the time.

The broader worry is that this ruling leaves the door wide open to attacks on similar environmental and consumer policies - not only in the U.S., but all WTO member countries.

What this ruling means for trade policy

All three of these cases have something in common: none of them related to efforts by the U.S. to intentionally discriminate against foreign goods, nor to protect our own producers. Indeed, in the beef and dolphin cases, no discrimination could even be proved. (In the smoking case, a finding of "discrimination" was established in a biased analysis we detail here.) This alone would suggest that a trade organization has no business passing judgment on such policies.

But we are in a new era of trade policy, where even non-discriminatory, reasonable, even-handed, popular policies (some with virtually no impact on international trade) can be ruled against.

What's more, all three consumer policies could be considered very "free market"-oriented. Rather than the big old government telling Americans what they can and can't consume, the dolphin and beef policies simply require honesty in labeling, so that the consumer can decide on their own free will what to consume, and let the market works its magic.

We've long known that more interventionist government policies (like import bans) can run afoul of trade rules. Indeed, the two adverse rulings at the WTO's predecessor organization in the early 1990s against the U.S. ban on dolphin-unsafe tuna led to the eventual removal of that effective and popular policy tool. Now, with today's ruling, we learn that even regulation by more "free market" means is on the WTO chopping block.

This is going to make it harder for the Obama administration to sell similar anti-consumer trade initiatives like the trade deals with Korea, Panama and Colombia to free-marketeers and environmentalists across the political spectrum.

The long saga of protecting dolphins

After passage of various dolphin protection laws in the 1980s, the U.S. fishing industry abandoned the cruel and environmentally devastating practice of surrounding dolphins with mile-long purse seine nets to trap the schools of tuna fish swimming under the hunting mammals.  The practice had led to the death of millions of dolphins in the Eastern Tropical Pacific, where dolphins accompany schools of tuna.  The U.S. laws forbid the sale of tuna caught with purse seine nets.

In 1991, a General Agreement on Tariffs and Trade (GATT) tribunal ruled that this ban violated GATT rules forbidding discrimination. With the debate over NAFTA’s passage raging, Mexico decided not to impose trade sanctions when the United States maintained the laws. The U.S. prohibition was again successfully challenged under GATT by the European Union in 1994.

After NAFTA’s passage, the Clinton administration launched an intense effort to change the U.S. law to bring it into compliance with the initial ruling, while Mexico threatened a new WTO case to enforce the old ruling. After a lengthy battle with Congress, the Clinton administration managed to pass a new policy that removed the ban on U.S. sales of tuna caught with purse seine nets.

However, an attempt by the Clinton and Bush II administrations to weaken the related labeling law defining what could be labeled “dolphin safe” was reversed after a series of U.S. court cases.

Bulldozing Democracy One FTA at a Time

The vicious murder of university student and environmental activist Juan Francisco Duran Ayala earlier this month has stunned community members in the Cabanas region of El Salvador and beyond. Ayala is the fourth anti-mining activist from the Cabanas region to be killed in the past two years as growing community opposition to gold mining projects has been met with violence. Community groups, international NGOs and political leaders are calling for a thorough investigation into the material and intellectual authors of these murders.

This recent tragedy has brought renewed attention to the local conflicts erupting throughout Latin America - from Peru to Mexico - regarding oil, mineral and gas extraction projects and their effects on the local environment.

And in recent years, many of these companies have gained new powerful foreign investor rights via so-called "free trade agreements" (FTAs) and bilateral investment treaties (BITs) that allow them to legally bulldoze through local community opposition and even to shape environmental policies in order to make sure their projects move forward. There are approximately 32 such investor cases launched by extractive industry
companies pending before the International Centre for Settlment of Disputes (ICSID) for hundreds of millions of dollars.

Over the weekend, the New York Times published a top story on this exploitation as it unfolds in El Salvador. As local and nation-wide opposition to precious-metals mining began to gain momentum in 2009, Canadian mining company  Pacific Rim Mining Corp. launched a case against El Salvador under the Central American Free Trade Agreement through a U.S. subsidiary.

The company is using CAFTA to challenge El Salvador's environmental policies and is seeking over $100 million in damages for allegedly not being given the green light to begin operating its "El Dorado" mine in the Cabanas region (the Salvadoran government argues the company did not complete the permitting process). The case is currently being heard before a World Bank tribunal in Washington, DC.

Although investment cases like these represent one of the most alarming institutional shifts in power between the public and corporations in decades (if not generations), the NYT, to our knowledge, has only written a total of three articles that explore the issue in any depth (including the one referenced above and here and here).

Hopefully in the weeks leading up to Congressional votes on new FTAs which will empower thousands of  companies with rights to seek compensation for state and federal policies in the U.S., Korea, Colombia and Panama, the NYT and other media outlets will delve more deeply into how these investor rights are already playing out in communities across the Americas.

Corporations push for WTO attack on green jobs

The Obama adminsitration is deliberating whether to get involved in a WTO attack on Canada's green jobs program, according to today's Inside U.S. Trade.

Last September, Japan announced that it would be challenging the Canadian province of Ontario's renewable energy program. As IUT reports:

The Ontario program, known as a "feed-in tariff" (FIT), enables producers of wind and solar energy to sell that electricity into the Ontario grid at a higher rate than what the government regulator offers for conventional energy. That higher rate can be up to six times greater than the rate for conventional energy, sources said.

However, producers can only qualify for the program if they use specific amount of Ontario goods and services in establishing that renewable capacity. The domestic content requirement for projects that entered commercial operation in 2010 was 50 percent, and that increased to 60 percent in 2011, sources said.

The U.S. solar industry source contrasted this with "buy local" elements in the U.S. state and local green energy initiatives, which include a FIT program in Washington state and other renewable energy incentive programs in Massachusetts and Michigan.

Unlike the Ontario measure, these programs do not condition participation in the program on the use of domestic content. Instead, these U.S. programs allow both domestic and foreign producers to participate, but offer a small bonus for firms that use domestic content, the source said.

The source argued that this added bonus is not significant enough to affect the competitiveness of firms that do not source locally. The Ontario program, by contrast, completely excludes companies that do not produce a significant part of their product in the province, this source said.

While highlighting the differences between the U.S. and Canadian programs, this source made it clear that the U.S. solar industry opposes any type of local content requirement, and supports an initiative proposed among Asia-Pacific Economic Cooperation countries to phase out such requirements in the green energy sector.

This source acknowledged that U.S. state and local programs that provide a bonus for firms that source locally may also violate WTO rules, but suggested that these programs are not commercially significant.

In other words, Buy Local programs are fine, so long as they're not effective. Once green jobs policies start actually accomplish their goal of incentivizing local production (i.e. meaning something), that's when we launch a WTO attack.

As the sources cited by IUT note, multinational corporations aren't so much worried about the economic impact of a single green jobs program in a single Canadian province.

Instead, they appear to be worried that the program will set an example that will inspire other nations, states and localities to take comparable action. In other words, Ontario's FIT could have a positive demonstration effect by showing people that you can work together to democratically determine alternatives to the decimation of manufacturing jobs and our climate.

Under WTO rules, third countries can join a WTO attack initiated by another country. The good news (or what passes for good political news in the current climate) is that Obama's trade officials worry that, if they join the attack, it could boomerang and affect U.S. green jobs programs.

The bad news is that they are even having this discussion. Why take the side of solar panel companies that are apparently worried that they don't support enough local jobs to qualify? At a time when long distance shipping is contributing massively to global warming, it seems irresponsible not to look for ways to incentivize firms to produce, and purchase, locally.

Comparing apples to bloody oranges

Corporate interests have been going into overdrive pushing the flawed NAFTA-style deals with Colombia, Panama and Korea. As we've documented before, a lot of the statistics that they bandy about as support for their position are misleading, incomplete, or makes apples-to-oranges comparisons.

It's one thing when these statistics have to do with economic accounting abstractions like export values: the argument could be wrong, but it doesn't hit you on an emotional level.

Not so with the latest deeply offensive talking point from the Heritage Foundation and the Cato Institute, now being cited by Gary Shapiro of the Consumer Electronics Association, who writes:

The battle over free trade has taken a crass -- and dishonest -- turn thanks to an ad campaign run by the AFL-CIO which suggests a free trade agreement between the United States and Colombia is "about murder" of Colombian labor organizers. The ad, which features a coffin, applauds the "brave union leaders" of Colombia who are lobbying Congress to reject the proposed agreement. The AFL-CIO claims that to approve the FTA would be to condone the murders of union leaders in Colombia.

What's the ads don't mention is that the Colombian union leaders visiting Washington this week are in more danger here than in their home country. In fact, according to statistics cited by the Heritage Foundation, the murder rate in Washington is 33.4 per 100,000 inhabitants, compared to the 5.3 for Colombian unionists.

I can't remember the last time I read anything so callous or tone deaf. The reason that labor, faith and human rights groups have highlighted the Colombian unionist assasination numbers is because many if not all of these murders in Colombia occur because of the unionists' activities.

