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World
Trade Keep Away |
vs. The People
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WTO
Graphic ©1999 Mike Konopacki
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The World Trade Organization has the demonstrated power to
undo domestic laws that don’t meet its standard of
unhampered corporate trade and investment. Under the WTO, a
country (usually representing a particular corporate interest)
can challenge another country’s laws if they appear to
violate WTO rules. A WTO tribunal hears the challenge and then
issues a ruling. If the panel deems that the law violates the
WTO, the offending country must either rescind the law or pay
heavy penalties. Activists say that so far, the WTO has ruled
against the public interest every time. And sometimes even the
threat of a WTO challenge is enough to keep a useful domestic
law from being passed in the first place. A few case studies:
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The
WTO is "the place where governments collude in
private against their domestic pressure groups."
— a WTO Official quoted in the Financial Times |
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In an effort to encourage women to breast feed babies
rather than use less healthful formula, Guatemala passed a law
banning the use of baby pictures on labels for baby food. The
government feared that such advertising would make illiterate
women associate fat, healthy babies with formula rather than
breast milk. Guatemala’s domestic baby food companies
adapted to the law, and infant mortality levels dropped. But
the U.S.-based Gerber company got the U.S. government to
threaten to bring the issue to the WTO. The Guatemalan Supreme
Court subsequently exempted imported baby foods from the law.
Several U.S. municipal and county governments and the state
of Massachusetts passed trade restrictions on Myanmar
(formerly Burma) because of the rampant labor and human rights
violations there. The European Union and Japan charged that
Massachusetts’ law violated the WTO. A corporate-sponsored
group then agreed to take up the case in U.S. courts, and the
WTO challenge was suspended. However, if Massachusetts wins
the court challenge, the WTO case will be reinstated. The
Clinton administration is now discouraging local entities from
passing such laws. Last year, the administration (side by side
with corporate interests) lobbied the Maryland state
legislature not to pass a law sanctioning Nigeria for its
human rights abuses. The law failed by one vote.
Venezuela’s oil industry didn’t like a U.S. Clean Air
Act regulation that required gas refiners to produce cleaner
gas. It brought the issue to the WTO, arguing that the U.S.
law was biased against foreign refiners. The WTO ruled against
the U.S., and the Environmental Protection Agency changed the
law in a way that the agency itself admitted "creates a
potential for adverse environmental impact."
In the Windward Islands, banana production is a major
source of jobs and revenue — although bananas grown there
represent only a small share of the total banana market.
European countries had a trade preference for bananas grown in
those countries. The U.S. went to the WTO complaining that the
European preference was unfair to U.S. corporations growing
bananas in Central America (growers like Chiquita, whose CEO
is a major contributor to Democratic and Republican
politicians). The WTO ruled against the EU trade preference.
The EU modified its policy, but the WTO found that
insufficient. Now the U.S. can levy $200 million in trade
sanctions against European imports.
Europe banned the sale of beef from cattle raised with
certain artificial growth hormones. The U.S. complained to the
WTO. The WTO ruled in the U.S.’s favor and gave the EU a
deadline for overturning their ban.
(Information from Public Citizen’s Global Trade
Watch.)
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