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[GreenYes] Trade and the Environment Redeux
- Subject: [GreenYes] Trade and the Environment Redeux
- From: "Peter Anderson" <email@example.com>
- Date: Thu, 19 Apr 2001 09:11:53 -0500
fyi (If anyone on this list has factual information that refutes or provides another reasonable interpretation of the assertions in this article from the London Observer, please share that with us. peter)
<b>GATS GOT HIS TONGUE
Secret trade treaty documents reveal the shark hidden in the free trade
By Gregory Palast
The Observer (London), Sunday 15 April 2000.</b>
<i>(Note to American readers: Replace the words "Trade Minister Dick Caborn"
with the words, "US Trade Representative" - whose assurances about the WTO
are virtually interchangeable with European ministers' happy-talk....)</i>
Britain's Trade Minister Dick Caborn does nothing all day, and that keeps him
very, very busy. Caborn is busy reassuring his nation that nothing in the
proposed General Agreement on Trade in Services (GATS) threatens Britain's
environmental regulations. Nothing in GATS permits American corporate powers
to overturn safety, health regulations. Nothing in GATS, which is part of
the World Trade Organization regime, threatens public control of the UK
National Health Service. The official statement of what GATS doesn't do
goes on for pages and pages.
So I've been perplexed by Caborn and his European Union sidekick, trade
commissioner Pascal Lamy, rushing to Geneva and Washington and god knows
where to argue over the wording of rules which do Nothing, change Nothing and
But then, this week, Something came through my fax machine. And this
confidential document, dated March 19, from the World Trade Organization
Secretariate is Something indeed: a plan to create an international agency
with veto power over parliamentary and regulatory decisions.
When Churchill said that, "democracy is the worst form of government except
all the others," he simply lacked the vision to see that in March 2001, the
WTO would design a system to replace democracy with something much better -
Article VI.4 of GATS. And this unassuming 6-page memo, now modestly hidden
away in secrecy, may one day be seen as the post-democratic Magna Carta.
It begins with considering that difficult matter of how to punish nations
which violate, "...a balance between two potentially conflicting priorites:
promoting trade expansion versus protecting the regulatory rights of
Think about that. For a few centuries centuries Britain, and now almost all
nations, have relied on elected parliaments, congresses, prime ministers and
presidents to set the rules. It is these ungainly deliberative bodies which
"balance" the interests of citizens and businesses
Now kiss that obsolete system goodbye. Once Britain and the EU sign on to
the GATS treaty, Article VI.4, called The Necessity Test, will kick in.
Then, per the Secretariate's secret program outlined in the March 19 memo,
national parliaments and regulatory agencies will be demoted, in effect, to
advisory bodies. Final authority will rest with the GATS Disputes Panel to
determine if a law or regulation is, "more burdensome than necessary," in the
memo's language. And GATS, not parliament, will you what is 'necessary.'
As a practical matter, this means nations will have to shape laws protecting
the air you breathe, the trains you ride and the food you chew by picking,
not the best nor safest means for the nation, but the CHEAPEST methods for
foreign investors and merchants.
Let's get down to concrete examples. The Necessity Test has already had a
trial run in North America via inclusion in NAFTA, the region's free trade
agreement. Recently, the state of California banned a gasoline additive MBTE
which haws contaminated water supplies. A Canadian seller of the "M"
chemical in MBTE filed a complaint saying the rule fails The Necessity Test.
The Canadians assert, quite logically, that California could simply require
all petrol stations to dig up storage tanks and reseal them, and hire a swarm
of inspectors to make sure it's done perfectly. The Canadian proposal might
cost Californians a bundle and would be impossible to police. That's just
too bad. The Canadian proposal is the LEAST TRADE-RESTRICTIVE method for
protecting the water supply. 'Least trade-restrictive' is NAFTA's Necessity
Test. If California doesn't knuckle under and drop its ban on MBTE, the US
Treasury may now have to fork over $976 million (£635 million) to the
Canadian chemicals seller.
The GATS' version of the The Necessity Test is NAFTA on steroids. Under
GATS, as described in the purloined memo, national laws and regulations will
be struck down if they are 'more burdensome than necessary' to business.
Notice the subtle change from 'least trade-restrictive'. Suddenly the GATS
treaty is not about trade at all, but a sly means to wipe away restrictions
on business and industry, foreign AND LOCAL.