The D.C. murder rate is heartbreaking. But how many of these murders occur because someone is attempting to exercise their union rights? Zero. That's the relevant comparison.

Murder rates in D.C. - as across most of the U.S. - are driven largely by economic factors and include the failed war on drugs (and the competition between private individuals over drug turf.)

Unionist murders in Colombia are, by contrast, political, and are often carried out with state complicity.

Two closing thoughts.

First, the plan that the Obama administration is pushing does not require an end to these murders before the pact go into place. That is a tragedy and missed opportunity.

Second, much as employment and competition in the illegal drug sector drive DC's murder rate, the Colombian government's own studies predict an exacerbation of such problems in Colombia if the FTA is implemented. Given the rural displacement and further impoverishment the Colombia FTA is projected to cause, the Colombian Ministry of Agriculture concluded that the FTA would give small farmers little choice but “migration to the cities or other countries (especially the United States), working in drug cultivation zones, or affiliating with illegal armed groups.”

In sum, while the Colombia FTA does not require Colombia's unionist murder rate to come down to the zero rate of Washington, D.C., it may in fact drive Colombia's overall (non-unionist) murder rate up to Washington, D.C. levels.

U.S. dolphin-safe tuna labeling rule deemed a WTO violation

One of the environmental movement's greatest achievements has been the passage of legislation that protects dolphins from being slaughtered.

Now, U.S. dolphin protection rules have gotten slammed yet again by the WTO. GATT-zilla versus Flipper Take One Zillion: flipper goes down to defeat one more time.

We'll take you through some of the history of this battle. Worryingly, the WTO found that even purely voluntary labeling convention like the U.S. "do lphin safe" labels could be deemed mandatory (and thus give rise to a WTO violation) if they impeded non-labeled tuna's "marketing opportunities in the United States." In other words, even private consumer preferences for dolphin-safe tuna can lead to a WTO violation. This could cast a real chill on voluntary labeling practices, which a lot of supporters of free trade are in favor of.

Moreover, the Obama administration did not appear to even use all possible defenses to fight against this attack.

As Inside U.S. Trade reported today,

In a confidential interim report circulated to the United States and Mexico earlier this month, a World Trade Organization panel found that U.S. labeling requirements that preclude many Mexican tuna exports from receiving a "dolphin safe" label in the United States violate international trade rules, according to informed sources.

The interim panel report found that the U.S. requirements violate Article 2.2 of the WTO's Agreement on Technical Barriers to Trade (TBT). That article forbids WTO members from implementing "technical regulations" that are "more trade-restrictive than necessary to fulfill a legitimate objective."

The case is likely to go to the Appellate Body of the WTO. But, assuming the initial WTO panel was correctly applying the WTO's anti-environmental, pro-corporate trade rules, the U.S. will have to (again) water down its dolphin protection policies or face trade sanctions.

This case has a long and sordid history, as we documented all the way back in 2000:

Fair trader wins in Peru... again. Will US respect the outcome?

Peruvian presidential candidate Ollanta Humala, long a critic of the NAFTA-style US-Peru trade agreement, has won nearly 32 percent of the vote in the first round of voting. This marks the second time Humala has come in first in the first round: in 2006, he won nearly 31 percent of the vote.

Yesterday, Humala's partner on the ticket told reporters that Humala will determine whether past FTAs are compatible with the national interest. Humala's economic team has blasted the U.S. FTA for being between unequal trading partners.

In contrast, former president Alejandro Toledo and vice president Pedro Pablo Kuczynski - who pushed and continue to push the FTA - finished far behind.

Keiko Fujimori, the former president Alberto's daughter, came in second to Humala, and will face him in the run-off election. She has stated that she supports the U.S.-Peru FTA.

As WOLA reports from on the ground in Peru, much is uncertain the weeks ahead. And although many voters remain suspicious of Humala, "he was the only candidate to offer an alternative to the existing economic model, in a country where a significant portion of the population has not benefited from years of steady economic growth."

Now, it is incumbent on U.S. corporations, the Obama administration in the US and the Chavez administration in Venezuela to stay out of the second round of voting, which is set to occur on June 5. Peru is divided enough without all the outside interventions, and U.S. trade policy has been aggravating these divides rather than leading to healing. See here and here.

After the jump, we have a chronology of the outside interventions in Peru's last presidential election. We detail how the Bush II administration pushed through the FTA after Peru's voters had supported two candidates that were pro-fair trade. One of the fair trade candidates, Alan Garcia, had an eleventh hour conversion to support for the FTA, after being courted by Peruvian and international elites.

Wisconsin, Korea, and the attack on working families

Working families are under attack by state legislatures nationwide - and the last thing we need is more anti-worker, job-killing trade policy at the federal level. But it looks like that's just what we'll get - unless we draw a line in the sand now and stop the Korea trade deal. It's time to fight back - and to raise fair globalization as part of our vision of a just and sustainable economy.

It's all part of the same problem. They cut taxes for corporations and let them write the rules of the global economy to shift production to where the taxes are the lowest, and worker rights and environmental protections are the weakest. When we don't have any tax revenue left because the corporations (and jobs) have left for overseas or blackmailed their way to criminally low tax rates, they try to balance budgets on the backs of working families. They cut essential services and are now even trying to take our rights. If jobs stayed here in the first place, we wouldn't' be in this mess.

It's what Leo Gerard of the Steelworkers union calls a "revenue problem". We can't let it go unchecked.
 
We need to fight back - and to raise the need for fair globalization policies as part of our vision of a just and sustainable economy where workers rights are upheld as sacred.

Cola Wars Beat Drug Wars

The award in agribusiness giant Cargill's NAFTA investor-state attack on Mexico's jobs program was published last week.

The short version: a tribunal of three unelected judges determined that Mexico's efforts to save or create jobs for campesinos in the sugar sector were a violation of NAFTA. Mexico's taxpayers were ordered to cough up over $77 million plus interest, all the judges' and court fees, and to even pay Cargill $2 million for Cargill's own lawyers' costs.

Here's the longer version:

For years, large agribusiness groups have been pushing the use of high fructose corn syrup in soda drinks, despite concerns about the environmental and public health impact. Not only is HFCS opposed on health grounds, it's also opposed by some foodies on taste grounds: witness the growing demand for Mexican Coca Cola, much of which is made with sugar and is said to therefore taste better.

By the late 1990s, Mexico had a whole lot of excess sugar in its market that it hoped to be able to export to the U.S.This pile-up was driving down prices and hurting Mexico's farmers, who were generally getting battered by NAFTA-style rules and in turn driving displacement into drug trafficking or immigration, as President Obama himself noted during the campaign.

A Bad Deal for Everyone

I was in Seoul this week during the lead-up to the G-20 and the Obama-Lee announcement that the Bush Korea-US (known as KORUS in South Korea) FTA is thankfully still deadlocked.

Before my trip to Seoul this week, the reasons for the American public's opposition to the NAFTA-style trade model were fairly clear to me. After all, it's a big ask for the American public to support more of the same job-killing brand of trade agreement in the midst of an economic crisis even after President Obama campaigned on promises of reform. 

However, for all of the accusations of self-interested protectionism lobbed at Americans who are critical of this model, one would think that Koreans were clamoring for the completion of the Korea-US FTA.

Much to the contrary - this week unionists, farmers, peasants, and students filled the streets of Seoul daily and nightly to their outrage/dispair with the agreement. From marches, to candle light vigils, to actions outside of the parliament, Koreans made it clear that the current agreement is unacceptable, as are the proposed solely commercial modifications.

Koreans expressed anger about various aspects of the agreement - the potentially crippling effects on Korean farming and the 30% self-employed 'mom and pop' establishments; new rights KORUS gives to about 1,000 U.S. corporations to challenge Korean subfederal and federal laws in private tribunals; opening the floodgates to U.S.-style financial deregulation. Americans and Koreans actually share a sizeable amount of common ground in their criticisms of the current KORUS FTA.

The Korean public's outrage about the KORUS FTA is unlikely to cool down anytime soon. The question is whether or not President Obama will seize this opportunity to follow through on his campaign promises to reform the Bush trade model and deliver a trade agreement that both Americans and Koreans can support.

 

Candidates of color running and winning on fair trade

Anytime you force an ad-man to compress a difficult policy problem into a 30-second soundbyte, you're going to lose some complexity.

That's why I was surprised at the push back on politicians on so-called "China bashing." (See for instance, Reihan Salam here, and Matt Yglesias here.)

I watched about 800 political ads for the 2010 cycle, and most of the China-related ads I that I saw were not bashing Chinese people - they're bashing unfair trade deals and policies, voted on in Washington, that had the effect of offshoring jobs to other countries. In other words, the reason things aren't made in America is because of policies that were. You can see the full pantheon of ads and analysis in our new report here.)

For what it's worth, candidates of color (including a number of South Indian Americans and Asian Americans) in both parties have launched some of the strongest attacks on job offshoring this election cycle.

