[PEN-L:9552] NAFTA case; Clinton Pursues Fast Track Authority Again

[Michael Eisenscher <meisenscher@xxxxxxx>]

Thursday, July 22, 1999

Obscure Lawsuit Could Alter U.S. Trade Policy
By EVELYN IRITANI, Los Angeles Times

Trade advocates are bracing for a ruling by a federal judge
in Alabama in a little-noticed lawsuit whose outcome could
dramatically alter the way the U.S. has conducted its trade
policy over four decades. Sometime in the next few weeks,
U.S. District Judge Robert Propst is expected to rule in a
labor-backed lawsuit challenging the constitutionality of
the landmark North American Free Trade Agreement. The case
has attracted the attention of some of the nation's top
legal scholars. Although a finding of unconstitutionality
would not undo the 1993 pact, it could make it more
difficult for the United States to commit itself to future
international endeavors and cast doubt on the legitimacy of
a host of other global agreements, according to Bruce
Ackerman, one of the nation's leading constitutional
scholars. "It would destabilize the existing system of
international law," said the Yale University professor. "It
would be difficult to declare NAFTA unconstitutional
without calling into question our commitment to the WTO,
the World Bank and many, many other economic arrangements."
Such a scenario would also put the U.S. in the
uncomfortable position of being committed under
international law to a trade agreement that its own courts
ruled in violation of its founding document.  "This is a
Rod Serling plot," said Robert Stumberg, an international
law expert at Georgetown University's Harrison Institute
for Public Law. "We [would now have] entered the twilight
zone, where an agreement that is binding on the U.S.
vis-a-vis the rest of the world cannot be enforced
internally." The case itself turns on the relatively narrow
question of whether NAFTA, which links the economies of the
U.S., Canada and Mexico in a giant free-trade zone, is a
trade agreement or a treaty.  That question has
historically been decided on a case-by-case basis as legal
scholars and politicians debated when a pact has a broad
enough impact to meet the higher test of a treaty.  During
the first 150 years of U.S. history, most of this country's
major foreign policy commitments were forged through
treaties, according to Ackerman. But after World War II,
when international trade exploded, leaders began relying
more heavily on some form of congressional-executive branch
agreement rather than treaties to facilitate more
commercial growth.  Between 1930 and 1992, the United
States ratified 891 treaties and 13,178 international
agreements, the government said.  The plaintiffs--the Made
in the USA foundation, a coalition of domestic
manufacturers and unions, and the United Steelworkers of
America--argue that NAFTA's scope qualifies it as a treaty
that, under the U.S. Constitution, required ratification by
a two-thirds vote of the Senate, instead of the simple
majority of both houses of Congress that favored it.  The
Clinton administration insists NAFTA is not a treaty but a
congressional executive agreement, a common tool in U.S.
trade policy that requires the approval of a simple
majority of both houses.  The administration maintains that
even if the plaintiffs win their constitutional challenge,
NAFTA would remain in place because the U.S. is bound under
international law to honor its commitments to foreign
governments.  "Under international law, we are not allowed
to say, 'Sorry, Mexico, sorry, Canada, we didn't do this
right,'" Justice Department attorney Martha Rubio argued in
court earlier this year.  Given the stakes, a successful
challenge to NAFTA is likely to be tied up in appeals for
years as it wends its way to the Supreme Court, according
to trade lawyers--and to create a long period of
uncertainty for U.S. trade policy.  This legal skirmish is
just the latest effort by globalization critics to slow the
Clinton administration's campaign to open markets around
the world. With the U.S. trade deficit headed for another
record year, unions and other groups are counting on
lawsuits, shareholder activism and old-fashioned protests
to draw attention to their concerns over job loss and
erosion of national sovereignty. In spite of the robust
U.S. economy and near-record low unemployment, the Clinton
administration has had a tough time convincing voters that
free-trade agreements such as NAFTA are in their best
interests.  The administration gives NAFTA credit for
boosting trade between the U.S. and its NAFTA neighbors by
more than 44% and creating at least 311,000 jobs. But the
Made in the USA Foundation contends the trade agreement has
cost more than 400,000 American jobs.  Last year, fierce
grass-roots resistance forced the White House to abandon an
effort to gain the fast-track authority that would allow
the president to negotiate free-trade agreements more
easily.  The administration is sending its top trade
officials on a domestic roadshow to drum up support for
launching a new round of trade liberalization talks at this
fall's Seattle ministerial meeting of the World Trade
Organization.  Joel Joseph, chairman and general counsel of
the Made in the USA Foundation, argues that Americans are
growing more disillusioned about trade agreements because
they have witnessed the dark side of globalism, from the
Asian financial crisis to the stepped-up competition from
low-cost competitors overseas.  He and his supporters are
counting on a win in Alabama to boost their political
leverage in an election year and put pressure on Congress
to at least consider revising NAFTA to include greater
protections for labor, the environment and consumer health
and safety.  "NAFTA was not designed to benefit workers, it
was designed to benefit corporations and financial
institutions," said George Becker, president of the United
Steelworkers, which claims that NAFTA has cost more than
7,000 steel jobs.  Although the foundation's legal
challenge has gained little notice on Main Street, it has
become a cause celebre in legal circles because it has
ignited a "battle of the stars" between Ackerman and
Laurence Tribe of Harvard University, two of America's most
prominent constitutional scholars.  Tribe, a longtime
critic of U.S. trade agreements, supports the plaintiffs'
notion that NAFTA--which regulates everything from
investment rules to food safety and labor rights--is a
treaty and was therefore adopted in violation of the
Constitution.  However, he does not share Ackerman's
concerns that a ruling that NAFTA is unconstitutional would
wreak havoc on America's past or future foreign economic
policy.  "To recommend searching constitutional inquiry
each time the United States considers binding itself to the
terms of an international agreement does not make one
guilty of fostering international 'destabilization,' as
Professor Ackerman has suggested," he wrote in the Harvard
Law Review. But Ackerman argues that NAFTA, like dozens of
other international agreements ratified since World War II,
was developed by Congress and the executive branch as a way
of countering the Senate's isolationist tendencies. He
describes the so-called congressional-executive agreement
as a more populist alternative to the Founding Fathers'
"anti-democratic" and "outmoded" decision to give the
Senate control of foreign economic policy through the
treaty process.  In the end, Ackerman points out, the
Senate still retains the power to reject any international
agreement and insist that it be handled as a treaty. "I
think it would be very wrong for the courts to intervene to
protect the Senate's prerogatives when the Senate itself
recognizes it is part of the team with the House," he said.

