Under Threat:Under Threat:Democracy under the New Trade

Deals

Democracy under the New Trade

DealsPrepared for the

By the Resource Center of the Americas & Labor Education Service, University of MN

Minnesota Fair Trade CoalitionMinnesota Fair Trade Coalition

(June 2003)

Millions of good jobs lost Millions of good jobs lost

• 3,000,000 manufacturing jobs lost to free trade since 1994

• Over 750,000 jobs lost under NAFTA alone

In recent years, Free Trade Agreements have cost this country millions of good jobs.

Sweatshops-R-Us Globalization Sweatshops-R-Us Globalization • Many jobs sent to poor

countries

• Work often done under sweatshop conditions

• Workers often denied unions and basic human rights

These trade deals also eroded our democratic process.

These trade deals also eroded our democratic process. • In 1998, the WTO ruled new

U.S. clean air standards were barriers to free trade – and they forced the U.S. to change them.

• Under NAFTA, a Canadian company sued the U.S. for almost $1 billion when California banned a toxic gasoline additive.

Democracy Under Attack Democracy Under Attack

• Now a new generation of trade deals threaten to undermine our democracy even further.

Democracy at Risk. Democracy at Risk.

• The new trade agreements challenge fundamental concepts of democratic government and national sovereignty.

• And they threaten to put many key public services under corporate – not public – control.

New Trade Deals and

Government

New Trade Deals and

Government • Negotiations are underway on:

– FTAA (Free Trade Area of the Americas)

– GATS (General Agreement on Trade in Services)

• These agreements could:– mandate privatization of government services– threaten environmental protections, safety and

human rights laws.– undermine worker rights and protections

All without citizens or elected officials having any say.

All without citizens or elected officials having any say.

FTAA (Free Trade Area of the Americas) FTAA (Free Trade Area of the Americas)

• FTAA extends NAFTA to 34 western hemisphere nations

• FTAA greatly expands coverage of NAFTA

• Negotiations aim to be done in 2004 -- voted on by Congress in 2005

GATS (General Agreement on Trade in Services)GATS (General Agreement on Trade in Services)

• Goal is to cover all services, all methods of delivering services, and every government measure at all levels affecting trade

• GATS is administered by the World Trade Organization (WTO)

• GATS covers 146 nations, including U.S.

• Negotiations aim to be done in 2004 -- voted on by Congress in 2005

GATS targets all government

measures

GATS targets all government

measures• rules• policies• laws• subsidies• regulations• court decisions

GATS limits what laws we can pass

GATS limits what laws we can pass• Will likely prohibit measures

that are “more burdensome than necessary” for foreign companies

• Measures would have to be the “least trade restrictive” possible

• Would prohibit government from setting conditions on awarding contracts except those necessary for product quality or supplier capability

Sample MN Laws at RiskSample MN Laws at Risk• Prevailing wage

• Corporate subsidy reform reporting and wage standards

• Corporate feedlot restrictions

• Electricity rate regulations

• HMO non-profit requirement

• Cost clean-up requirements for pipeline spills

• Many other environmental, labor, and corporate accountability laws

GATS, FTAA and Public ServicesGATS, FTAA and Public Services

• Could require many public services to be opened to bid by private foreign companies …

... regardless of the will of citizens or our elected officials.

So,So,What public services are targeted?

What public services are targeted?

Water ServicesWater Services

• Water collection, purification and distribution

• Waste-water treatment

Many of these services are now provided by municipal water districts

This continues a corporate push to control water supplies

This continues a corporate push to control water supplies

The World Bankestimates a fully-privatized global water market is worth $800 billion a year

Rebecca Mark, former CEO of Enron’s Water Division, said she would not rest until she had:

“fully privatized the global water market.”

Enron worked closely with the Bush administration to define U.S. goals for GATS

Surprise …Surprise …

Waste Management ServicesWaste Management Services

• Waste management is also targeted under GATS

GATS will likely allow foreign firms to bid on municipal sanitation and incineration work.

Air and Water Protection ServicesAir and Water Protection Services

• Protection of ambient air and climate

GATS will likely allow foreign firms to bid on the work currently done by the U.S. Environmental Protection Agency (EPA), state Pollution Control Agencies (PCAs), perhaps even OSHA.

Environmental Protection ServicesEnvironmental Protection Services

• Protection of biodiversity and landscape

GATS targets for privatization services that include work done currently by the National Parks Administration, U.S. Forest Service, Bureau of Land Management, and state Departments of Natural Resources

Transportation ServicesTransportation Services

• Urban mass transit and other transportation services

GATS could allow foreign firms to bid on mass transit services – buses, trains, metro mobility, etc.

It may even include school bus transportation.

Education ServicesEducation Services

• Higher education, adult education and various training services

Currently negotiations are underway to cover all education beyond secondary school.

If these trade deals passIf these trade deals pass

These public services could be privatized without citizen input.

• It wouldn’t matter if we thought corporate control didn’t serve the public good -- we couldn’t pass laws to protect our interests.

Let’s look at a hypothetical case …Let’s look at a hypothetical case …

• Assume GATS rules are already in place

This is how the new trade agreements might undermine democracy in local communities…

A couple of years ago,

U.S. Filter tried to take control of New Orleans’ water system.

• 65% of New Orleans voters signed a petition demanding public control of their water.

Citizens fought back.

But …

They thought they had won. They thought they had won.

• The Water and Sewerage Board rejects U.S. Filter’s bid.

• And the coalition secures a requirement that any future privatization effort must be put to a public referendum.

This is what democracy is supposed to look like.

This is what democracy is supposed to look like.

But one day,

a few months after the new GATS takes effect in 2006, the City of New Orleans receives a letter …

… from U.S. Filter …

… a division of Vivendi.

… is a French-based multi-national corporation and one of the world’s largest private water companies.

Vivendi …

… is also one of the “water barons” criticized for providing poor service at a higher cost to consumers in their African and Latin American water privatization schemes.

Dear City of New Orleans:

You are obliged under the provisions of

GATS to consider U.S. Filter’s bid to

operate the New Orleans water system.

This decision cannot be put to a citizen

referendum.

Very truly yours,

Vivendi

Their letter says,

New Orleans seeks help.It asks for an opinion from the U.S. Trade Representative’s Office.

The U.S. Trade Representative replies:

• New Orleans must allow U.S. Filter to bid.

• If they refuse, the U.S. must use all means at its disposal to force compliance – or else face huge penalties.

• US Filter submits a bid and it is the low bid – under GATS New Orleans must accept it.

New Orleans complies.

• It doesn’t matter that New Orleans’ law requires a citizen referendum.

• It doesn’t matter that New Orleans citizens want to retain control over their water.

This was fiction.But if GATS rules are adopted as currently envisioned, this fiction could become all too real.

In the 1990s corporate free-traders began their assault on our democracy.

Now they are stepping up the attack.

What can be done?What can be done?• Build awareness

– educate your membership

– write opinion piece or letter to editor

– write article for local newsletter

• Contact Congress– write Congress about specific issue

– encourage your organization or local elected officials to contact Congress

• Make it an election issue– put question on candidate screening

– talk to local elected officials about local impacts

• Mobilize people nationally– prepare for November Miami rallies

Join the

Minnesota Fair Trade Coalition

more than 60 allied groups fighting to make respect for working people, family

farmers, our environment, and our democracy an integral part of the global economy

Contact:

Larry Weiss612-276-0788 x19

lweiss@americas.org