This includes Rep. David Wu (D-Ore.) in Portland, who bears the distinction not only of being an Asian-American campaigning for fair trade, but also a Democrat showing that you can campaign and win on fair trade in the Pacific Northwest, where the (incorrect) conventional wisdom is that this message doesn't play.

Democrats and Indian-Americans Manan Trivedi in Pennsylvania and Raj Goyle in Kansas also posted credible showings in GOP-leaning districts. Both campaigned extensively on fair trade themes. As an NPR column argued:

The trick for these candidates is to never let voters forget you are running to represent Sacramento, or Wichita - not Bangalore.

Raj Goyle does this by campaigning very hard on fighting outsourcing of Kansas jobs.  Ami Bera agrees, "we have to keep those jobs here because we have over 12 percent unemployment."

(Bera ran in against Dan Lungren in California.)

In Hawaii, Democratic candidate Colleen Hanabusa criticized job offshoring in paid television ads, and was successful in her effort to unseat GOP incumbent Charles Djou, who ran the campaign's only television ad in favor of the Korea FTA. Both candidates are Asian American.

Democrat and Congressional Hispanic Caucus member Loretta Sanchez fought back a challenge from Vietnamese-American GOP candidate Van Tran in this heavily Latino and Asian district. She campaigned against unfair trade with Vietnam, and against other anti-worker trade deals.

In Louisiana, African-American candidate Cedric Richmond beat Vietnamese-American GOP incumbent Anh Cao. Richmond ran paid television ads against unfair trade deals, while Cao attacked unfair trade with Vietnam (even though he had supported the Bush-initiated Trans-Pacific Partnership while in office).

In Georgia, Democratic incumbent and African-American Sanford Bishop won re-election in his majority White-American, deep South district, and ran paid television ads attacking NAFTA and China trade policy. (Bishop has had complicated trade policy history - voting for the WTO and China's entry into it, while voting against NAFTA and cosponsoring the fair trade TRADE Act.) Meanwhile, his fellow Democratic incumbent Jim Marshall did not campaign on his fair trade record, and lost to Austin Scott, a Republican that emphasized Buy America themes. (Both Marshall and Scott are white.)

Ryan Frazier, an African-American GOP candidate in Colorado, criticized the fact that the stimulus bill was not used to buy only U.S.-made goods. Allen West, an African-American GOP candidate in Florida, criticized the job offshoring impact of cap-and-trade. Their Democratic opponents approached these candidates in different ways: Ed Perlmutter in Colorado ran anti-offshoring ads of his own and won, while Ron Klein in Florida was mum on trade and lost.

And Latino voters in California and Nevada strongly backed Democratic Senate incumbents Barbara Boxer and Harry Reid, who both campaigned against policies that send jobs to Mexico and other countries.

Finally, 75 percent of the Congressional Black Caucus, nearly half of the Congressional Hispanic Caucus, and Asian-American members like Reps. Mazie Hirono (D-Hawaii) and Judy Chu (D-Calif.) have endorsed the TRADE Act, which simultaneously pushes for good jobs here at home, while prioritizing stronger environmental justice, workers rights and democratic protections for our trading partners. Not to mention a fellow named Barack Obama, who also campaigned and won on these themes - winning not only communities of color but making serious inroads into the white working class.

In sum, elected officials don't seem to have much difficulty reconciling justice for communities of color at home and abroad with a strong working class message of standing up for job creation in the United States. They know as well as anyone what my colleagues John Schmitt and Nicole Woo (and other CEPR folks) have found: that the quality of manufacturing and other jobs here at home is a major reason that families from Asian-Pacific, African-American and Latino-American communities have ascended to the middle class.

Lords of Economics Act Uneconomically

How much would you be willing to spend on security costs to avoid (in a worst case scenario) $3 million in property damage? Rationally, it would seem like anything up to $3 million is about right, maybe a touch more if there's some sort of compelling argument of a deterrent effect.

According to the New York Times, Canada was willing to spend nearly $897 billion million for the G-20 Summit, which of course comes out of Canadian taxpayer funds. Tax property to save property, in other words, to the tune of a deficit of $894 million in the "property protection" balance.

Here's the Times:

Few Canadians expected that hosting world leaders at back-to-back summit meetings here this weekend would be cheap or convenient. With downtown Toronto a security maze, businesses boarded up and even the beloved Blue Jays baseball team sent packing, the meetings have met all expectations for aggravation.

But it is the cost of providing security that has elicited gasps.

The latest government estimate is $897 million for three days of summitry. That comes to about $12 million per hour, or a total near what the government spends per year in the war in Afghanistan...

Ever since the infamous Battle in Seattle, the World Trade Organization summit meeting in 1999 in which violent street protests led to 600 arrests and $3 million in property damage, security has been a prime concern for international summit meetings. 

As far as I know, the broken Starbucks windows and spraypaint in Seattle were the worst property damage in a U.S. global justice protest. Since that time, it's been an escalating war of expenditure to see which locality hosting a Summit can spend the most on Robo Cop uniforms and fancy gadgets. (And, as the Times reports with respect to Canada's G-20 summit, all the Robocoppery didn't even have a deterrent effect, and didn't keep property from being damaged.)

Meanwhile, economics ministers are forgetting everything they know about macroeconomics and getting out of economic downturns, and are turning to cutting social spending. As Paul Krugman writes, this could be paving the way for a Third Great Depression.

The lords of economics ain't so economical.

CAFTA Case Challenges Mining Laws

Earlier this week, an arbitration panel at the World Bank heard the first round arguments of the first environmental case under the investor-to-state arbitration mechanism of the Central America Free Trade Agreement (CAFTA) to date.  The case stems from Pacific Rim’s bid to establish a gold mine in the basin of El Salvador's largest river, Rio Lempa.  Pacific Rim planned to use hundreds of tons of cyanide and hundreds of millions of liters of water per year to recover the gold from the ore, threatening the water resources that thousands of people rely upon.  

Initially Pacific Rim possessed a permit to conduct exploration activities near Rio Lempa, but regulations required it to submit a feasibility study and gain government approval before it could begin actual exploitation of the mine.  Although Pacific Rim applied for an exploitation permit, it failed to submit the feasibility study.  In the face of growing opposition, Pacific Rim

never completed a feasibility study necessary to obtain an exploitation permit for its mine and the government did not issue the exploitation permit.

In December 2008, Pacific Rim formally launched a CAFTA claim for hundreds of millions of dollars in compensation, claiming that El Salvador’s actions constituted discriminatory treatment and expropriation of its investment.  CAFTA’s investor-to-state dispute settlement provision is very similar to NAFTA’s investor-to-state provision in which foreign corporations can claim damages if a government action, including environmental regulations, constitutes expropriation of an investment or discriminatory treatment. Under NAFTA, several environmental and public interest laws have been challenged in the United States, Canada, and Mexico (see our page on these cases here for more info).  It seems that trade negotiators did not learn the lesson from NAFTA and included this investor-state provision in CAFTA, opening the door to outrageous challenges to essential environmental laws like we now see in the Pacific Rim case.

On Monday and Tuesday the tribunal at the World Bank heard Pacific Rim and El Salvador wrangle over El Salvador’s preliminary objections to the case proceeding. Lawyers for El Salvador argued that El Salvador was properly following its own mining laws and that these laws apply equally to all mining companies so they cannot be discriminatory.  Lawyers for Pacific Rim, on the other hand, mostly argued procedural questions.  The arbitration panel is expected to render its decision by August 2^nd, at which point either the case will be dismissed or hearings on jurisdiction and standing will proceed. A video of the hearings can be viewed here.

You can take action to ask President Obama to exclude these investor-to-state arbitration provisions from future trade agreements here.

A Year After Implementation of Peru Free Trade Agreement, U.S. and Peru Left with Broken Promises, No New Trade Model

Public Citizen Report Details Decline in Peru’s Labor and Environmental Conditions

On the one-year anniversary of the implementation of the U.S.-Peru Free Trade Agreement (FTA), it has become clear that the hopes and predictions of proponents of the trade deal have failed to materialize, Public Citizen said today. Instead, as critics of the deal had feared, environmental and labor conditions in Peru have deteriorated rapidly since the congressional passage of the FTA in late 2007 and implementation in early 2009. In a brief report released today, Public Citizen outlines some of the broken promises and labor and environmental problems.

The Peru FTA text included several reforms with respect to labor and environmental standards relative to the normal Bush trade pact model, which was based on the North American Free Trade Agreement (NAFTA) and the Central America Free Trade Agreement (CAFTA). These changes were added following a May 2007 deal between the Bush administration and some congressional Democrats.

Despite the revised environmental language, the Peruvian government rolled back environmental protections existing prior to the FTA so as to implement the FTA’s foreign investor rights to access forestry, mining and other natural resource concessions. This included access to sensitive Amazonian territories over which indigenous communities had control under pre-FTA Peruvian law. In response to indigenous opposition, including road blocks in the remote northern Amazonia region of Bagua, the Peruvian government dispatched the military, and the resulting confrontation resulted in 34 fatalities – making the Peru FTA the first U.S. trade agreement to result in an immediate body count. 