----------------------
Daniel J.B. Mitchell
daniel.j.b.mitchell@xxxxxxxxxxxxxxxxx
Ho-su Wu Professor at UCLA
Anderson Graduate School of Management and
School of Public Policy & Social Research
Office Mailing Address/phone:
   Anderson Graduate School of Management
   U.C.L.A.
   Los Angeles, California 90095-1481 USA
   Office phone: 310-825-1504
Personal Mailing Address:
   P.O. Box 492391
   Los Angeles, California 90049 USA
Fax: 310-829-1042
==================================

(http://www.zmag.org/Commentaries/donorform.htm).
Here then is today's ZNet Commentary...
------------------------------------------
Slick Willy Goes After Fast Track Authority on Trade Again
By Robin Hahnel
On June 12, 1999, flush from victories over House Republicans intent on
coup via impeachment, and over Slobodan Milosevic, Europe's "new Hitler,"
President Clinton launched a new attempt to win "fast track" authority to
negotiate new international trade and investment agreements - without
further congressional interference - in his speech to graduating students
at the University of Chicago. Washington Post staff writer William
Claiborne reported in "Lauding Trade, Clinton Urges 'Fast Track'" (6/13/99
A5) that "presidential aides said Clinton's speech was one of several
intended to promote a consensus on more open trade," and that "the
University of Chicago was an especially appropriate venue because of its
strong advocacy of free markets." The Clinton administration sure got that
right!
What is particularly annoying about Clinton is that he has refined the
practice of dressing reactionary policies in humane garb to an art form.
Slick Willy promised to negotiate "free and fair trade that will expand
global commercial exchanges that benefit all people... that will lift
everybody up, not pull everyone down... that will spread the benefits of
global growth more widely... that will widen the cradle of opportunity
since growth widely shared is better sustained." In a stellar contribution
not only to economic theory but to environmental science and English
literature as well, he proclaimed: "It is not true anymore that you can't
grow the economy without destroying the environment." It's almost enough to
make one wish for a Republican in the White House who just comes out and
tells it like it is: "I'm doing everything I can to promote more global
liberalization because it strengthens American business at home and
abroad." But forthrightness is not Slick Willy's shtick, and the truth
holds no value whatsoever for the Slime Meister.
The crowning moment of the speech was Clinton's announcement that he had
signed an executive order prohibiting federal agencies from buying products
made with "forced or abusive child labor." Claiborne reports that Clinton
"said he was appalled by the conditions in which 8 and 9 year-old children
work in many countries," and that "White House economic advisor Gene
Sperling said that the Labor Department will have four months to compile a
list of products with a history of child labor and that any time a federal
agency buys a product on the list it will have to ascertain that the
contractor did not purchase it from a plant engaging in abusive child
labor, even if it is the low bidder."
Inquiring minds who wanted to know exactly how the Labor Department would
go about distinguishing between "forced or abusive" child labor from "free,
non-abusive" child labor did not have long to wait for an answer. In his
Washington Post article "Clinton Advocates Child Labor Crackdown" (6/17/99)
Charles Babington tells us that Sperling "said the compact should face
minimal opposition in the Senate and even in developing countries that rely
substantially on child labor, because it targets only 'the most abusive
forms of child labor.'" Since any restrictions that would easily pass the
US Senate and win the approval of third world governments that rely heavily
on child labor will certainly be literally meaningless, it turns out the
Department of Labor's task will be quite easy: Child labor will be "forced
or abusive" only in countries whose governments do not meet Washington's
approval. Child labor in countries whose governments are amenable to
Washington's agenda will invariably be judged "free and non-abusive."
But what kind of international agreements does Slick Willy want a blank
check to negotiate in return for his rhetorical but meaningless campaign to
"wipe from the earth the most vicious forms of abusive child labor in which
tens of millions of children work in conditions that shock the conscience?"
And what would be the predictable effects of these international economic
agreements?
Whether it be negotiations leading up to the World Trade Organization (WTO)
meetings in Seattle this December, negotiations over including other Latin
American countries in the North American Free Trade Agreement (NAFTA), or