What burdensome restrictions are in the corporate cross-hairs? The US trade
representative has already floated proposals on retail distribution. Want to
preserve Britain's green belts? Well, forget it - not if some bunch of trees
are in the way of a Wal-Mart's superstore. Even under the current, weaker
GATS, Japan was forced to tear up its own planning rules to let in the retail
The British trade minister assures us that nothing threatens the right to
enforce laws in the nation's public interest. But not according to the 19
March memo. It reports that, in the course of the secretive multilateral
negotiations, trade ministers have agreed that if a nation is hauled before
the GATS tribunal, a defense of "safeguarding the public interest ... was
In place of a public interest standard, the Secretariat proposes a
deliciously Machiavellian 'efficiency principle.' "It may well be
politically more acceptable to countries to accept international obligations
which give primacy to economic efficiency." This is an unsubtle invitation
to load the GATS with requirements which rulers know their democratic
parliaments could not accept. This would be supremely dangerous if, one day,
the USA elected a President who wanted to shred air pollution rules or, say,
Britain elected a prime minister with a mad desire to sell off his nation's
air traffic control system. How convenient for embattled chief executives:
what elected Congresses and Parliaments dare not do, GATS would require.
The government can brush off the green-haired anti-GATS protester, but
can't ignore the objections of the gray-hairs of the British Medical
Association. The BMA is jittery about GATS' control over the National Health
Service. In its journal LANCET, the BMA nervously questions European
Commissioner Lamy's assurances that, "interpretation of the rules [must not
be] settled by disputes procedures," that is, the GATS panel. One pundit
calls the BMA's position 'hysterical.'
But after reading the 19 March internal memo, hysteria may be the right
perscription. The memo makes no concession to sovereign interpretation of
the rules. Under the post-democratic GATS regime, the Disputes Panel, the
Grand Inquistors of the Free Market, will decide whether a nation's law or a
regulation serves a what the memo calls a 'legitimate objective.'
While parliaments are lumbered with dated constitutional requirements to
debate a law's legitimacy in public, with reviewing the evidence in public,
in hearings open to citizen comment, GATS panels are far more efficient.
GATS tribunals are closed. Unions, consumer, environmental and human rights
groups are barred from participating - or even knowing what is said before
Is the March 19 memo just a bit of wool gathering by the WTO Secretariat?
Hardly. The WTO was working from the proposals suggested in yet ANOTHER
confidential document also sent to me by my good friend, Unnamable Source.
The secret memo, "Domestic Regulation: Necessity and Transparency," dated 24
February, was drafted by the European Community's own "working party" in
which the UK ministry claims a lead role.
In letter to members of Parliament, UK Trade Minister Caborn swears that,
through the European working party, he will insure that GATS recognizes the
"sovereign right of government to regulate services" to meet "national policy
objectives." Yet the 24 February memo, representing the UK's official (though
hidden) proposals rejects a nation's right to remove its rules from GATS
jurisdiction once a service industry is joined to the treaty. Indeed, the EC
document contains contemptuous attacks on nations claiming "legitimate
objectives" as potential "disguised barriers" to trade liberalization.
Moreoer, that nasty little codicils against national control, that
regulation must not be 'more trade restrictive than necessary,' is suggested
in the EC document, ready for harvesting by the WTO Secretariat's free market
Not knowing I had these documents in hand, the trade minister's office
told me this week that GATS permitted nations a "right of to regulate to meet
national policy objectives." I was not permitted to question the Trade
Minister himself (and in the post-GATS future, I understand, no mortal may be
permitted to gaze directly upon him). But let us suppose, for a moment, that
minister Caborn believes what his press office says on his behalf, that there
is nothing to fear from GATS, especially because any nation can opt in or out
of clauses as it chooses.
Don't count on it. According to Professor Bob Stumberg of Georgetown
University, the WTO is now suggesting that the Necessity Test, the shark in
the swimming pool, will be applied "horizontally," that is, to all services.
No opt outs.
The trade minister's letters to Parliament admits that his pleasant
interpretation of GATS has not been 'tested in WTO jurisprudence.' In other
words, HE DOESN'T ACTUALLY KNOW if a GATS panel will rule as in his
fantasies. This is, after all, the minister who, with his EU counterparts,
just lost a $194 million judgment to the USA over the sale of bananas.
(Now, I can understand how minister Caborn goofed that one. Europe
argued that bananas are a PRODUCT, but the USA successfully proved that
bananas are a SERVICE - try not to think about that - and therefore fall
And that illustrates the key issue. No one in Britain should bother
with what a British trader minister thinks. The only thing that counts is
what George W Bush thinks. Or, at least, what the people who think FOR
George think. Presumably, minister Caborn won't sue the UK for violating the
treaty. But the USA might. It has. Forget Caborn's assurance -- what
consumers in Britain, Europe and the USA need is assurance from President
Bush that he won't use GATS to help out Wal-Mart or Citibank or Chevron Oil.
Don't bet on it.
The odd thing is, despite getting serviced in the bananas case, minister
Caborn and the Blair government have not demanded explicit language barring
commerce-first decisions by a GATS panel. Instead, the secret 14 February EC
paper encourages the WTO's Secretariat to use the punitive form of The
Necessity Test sought by the USA.
So there you have it. Rather than attack the rules by which America
whipped Europe, Caborn and the EC are keen on handing George Bush a bigger
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