Despite the revised labor language, in Peru today under the FTA, Peruvian employers can use subcontracting and outsourcing legal loopholes that greatly limit workers’ ability to unionize; child labor and forced labor continue unabated.

“The initial outcomes of the Peru FTA’s implementation demonstrate that major reforms remain to be undertaken if a new American trade agreement model is to be created that can deliver broad benefits to people in the countries involved while protecting the environment,” said Lori Wallach, director of Public Citizen’s Global Trade Watch division.

Starting in 2008, the U.S. House Committee on Ways and Means Chairman Charlie Rangel (D-N.Y.) and Trade Subcommitee Chair Sandy Levin (D-Mich.) protested the Bush administration authorizing the FTA to go into effect despite the García administration failing to implement key labor and environmental reform commitments. A January 2009 letter from Rangel and Levin to Bush U.S. Trade Representative Susan Schwab noted that the García administration adopted new loopholes that could allow enhanced use of company subcontracting to crush unionization drives.

The Peruvian government’s true intentions became clear at a U.S. Chamber of Commerce victory event the
day the Peru FTA was signed into law, when Peruvian President Alan García told the audience of lobbyists for U.S. multinationals: “Come and open your factories in my country so we can sell your own products back to the U.S.” (U.S. Chamber Magazine, December 2007. Accessed July 13, 2009.)

Recent comments filed by unions and other civil society groups concerning the administration’s proposal to initiate Trans-Pacific Partnership (TPP) agreement negotiations focus strongly on the need for major reforms to be made to the trade agreement model used for the Peru FTA. TPP talks, which would include Peru, would provide the Obama administration with the opportunity to implement the president’s trade reform campaign commitments that included the issues unaddressed in the May 2007 deal, and to replace the current damaging Peru FTA text with a new trade pact model.

Read the full report here.

Bringing home the Battle in Seattle

Recently, we told you about our WTO Turnaround campaign – an effort urging President Obama to turn around the WTO’s failed policies. Starting this week as part of that campaign, in retirement communities and universities, at birthday parties and union halls, activists across the country will be holding special WTO Turnaround House Parties to celebrate the 10th anniversary of the Seattle protests where 50,000 activists took to the streets of Seattle and shut down the WTO.

The House Parties include showing a bonus special edition DVD of the feature film Battle in Seattle with exciting Seattle protest footage and a short new documentary we helped the Steelworkers produce about the protests and ongoing efforts to turnaround the WTO.

If you think you can pull together 10 or more of your friends and family, coworkers, church group, or classmates for a house party or screening, let us know and we’ll send you the DVD. We’ll also get you an activist tool kit with postcards to the president so that your friends and neighbors can remind President Obama about his trade reform commitments and the incredible citizen victory that happened in Seattle 10 years ago. We think that anyone, from the students, family farmers, unionists, and tree-sitters who rallied in Seattle in ’99 to all of those who wished they were there, won’t want to miss this DVD.  Click here for more info.

Re-regulating Finance Starts Now

Yesterday, Public Citizen and a wide variety of other consumer and labor groups kicked off the Americans for Financial Reform coalition. Our mission?

For too long, the rules of Wall Street have been written by the bankers themselves.

This year, that has to change.

Americans for Financial Reform is a coalition of nearly 200 national, state and local consumer, employee, investor, community and civil rights organizations that have come together to spearhead a campaign for real reform in our banking and financial system.

We're circulating a petition to restore transparency, oversight, and fairness to the financial marketplace. Take action here!

One of the principles of the coalition is that International institutions, from trade pacts to development banks and others, should provide a regulatory floor, not impose a regulatory ceiling. (You can read our issues brief on that matter here.) Expect to see more from us about how we can reform trade, investment and financial pacts to promote prosperity and security!

Pacific Rim Uses CAFTA to take on Mining Regs in El Salvador

Canadian mining company Pacific Rim Corp. has responded to grassroots efforts against its proposed mining project in El Salvador by filing a CAFTA investor suit against the Salvadoran government.  

Communities in northern El Salvador, worried about the environmental impacts of proposed mining projects, campaigned vigorously along with environmental, religious and human rights organizations to hault what would be El Salvador's first large-scale mine in 70 years. They were successful in convincing President Tony Saca to rethink issuing the permit for Pacific Rim's El Dorado mine.

The Miami Herald explains:

President Saca fears mining would cause cyanide contamination of water much in the way it did in the 1950s at the El Dorado mine, the same underground mine in the eastern region of Cabañas which Pacific Rim wants to reopen and expand.

''I won't give any mining exploitation permits because mining is definitively harmful,'' Saca said.

Saca's position has been echoed by his successor, president-elect Mauricio Funes, whose left-wing FMLN party ended 20 years of right-wing rule with their victory in the March elections. Funes will officially take power in June.

El Salvador is not alone in choosing to preserve natural resources over mining projects that do not bring long-term employment and whose profits will flow out of the country. And Pacific Rim is not alone in using NAFTA or CAFTA investor rights to challenge local decisions over mining. The United States is currently fending off a $50 million NAFTA investment suit over California's mining regulations.

Although Pacific Rim is a Canadian company that shouldn't even be eligible to utilize investor rights under CAFTA (an agreement between the United States and five Central American countries), they have found a way around this problem. Pacific Rim Mining Corp. will bring this investment suit through its Nevadan subsidiary, Pac Rim Cayman LLC! As with all NAFTA and CAFTA investor-state cases, the case will be decided outside of domestic courts by a panel of arbitrators.

And all this talk of a Panama FTA, which contains the same kind of investor rights found in NAFTA and CAFTA could makes matters much worse. Panama is home to an estimated 350,000 subsidiaries of foreign mulinational companies. Just as Canadian company Pacific Rim used its Nevadan subsidiary to file a CAFTA investor suit against El Salvador, so could any of the 350,000 parent companies use their Panamanian subsidiaries to take the United States government to task over environmental and other public interest regulations.

I told you so

The NYT features its perennial snide profile of global-justice activists, although this time with a bit of a vindication of their arguments.

The annual meetings of the World Bank, I.M.F. and G-7 finance ministers typically do not carry with them much in the way of urgency. The script is usually so familiar that the Washington police know it by heart: finance ministers arrive in their limos and stake out their tables at the city’s best restaurants; free-market protestors dressed like Mutant Ninja Turtles kick up a ruckus in a tiny triangular patch of park across from World Bank headquarters; a few of the protesters get arrested trying to enter the building; and the news media, and the rest of the city, largely ignore the event.

A steady refrain from the protesters has been that more economic nationalism is needed, both to protect the poor and to prevent big corporations from robbing smaller countries of wealth. They have argued that more regulation is needed to keep big business in check, and have derided free markets as benefiting only a narrow swath of society.

Typically at World Bank meetings, officials grouse about the misguided protesters. This year, things are a little different. “There’s no question the Washington consensus is dead,” one senior World Bank official said, requesting anonymity because he was not authorized to speak publicly to a reporter. He said he was referring to “the free-market consensus,” adding that at the World Bank, the push toward deregulation and unfettered free markets “died at the time of the $700 billion  bailout.”

Offshoring of Child Care Reaches New Heights

The Onion gives satirical coverage to the offshoring of health care debate. (HT to Ben Muse.)

Can we even remember what democracy looks like?

American Prospector Ezra Klein reviews the "Battle in Seattle" over at the Guardian website. Along with a quote from Stuart Townsend that shouts us out, here are some highlights from Ezra's take on the movie:

Of the fissures running through the American left, the deepest, and most impenetrable, is probably trade... It's a complicated issue. But you wouldn't know it from Stuart Townsend's new film, Battle in Seattle. ... It is, in Townsend's telling, a seminal moment in political history. It's just not clear why.

The core of the movie is the protesters. But the core of the protesters proves curiously hollow. ... At no point does any character explain the problems with the World Trade Organisation, or detail their vision for a better world or give a reason for their presence that doesn't sound like the sort of thing you'd say to get laid at a protest rally. If Townsend's point was that protest is a form of superficial self-definition rather than an actual engagement with the issues at hand, then, point well made. But I don't think that was his point...

Toward the end of the film, Django and Jay are sitting in jail. Trying to cheer up his friend, Django leans over. "Look man, a week ago nobody knew what the WTO was!" Then he considers the statement. "Actually, they still don't know what it is! But at least they know it's bad." Having thus articulated the movie's thesis, they both laugh.

It continues to be revealing to me that the best reviews the movie has gotten were from people active in the global-justice movement and from journalists that actually covered the protests, including from the typically pro-corporate trade Seattle papers. Is this motivated by the narcissism of seeing ourselves depicted on the big screen? Maybe in part. But I think there's more to it than that.

Stuart took a big risk in depicting recent history. As an artistic matter, BIS is one of a crop of recent movies set in the 1990s, along with "The Wackness" and "Recount," about the 2000 election. The Seattle protests were the culmination of a decade of Clintonism, where the left was paid short shrift when it wasn't thrown directly under the bus. Meanwhile, corporations like Citigroup and Wal-Mart ruled D.C. (still do), pushing the creation of new commercial institutions and instruments that required a law degree to understand.