negotiations to revive the stalled Multinational Agreement on Investment
(MAI), the Clinton Administration is pressing for further liberalization of
international trade, investment, and foreign ownership. Since the US
delegation to the recently concluded G-8 meetings in Germany virtually
wrote the final communique we need go no further than that document to
discover the Administration's current thinking about globalization. In
paragraph 2 the communique states: "Globalization, a complex process
involving rapid and increasing flows of ideas, capital, technology, goods
and services around the world, has already brought widespread improvement
of living standards and a significant reduction in poverty. Integration has
helped to create jobs by stimulating efficiency, opportunity and growth."
What's great about communiques is there is no need to back up sweeping
generalizations with any supportive evidence. Of course the truth is that
the kind of corporate sponsored globalization that has been accelerating
since 1980 has reduced the rate of growth of per capita GDP in the world by
roughly 50% as compared to the Bretton Woods era that preceded it. The
truth is only a hand full of East Asian economies enjoyed significantly
higher rates of growth during the neoliberal era than the Bretton Woods
era, and when the flood of international investment that swept into those
economies in the late 1980s and early 1990s swept out again in 1997 every
one of the East Asian dream economies turned into a nightmare. The truth is
that even in countries that have done better than most, corporate sponsored
globalization has unleashed a wave of down sizing, unemployment, and job
insecurity. The truth is that corporate sponsored globalization has
dramatically increased the pace of environmental destruction. The truth is
that the dramatic increase in wealth and income inequality within countries
and between countries that has occurred during the era of corporate
sponsored globalization has been so overwhelming that not even mainstream
economists bother to deny it. And the truth is that elected governments
have less control over their economies than at any time during the past 50
years. But what's a little hyperbole among friends? Why should the Heads of
State and Government of the eight major democracies and the President of
the European Commission -- as they referred to themselves in their
communique -- not assure the world that globalization "has already brought
widespread improvement of living standards and a significant reduction in
poverty," and "helped create jobs?" The international press covering the
25th Economic Summit certainly did not bother to question the rosy picture
our leaders painted at its conclusion, or ask for corroborating evidence.

Slick Willy's job is to claim on the one hand that globalization has
already been great for almost everyone, and to claim on the other hand that
while this may not have been the case in the past, it will certainly be the
case in the future provided American leadership is preserved and he is
given a free hand to negotiate. In other words, he needs to keep lying and
to keep asking everyone to trust him. His chief liabilities are: (1) All
evidence indicates that corporate sponsored globalization has, in fact,
retarded growth, hastened environmental destruction, increased inequality,
and undermined economic democracy. (2) All evidence indicates that Clinton
(and Gore) are more in the pockets of the tiny minority who have benefitted
from globalization, and less responsive to the majority constituencies who
have been hurt by globalization than every before. And (3) Clinton has
reneged on promises to modify globalization so as to "lift everybody up,
not pull everyone down" every single time he has made them. His chief
assets are: (1) Both the major media and most of the economics profession
are supportive of corporate sponsored globalization, and are therefore
unlikely to question Clinton's unsupported paeans of praise to the
globalization gods. (2) There is no electable opponent whose position on
globalization is significantly different from Clinton's (and Gore's)
despite continuing evidence that a substantial majority of the US
electorate opposes further globalization. And (3) Slick Willy is a
practiced liar and master manipulator.
And lest you think that liberals in Congress would never fall for the Slime
Meister's latest ploy, Senator Tom Harkin (D-Iowa) who Claiborne describes
as "a strident opponent of child labor," was quoted in the same article
covering Clinton's University of Chicago speech saying that Clinton's
executive order sends a "strong signal at home and abroad that the US
government is serious about eradicating abusive and exploitative child
labor." It makes one wonder if the fix between the White House and liberal
Democrats in Congress is already in.


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