Middle-class left activists groomed in the late 1990s drew more inspiration from tree-sitters and direct action than the debating salons of the Ivy League, or their modern-day equivalent: political blogs run largely by Ivy Leaguers. Watch Recount and Battle in Seattle right next to each other: you'll see, on the one side, a Democratic Party that had forgotten how to fight (personified by Warren Christopher) and, on the other side, the cry of the excluded. My reaction to the depiction of Christopher is probably akin to the many centrist movie reviewers when they saw BIS: retching at the all-too familiar stench of players on the other side of a political divide.

One Way that Uribe is Better than Bush

Doug Palmer from Reuters reports:

President George W. Bush is moving to suspend longtime U.S. trade benefits for Bolivia because of that country's failure to cooperate in drug-fighting efforts in the past year, the top U.S. trade official said on Friday.

The move reflects the increasingly strained relations between the United States and Bolivia under the leadership of Bolivian President Evo Morales.

"The Morales administration's recent actions related to narcotics cooperation are not those of a partner and are not consistent with the rules of these programs," U.S. Trade Representative Susan Schwab said in a statement.

Unfortunately, as CEPR has shown, the Bush administration has all but undermined ANY U.S. government presence in Bolivia by taking sides in the country's internal political debates, and has even politicized institutions like the Peace Corps, which is supposed to be a non-political channel for U.S. kids to do some good around the world. Way to go, W!

Moreover...

"In South America there was unanimous and very strong support for the government. Other countries from the region, left, right and center, don't see the opposition as having a legitimate grievance," said Mark Weisbrot, head of the Washington-based Center for Economic and Policy Research.

Even Colombia's Uribe is backing Evo! What gives, Georgie?

From Blockbusterization to Bustamoverization

Wow. Direct action has gone so mainstream that even former VP Al Gore is calling for it. According to the NYT:

“If you’re a young person looking at the future of this planet and looking at what is being done right now, and not done, I believe we have reached the stage where it is time for civil disobedience to prevent the construction of new coal plants that do not have carbon capture and sequestration,” he said at the third annual meeting of former President Bill Clinton’s initiative, which arranges partnerships between the very rich and the very needy.

In a related note, I took in Stuart Townsend's "Battle in Seattle" last Friday night here in DC, after years of anticipation and weeks of positive and negative critical reviews. (And it's opening in a ton of new cities this weekend.) Mark Weisbrot fairly captured the movie in his recent column:

Perhaps most unusual for a feature film, it gives the protesters credit for what they accomplished: they changed the debate over what has been deceptively marketed as “free trade.” They were beaten and jailed, choked with tear gas and shot with rubber bullets, but they succeeded in raising awareness about what these organizations and international agreements really do.

The movie also captures the instances of both tension and cooperation between diverse tactics, such as insider lobbying, "Yes Men" style infiltration, outsider direct action, and even property destruction. Stuart could have put a seal of approval on any one of these methods, but he holds back. Would an obscure international commercial agency like the WTO have received attention if thousands of people hadn't put their bodies on the line, if there hadn't been broken Starbucks windows? Is negative attention better than no attention? You'll just have to make up your own mind.

There were some puzzling reviews of the movie. The Washington Post, for instance, chided the movie for not focusing on telling us enough about the WTO, but then also for giving insufficient attention to character development. On the third hand, other reviews slammed the movie for giving us too much character backstory.

Huh, what? A drama that discusses in rapid but significant detail issues like the WTO sea turtle case and the TRIPS agreement does not tell us enough about policy? Well, if you insist, I could put on a tweed jacket and a top hat and tape myself speaking into a handheld camera about the base and growth of export trends to Bahrain. I could even put some wicked Manu Chao tracks over it. But, judging from my wife's glazed over eyes anytime I get into that level of detail (and she's a flippin' economist), I'm betting there's a pretty limited audience at best for greater detail into the issues that Stuart generously provides.

The charge of insufficient character development also rings untrue. I have worked, partied, supped, dated, and studied with people in the global justice movement for over a decade. With very few missteps, Stuart captures almost exactly the personality of the median activist: earnest to a fault, a little weak on understanding of (class, establishment, etc.) politics and details, occasionally fruity in their interpersonal relations, unable to compartamentalize different parts of their life, but mostly absolutely devoted to making this world a better place. There are outliers of course, who try to get the rest of the movement to take class politics and/or fun more seriously, but there's a reason that they have to write books to make their point.

Think activists wouldn't say "icons of violence"? Tell that to the kid that handed me a flyer slamming the movie for being a "Blockbusterization of Reality." This ain't agitprop, it's a mostly loyal reading of the cohort of people who made Battle in Seattle happen. And for better or worse, it celebrates both our past accomplishments and the real challenges we face in growing the movement and making it as effective as possible in 2008.

GJ Euros Rocking the Party, and the Booze

The French global justice movement is shaking up the electoral picture. Here from the NYT:

Olivier Besancenot, 34, is the extremely adept leader of the hard French left, a beacon for disaffected young members of the Socialist Party and the remnants of the once-powerful Communists. Having already run twice for the French presidency, and as an articulate presence on news and talk shows, Mr. Besancenot has higher favorability ratings in some polls than established politicians like Ségolène Royal, the Socialist Party presidential candidate who lost last year to the conservative Nicolas Sarkozy...

So he is trying to gather other small, left-wing parties into a new grouping: the New Anti-Capitalist Party, which is intended to provide an umbrella voting list for those unhappy with the impact of capitalism and globalization on the poor, the environment, the third and fourth worlds, and on the rights of women and homosexuals. The new party intends to run in the elections for the European Parliament next June.

“We aren’t soldier-monks,” he said. “We are the exploited, oppressed, the young and the salaried, who don’t whine but want to be respected — and for that, at some point, we lift our heads through engagement.”

Ahh, France. Like Berkley, except bigger!

And don't think the struggle is only at the ballot box. The German global justice movement helping out a party of a hoppier kind. Again from the NYT:

Beer from the state-owned brewery here deep in the Black Forest, founded as part of the St. Blasien monastery in 1791, has grown into a surprise hit in big cities around the country, and nowhere more so than in Berlin. Rothaus has managed to thrive in an era dominated by multinational beverage concerns, on little more than crisp beer and its quaint, old-fashioned image...

Every once in a while, a product captures the zeitgeist of a nation. Rothaus’s quirks — its famous brown bottles of Pilsener are known as Tannenzäpfle, or “little fir cones” — and even the fact that it is wholly owned by the state of Baden-Württemberg, lends it a sense of homeyness in a rootless era.

That, in turn, has given it credibility with the anti-corporate, anti-globalization crowd. In Germany, where unrestrained capitalism is viewed with deep mistrust and populism is on the upswing, that is not such a small audience.

“It has to do with tradition. They haven’t sold out,” said Basti Wisbar, 31, a bartender at Waldohreule, a bar in the trendy but traditionally counterculture neighborhood of Kreuzberg in Berlin. “I could never identify myself with a beer like Beck’s,” said Mr. Wisbar, referring to Germany’s top export, which belongs to the Belgian mega-brewer InBev, which  bought Anheuser-Busch over the summer for $52 billion.

Use your Freedom of Choice: See Battle in Seattle

The Battle in Seattle goes live today. Here's a message I received from GTW director Lori Wallach:

Come to the Battle in Seattle!" The call spread nationwide. By November 1999, 50,000 people converged to protest the WTO summit. History was made when a devastating plan to expand the WTO's reign of corporate globalization was derailed. 

On September 19, an entertaining new film, Battle in Seattle, opens in select theaters. Starring Charlize Theron, Andre 3000, Michelle Rodriguez, Channing Tatum, Woody Harrelson, Ray Liotta, and others, Battle in Seattle is a full feature drama that tells the story of a dozen characters whose lives come together during the historic Seattle protests. One of the characters is an MSF doctor fighting the WTO rules that limit access to meds. Our story and our fight on the big screen where the whole country can get educated and activated!

This is the film Big Hollywood doesn't want us to see. Its being independently distributed -- starting in 15 cities. In 1999, folks took to the streets at the Seattle WTO protests. You can help deliver the Seattle Surprise Round II! Hit the seats!  If the opening theaters are packed for the film's first two weeks, the film will get a national distribution - turning on a new generation to the joy, fun and power of the Seattle Spirit and how we can win the better world we know is possible.

Here's how you can help:

• Organize your local group or your friends to purchase a block of tickets to a screening. Visit www.battleinseattlemovie.com to find theaters near you.
• For discount tickets (including group), cool widgets for your website and email action alerts you can send your friends, contact Michael at [email protected].
• Forward this to your friends and allies.

Here's a highlight from the NYT review of the movie:

“Battle in Seattle” is a film that leaves bruises. A visceral fictionalized account of the 1999 demonstrations in Seattle against the World Trade Organization, it repeatedly plunges you into the kicking and screaming melee of peaceful protest gone awry. Cries rend the air and bodies crumple as police batons are swung and tear-gas canisters explode. This is what happens, the movie warns, when the powers that be are unprepared for the magnitude of organized opposition and impulsively lash back. Resistance gives way to fury, and fury incites chaos.

The filmmaking debut of Stuart Townsend, an Irish actor, “Battle in Seattle” makes no bones about where its sympathies lie. Except for the anarchistic fringe, it is wholeheartedly on the side of the demonstrators, a loose coalition of grass-roots activists from the environmental and labor movements joined by students and other groups who opposed globalization.

In related news, Theron's appearance on Jon Stewart's The Daily Show, where Stewart jokes that - because the level of public awareness about the WTO is so low - the institution is "like the Freemasons", controlling everything from a hidden bunker. Elsewhere, director Stuart Townsend commented that the WTO "overturned" the U.S. clean water air act. This comment set off one of my all time favorites "anti-political", technocratic memes: that the WTO can't force a country to do anything.

Yes, the WTO doesn't directly overturn national laws: that would be illegal and Orwellian.

What it does is issue a panel report pointing out laws that are inconsistent with strict WTO rules, and then countries have the "choice" to change the law to secure compliance (which generally results in a change in a neoliberal direction), or they can "choose" to pay perpetual trade penalties (usually cash or trade sanctions in other sectors) until they do. Unlike penalties for labor violations in many NAFTA-style FTAs, these are not capped in dollar amount by an pact text.

To call this a choice? That's just regular ol' Orwellian.

This kind of "choice" is a lot like what workers face everyday in today's economy: you can choose to work at a job which does not adequately compensate you and which is demeaning, or you can choose to be fired. The option of raising standards is a quaint, folksy memory from the bad old days; best to forget about that. It's like Devo said,

A victim of collision on the open sea
Nobody ever said that life was free
Sink, swim, go down with the ship
But use your freedom of choice

And here's the song itself.

Battle in Seattle Opens! - Critics Chatter!

Tomorow, Stuart Townsend's new movie, The Battle of Seattle, opens across the country. There's still time to get involved in spreading the word about this movie, which depicts how everyday people can work together to change our system. Get involved here.

There are also plenty of reviews.

• David Postman of The Seattle Times, who covered the protests, says of Townsend: "When he began the project several years ago, he said he wanted to make something that would show "the meaning and limits of democracy." I think "Battle in Seattle" does that."
• John Hartl, doing the actual review of the movie for The Seattle Times, says: "Atlanta had "Gone With the Wind." New York City got "King Kong," more than once. And now our Emerald City has "Battle in Seattle." ... In the tradition of such movies as "Inherit the Wind" and "Compulsion," which appropriated Clarence Darrow's courtroom antics but never called him Clarence Darrow, "Battle in Seattle" features recognizable historical figures whose identities are partly inventions."
• Democracy Now has an interview with Townsend, and activist David Solnit, who helped orchestrate direct action events at the Seattle protests, and has written critically about the realism/authenticity of the protest scenes in the movie. He now says he is pleased with the movie and the debate it is engendering.
• Townsend writes about the David and Goliath moment on HuffPost.

The AFL-CIO features Steelworker president Leo Gerard's talking about the movie on the AFL blog:

It’s rare for a feature film to celebrate union power—or how activists of any stripe can trounce the world’s largest corporations. The writer and director, Stuart Townsend, tells our story in a way that lets a broad audience connect and learn about one of the proudest moments in American history.

The powers that be in Hollywood did not want this film made. Heaven forbid that the real story got out about the outrage of corporate globalization, the WTO or how motivated activists won against impossible odds.

Just like we organized turnout at the Seattle protests—telling our friends, posting information in our union halls, sending out e-mails and fliers—we can create another Seattle surprise! The fat cats in the big Hollywood studios are just like those CEOs sitting pretty the day before the Seattle summit started. I urge you to see the film and bring your friends, family and union brothers and sisters.

UPDATE: Also see Charlize Theron on Jon Stewart here:

Corporate America Wins with Trade!

This is quite the impressive jam by the Oregon Fair Trade Campaign (ORFTC)...

They do a great job of cutting straight to the heart of the the Consumer Electronics Association's silly-ness. US exports grow faster on average with countries when we have no NAFTA-style trade pact. The Colombia FTA can do nothing but wreak more havoc on the US economy and job market. We've already lost more than 3 million good manufacturing jobs since NAFTA, with the electronics industry itself having dealt its fair share of pink-slips. Now they go around highlighting the few jobs their members have not yet sent overseas as a reason to keep paving the way for them by passing unfair trade deals! Do they really expect a "thank you" from the American worker?

The truth is that the Fat Cat CEOs who stand to gain from FTAs would simply love another round of trade deals to make sure they can ship out the rest of the jobs wherever they please, whenever they please. As long as they can escape progressive, pro-worker regulation that ensures shared prosperity and sustainability, they'll be supporting any and every trade deal, no matter how horrendous the abuses of the regimes themselves or the abuses of their paramilitary allies.

Hats off to the Oregon Fair Trade Campaign for this one. World-class spoofing, indeed! My favorite is the part where they slam the bus as being too "low-brow" a mode of transport. Kudos.

Trade battles on the big screen at national conventions

If the presumptive presidential contenders and their advisors have still not figured out - ahem - the political costs of surrendering to so-called "free trade" policies of the NAFTA/WTO variety against the interest of, well, almost everybody, they might be surprised to find some people getting a little riled up about the issue at convention time: delegates to both the Democratic National Convention (August 25-28 in Denver) and the Republican National Convention (September 1-4 in St Paul) will be treated to a "sneak peak" viewing of the latest Hollywood indie extravaganza...

Stuart Townsend's Battle in Seattle won't open for another month for the rest of us (September 19th and 26th in select cities across the country), but thanks to the folks behind the Impact Film Festival, convention delegates will get an inspiring (and timely) look-in on a rocking film set in Seattle during the WTO protests.

With a star-studded cast (Charlize Theron, Woody Harrelson, Andre-3000, Ray Liotta, Michelle Rodriguez and more), everyone will want to see the story of the 5-day uprising that forced the collapse of the WTO's 1999 Seattle ministerial. The film is sort of like Crash, following the lives of twelve characters during those historic days. Woody plays a cop – no kidding. So does Tatum Channing. Andre Henderson and Michelle Rodriquez are protestors. One of the most powerful "people's" moments in recent U.S. history never looked so beautiful.

Maybe a trip down that particular 'memory lane', to the days when more than 50,000 union members (voters!), environmentalists (also voters!), students (read: youth voters!) and more converged in Seattle to speak truth to power in the face of the world's biggest corporations - and their Washington DC pundits - will keep the politicians just a little more honest when they talk about the looming trade issues of our time?

For the rest of us, now is the time to start booking those advance tickets for the Battle in Seattle showings closer to home. The film will be opening:

• September 19:   New York, San Francisco and Seattle (of course!)
• September 26:   Atlanta, Boston, Chicago, Detroit, Los Angeles, Minneapolis, Sacramento and Washington, DC.                        

Groups of 25 or more receive discount tickets. To find a theater near you call 866-758-1258 or visit www.battleinseattlemovie.com/labor

To organize an event around the film's release, contact Michael Crawford at 202-546-4996 or [email protected]

Morales rising: Evo win margin jumps 15% on record of stopping NAFTA-WTO expansion; reasserting control over natural resources

Bolivia’s President Evo Morales was returned to office last week following a controversial ‘recall referendum’ pushed by rightwing political opponents with a landslide victory of 68%.  Morales, the first indigenous president of Bolivia, won by 53% when initially elected in late 2005. The recall vote increased the majority of Morales and his Movement Towards Socialism (MAS) party by nearly 15%.

Morales’ landslide victory exposed the marginality of a vocal bloc of right-wing separatists in the country’s gas and oil-rich regions. Their goal – to get things back to pre-Morales days when a small elite controlled the revenues from the country’s massive energy resources and farm land. And they are desperate to derail Morales' planned constitutional and social reforms, including regaining control of the country’s oil and gas resources and land redistribution for one of the world’s erstwhile poorest nations.

The right wing had two related strategies: breaking the oil-producing lowland regions away from the rest of the country and taking the national oil revenues with and um...throwing Morales out of office. The first avenue is unconstitutional (although that has not stopped them from repeatedly trying) but now they’ve just gotten whomped on Plan B to un-elect Morales.

Media reports of the past week have largely focused on predictions that the defeated right wing would continue to attack Morales despite the massive vote of public confidence, since four key separatist opponents of Morales were also, as expected (and detailed in a report by WOLA here), returned to their regional posts. The significance of Morales’ rising support levels have largely been swept under the carpet: When Morales was elected in late 2005, his 53 victory was by far the largest in the country’s history, making him the first Bolivian leader able to claim an absolute majority. Two years later, his support has grown by a further 15%.

Such numbers suggest widespread support among Bolivia’s indigenous majority and beyond for the approach Morales has adopted to redistribute wealth and resources (as detailed in a recent report by CEPR)

Morales’ campaign for social and economic justice extends beyond Bolivia when the country participates in international negotiations. For instance, when the WTO recently held an invitation-only mini-ministerial for a select 30 countries, Morales’ issued a powerful statement. He said what many excluded developing country leaders were thinking about the attempt to steamroller through a Doha Round WTO expansion most poor countries oppose:

“The WTO negotiations have turned into a fight by developed countries to open markets in developing countries to favor their big companies…The poorest countries will be the main losers. The economic projections of a potential WTO agreement, carried out even by the World Bank, indicate that the cumulative costs of the loss in employment, the restrictions to national policymaking and the loss in tariff revenues will be greater than the “gains” from the “Development Round”.

After seven years, the WTO round is anchored in the past and out of date with the most important phenomena we are currently living: the food crisis, the energy crisis, climate change and the elimination of cultural diversity. The world is being led to believe that an agreement is needed to resolve the global agenda and this agreement does not correspond to that reality. Its bases are not appropriate to resist this new global agenda,” Morales said in a statement
ahead of the talks.

It is just this sort of clarity and principled defense of the interests of his country’s majority poor population that makes the right wing in Bolivia – and in the United States – obsessed with attacking Morales. With Morales and his social change projects facing continued challenges from corporate interests - both domestic and foreign - as well-argued in this CounterPunch essay, the struggle is far from over.

The Punditocracy: Speaking for the Wretched of the Earth

For those of us who get dizzy listening to the circular logic of the paragons of Punditocracy (especially of the capital P variety), Roger Bybee's (Fairness and Accuracy in Reporting) excellent historical round-up of Fareed Zakaria's noxious views on trade and globalization issues offers a welcome breath of cold, clean facts  after some pretty serious doses of post-Doha death vertigo from the 'powers that be'...

Fareed Zakaria, now the highly influential editor of Newsweek International, author of The Post-American World, and host of Fareed Zakaria GPS, constructed a landmark of unintended irony when he regally pronounced that “the downtrodden beg to differ” with protesters of corporate globalization (Foreign Affairs, 12/13/99).

Those who demonstrated against the World Trade Organization at the famous “battle of Seattle” in 1999, he asserted, were displaying the hubris of the “rich and privileged,” who were delivering “a familiar plea for the downtrodden of the world” by challenging the WTO’s promotion of sweatshops and environmental degradation in the impoverished Third World.

In other words, Zakaria denounced the arrogance of those who presume to advocate for the world’s poor—while appointing himself, the son of a prominent Indian attorney and politician, as the poor’s spokesperson. “There’s just one problem: The downtrodden beg to differ,” Zakaria declared.

In his eyes, the Third World’s poor eagerly welcome Western investment on any terms as a vast improvement over their current misery. Microscopic wages, long hours and heartless management in sweatshops, along with befouled air and water, might seem horrific to wealthy Westerners, but are gratefully welcomed by the desperate people of nations like Mexico, China and India. “In fact, if the demonstrators’ demands were met, the effect would be to crush the hopes of much poorer Third World workers,” he declared (12/13/99)...

On globalization, Zakaria zealously denounces opponents of corporate-determined trade agreements as seeking to impose utopian rules for the global economy that are widely rejected, especially by the most wretched of the earth....

Zakaria’s “anti-democratic” and “minority” accusations invert reality in...critical ways....

A recent multinational Chicago Council/ WorldPublicOpinion.org poll (released 4/25/07) found majorities in most poor nations insisting that globalization be accompanied by global standards to prevent a “race to the bottom.”

“Strong majorities in developing nations around the world support requiring signatories of trade agreements to meet minimum labor and environmental standards,” the survey concluded, citing data from China, India, Thailand, the Philippines, Argentina and Mexico. “Nine in 10 Americans also support such protections for workers and the environment.”

Elites in Third World nations, in contrast, staunchly opposed such standards, the study noted:

The leaders of less developed nations have generally opposed including language mandating minimum standards for working conditions and environmental protections in trade deals, arguing that such rules are protectionist and would undermine their ability to compete in major markets such as Europe and the United States.

“It has often been assumed that when leaders of developing countries argue against including labor or environmental standards in trade agreements, they represent the wishes of their people,” added Steven Kull, director of WorldPublic Opinion.org. “However, it appears that these publics would like to see the international community put pressure on their governments to raise their standards.”

These findings directly contradict Zakaria’s simplistic worldview that the free-trade agenda of America’s political and business elite reflects overwhelming public sentiment in both poorer nations and the U.S.

And, closer to home (and to the other salient topic of the day - the upcoming November polls - about which Zakaria is busy confusing the American electorate daily), Bybee reminds us of the ultimate price yet to be paid by those candidates who forget that the people actually know what's going on...

While elites across the globe support unregulated globalization, majorities in both the U.S. and poorer nations essentially seek to restructure globalization so that it benefits everyone—as signified by the flipping of 37 congressional seats in the 2006 mid-term elections from “free trade” advocates to supporters of “fair trade” (Global Trade Watch, 12/13/06)."

Gotta love it when the real elites try to carve their niches by claiming to speak for the poorest of the poor. Frantz Fanon must be spinning in his grave!

Book Reco: The Predator State (and Sister Souljah moments?)

James K. Galbraith is an advisor to the Obama campaign, a University of Texas professor of economics, and son of famous JFK advisor John Galbraith. He has a new book out called "The Predator State," and it is well worth a read.

The primary goal of the book is not to talk politics, but to talk ideas. Like a lot of books over the last few years, "The Predator State" dissects the work of neo-liberals. Their packet of ideas, in Galbraith's reading, was to cut taxes, end inflation, and free the markets. While the original Reagan acolytes came to power on the appeal of ideas like "freedom", latter day Bushites have largely abandoned any serious commitment to them. Now, it is only so-called "liberals" who largely accept these ideas as the starting point for discussion.

Galbraith's criticisms of supply-side economics are many. How can we believe that markets are perfect, and also believe that there's insufficient savings? If we believe government should not intervene in markets, why is there such widespread support for the independence of the Federal Reserve, a government entity that sets prices? Why do we attribute many ideas to Adam Smith and David Ricardo that they never uttered? Are markets really that perfect if they reward failed capitalists at Enron and elsewhere? Small bore ideas from universal pre-K to job training receive targeted criticism: this is much too little for Galbraith, who wants liberals to - in the wake of Katrina and climate chaos - embrace his big ideas of economic planning.       

Couldn't you have told me that 30 years ago?

Corporate lobbyists and ideologues have spent the past three decades in a frenzy trying to force countries to lower tariffs and deregulate their economies. Apparently, the brilliant economists involved in this exercise didn't realize that dangerously globalized supply chains require intensive usage of non-renewable energy sources. According to a front-page NYT story by Larry Rohter, which documents how Ikea and other companies are opening or reopening their U.S. manufacturing outfits:

Decisions like those suggest that what some economists call a neighborhood effect — putting factories closer to components suppliers and to consumers, to reduce transportation costs — could grow in importance if oil remains expensive. A barrel sold for $125 on Friday, compared with lows of $10 a decade ago.

“If prices stay at these levels, that could lead to some significant rearrangement of production, among sectors and countries,” said C. Fred Bergsten, author of “The United States and the World Economy” and director of the Peter G. Peterson Institute for International Economics, in Washington. “You could have a very significant shock to traditional consumption patterns and also some important growth effects.”

The cost of shipping a 40-foot container from Shanghai to the United States has risen to $8,000, compared with $3,000 early in the decade, according to a recent study of transportation costs. Big container ships, the pack mules of the 21st-century economy, have shaved their top speed by nearly 20 percent to save on fuel costs, substantially slowing shipping times.

The study, published in May by the Canadian investment bank CIBC World Markets, calculates that the recent surge in shipping costs is on average the equivalent of a 9 percent tariff on trade. “The cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today,” the report concluded, and as a result “has effectively offset all the trade liberalization efforts of the last three decades.”

This is info that would have been useful before center-left political parties starting imploding over
their leaders' support for deregulatory policies against the interest of their constituents, not to mention the government waste on USTR salaries. Can we recall our Geneva delegation yet?

Offshoring: It's Not (Just) A Dude Thing

Offshoring, downsizing, rightsizing... mention these words, and the image that pops in most people's heads is a hefty Midwestern man grumbling about his economic problems and then voting Republican.

But Lou Uchitelle has a piece today entitled "Women Are Now Equal as Victims of Poor Economy" that shows this view to be fatally flawed:

After moving into virtually every occupation, women are being afflicted on a large scale by the same troubles as men: downturns, layoffs, outsourcing, stagnant wages or the discouraging prospect of an outright pay cut...

Hard times in manufacturing certainly sidelined Tootie Samson of Baxter, Iowa. Nine months after she lost her job on a factory assembly line, Ms. Samson, 48, is still not working. She could be. Jobs that pay $8 or $9 an hour are easy enough to land, she says. But like the men with whom she worked at the Maytag washing machine factory, now closed, near her home, she resists going back to work at less than half her old wage...

The Joint Economic Committee study cites the growing statistical evidence that women are leaving the work force “on par with men,” and the potentially disastrous consequences for families.

“Women bring home about one-third of family income,” said Carolyn Maloney, Democrat of New York and vice chairman of the Joint Economic Committee. “And only those families with a working wife have seen real improvement in their living standards.”

Remember all the wage stagnation that we talk about on this blog? Well, what Maloney is saying is that the only reason there's not rioting in the streets is because BOTH parents are now working for low pay. Mix this with the Alan Greenspan admission that American paychecks only look good when seen through the flood of imported cheap plastic gadgets, and if you get drunk enough after your third shift, you might almost think your living standards are rising.

It's pretty rare in this town that Congress would be on the vanguard of a scarcely examined idea (even one that affects large numbers of Americans). And official feminism doesn't tend to focus on these working-class issues. Fifty years from now, when we're looking back on how America developed a comprehensive approach to class and gender issues, Maloney's report will register as one of the foundational steps: admitting that there's a problem, and one that's not going to go away by just putting a few rich women in high-paying positions and pretending like that's a victory for the movement.

Genoa Police Convicted of Brutality at Global Justice Protests

15 Italian police have been handed brutality convictions for their role in assaulting protestors at the 2001 G-8 global justice protests in Genoa, Italy. Police killed one Italian protestor, Carlo Giuliani, about whom more info is available here. According to the BBC:

Mark Covell was one of five British anti-globalisation protesters who was injured and has been seeking justice ever since.

"This was not just giving a few hippies a slap around, this was systematic," Mr Covell said.

A journalist with alternative media organisation Indymedia at the time, he was present when police raided a high school where protesters were camping during the summit.

He was left with eight broken ribs, a shredded lung, a broken hand, 16 missing teeth and was in a coma for two days.

The anarchist hardcore punk band Conflict wrote a song about Carlo, posted below. It will not be to everyone's taste, but you can be outraged at the Italian cops' overreaction (and happy about the progress made today) even if you aren't doing the windmill.

Peruvians Strike Against Familar Bedfellows Autocracy and FTAs

Regular readers will not be surprised at this reminder that despite the rhetoric, there's nothing particularly 'free' or 'democratic' about FTAs. How could deals that require such secrecy to broker and implement be any thing but? No wonder they hide. Forking over the rights of regular working people to corporations and investors isn't the most popular pill these days.

But Peruvian President Alan Garcia's recent power grab in the name of 'free trade' gives yet another reason to sigh dismissively when you next hear the conflation of free markets and democracy. If you're like us, you'll take comfort to see that when the perpetrators act as egregiously as Garcia, a true democratic voice rises up in opposition.

In June, Garcia overstepped his power to implement the US-Peru FTA and unilaterally changed land tenure law, facilitating the buy-up of indigenous and small farmers' properties. Other decrees removed community consultation requirements destructive mining and forestry mega-projects and eliminated a series of rights of workers. Garcia's forking over citizens' rights to corporations and investors, in true neo-liberal style, prompted calls for a national general strike currently underway

According to Inside US Trade:

A broad swath of Peruvian civil society and two leading opposition parties are calling for a nationwide work stoppage next week to protest a flurry of new laws enacted by Peruvian President Alan Garcia in late June under special authority granted by the Peruvian Congress.

That authority, which lasted 180 days and expired June 30, enabled Garcia to enact laws necessary to implement the U.S.-Peru free trade agreement through special decrees without congressional approval.

Peruvian activists have charged that Garcia has abused the special authority granted by the Peruvian Congress -- which only applies to legislation necessary to enact the FTA -- to enact laws that are unrelated to the FTA and that would hasten environmental degradation and weaken workers’ rights...

“We have a clear understanding that the government of Peru has used this period between the signing of the FTA and the implementation to lower social standards, labor rights and environmental standards,” one Peruvian activist said this week in an interview...

In the US press, the better coverage acknowledges Peruvians are striking against Garcia's free trade policies that have failed to deliver benefits of economic growth to the Peruvian people themselves, most of whom are grappling with rising prices as they see their resources and land gobbled up by the already wealthy. But there is scant mention that autocratic methods were used - even necessary - to implement regressive policy package.

Strikers have hit the streets in the name of accountability, democracy and for fair policies on trade, investment and development. For more on US-based efforts to ensure democracy replaces our autocratic, failed Fast-Tracked trade policy, check out the TRADE Act, which makes sure that democracy is at the center of US trade policy.

Sirota: The Growing Power of the Fair Trade Uprising

David Sirota gives a shout-out to the ever-expanding U.S. fair trade movement, saying it "may continue to be ignored by the media (and, frankly, much of the blogosphere), but it represents one of the most encouraging transpartisan developments of the last few years."

Over the last few years, polls show the public has moved to something of a consensus position on trade: full-on opposition to NAFTA-style pacts. That's for good reason as this Associated Press report shows. Tearing down tariffs and protections without regard for the consequences is not only a dangerous departure from the policies that built America's economy, but also a deliberate way to force American and foreign workers into a wage-cutting, environment-destroying, union-busting race to the bottom.

...Meanwhile... trade fundamentalists like Tom Friedman and Fareed Zakaria flaunt their supposed environmentalism and humanitarianism by publicly worrying about issues like global warming and the erosion of human rights in the developing world - even though the domino effect they cheer on creates pressure on governments to reduce their pollution controls and human rights in order to retain foreign investment.

NoNoNoNoNo: Ireland rejects corporate globalization

Irish voters have just rejected an attempt to force corporate globalization down their throat via the EU Lisbon Treaty. According to the Times Online:

Ireland - the only member state to hold a referendum on the matter - chose to reject it decisively by 53.4 per cent to 46.6 per cent....

Opponents rallied support for the No campaign around claims including that the treaty threatens sensitive Irish policies like the ban on abortion, low corporation tax and military neutrality...

Libertas, a group run by the businessman Declan Ganley and the Sinn Fein party, led by Gerry Adams, were among the most prominent 'no' campaigners.

Mr Ganley said today: "The Irish people should never have been taken for granted. In their enormous wisdom they have taken on board the treaty, looked at the arguments and, it seems that we have returned the same result again that our fellow Europeans in France and the Netherlands have already sent to the unelected Brussels elite."

That's in reference to the French and Dutch votes against a previous incarnation of the treaty. You can visit the "No" campaign's website here, which goes over the arguments about how the Lisbon treaty would limit workers rights and public interest policies. The Guardian reports that:

Adding saliva to injury, an MP has just been spat at by triumphant anti-EU campaigners singing Eurodance group 2 Unlimited's 1992 hit No Limits (a 'song' that repeats the word "No" 72 times, just to make the point). The political elite are not popular in Ireland.

Just for kicks, here's the song:

This is what (beef) democracy looks like

It's no secret that America's food and beef safety system is highly problematic and inferior to that of many Asian and European nations. So it shouldn't be any surprise that our agribusiness companies - already responsible for the destruction of the Mexican peasantry via NAFTA - have their sights set on another "barrier to trade": strong consumer regulations.

In fact, that's precisely the target of the latest NAFTA-style trade deal with Korea, and the government there very nearly caved to U.S. pressure to allow U.S. beef into the country's famously high quality domestic beef market. The Korean people put the smackdown on that proposal, as the NYT reports (with their beautiful photo as well):

President Lee Myung-bak pledged a "new beginning" on Wednesday as he contemplated reorganizing his unpopular government, which has been shaken by the biggest anti-government demonstrations in two decades.

The demonstrations against Mr. Lee started six weeks ago when students began protesting his government’s decision in April to resume imports of American beef despite widespread fears of mad cow disease. They grew into a broader backlash against Mr. Lee’s leadership style and his policies on everything from North Korea to education reform programs.

Speaking to a group of businessmen at his office, Mr. Lee gave his first comment on the massive rally against his four-month-old government that brought at least 100,000 people into the streets of Seoul on Tuesday and prompted his entire cabinet to offer to resign.

The beef protests have dealt a sharp blow to Mr. Lee, who was elected in December championing a new “pragmatic” approach to ties with Washington...

The protests Tuesday took place on the 21st anniversary of the huge pro-democracy demonstrations that helped end authoritarian rule. Overhead, balloons carried banners that said "Judgment day for Lee Myung-bak" and "Renegotiate the beef deal." One widely distributed leaflet said, "Mad cow drives our people mad!"

The agriculture minister, Chung Won-chun, visited the protest site to offer an apology in a speech, but protesters quickly surrounded him, chanting "Traitor!" and he was forced to leave.

Can you imagine this kind of outpouring in the U.S., and over food policy of all things! We don't get that kind of crowd for an anti-war march! Would we get that kinda crowd for health care?!

The insidious thing about NAFTA-style deals is that, not only do they open the borders to (in this case) unwanted products, but they also limit the ability of the government to regulate food properly. And if the government were to try to regulate, these deals give agribusiness firms the right to sue the government for taxpayer compensation, thus chilling better policy the next time. This actually happened when a group of Canadian cattlemen sued the U.S. when our government closed the border to beef trade when Canada had an instance of mad cow.