The WORLD TRADE ORGANIZATION
and the Dissolution of American Sovereignty
W. Taft Matney, Jr.
Presented: December 1997
TABLE OF CONTENTS
Introduction
Background In Organized World Trade
The World Trade Organization
The WTO Debate
Conclusion
Works Cited
Introduction
As the twentieth century comes to an end with a technological flash, computers are serving as erasers of geographical boundaries. Concepts and realities such as e-mail, fax, and the World Wide Web allow virtually anyone to travel across the globe with only a simple stroke on Bill Gates’ keyboard. The technological trappings of which so many have become accustomed are not the only methods that have shrunk our earth.
Inarguably, today’s political climate is changing in ways only a select few ever imagined. In the halls of democratic governments across the globe, state and local leadership is seeing its authority removed in favor of one which uses a "bigger is better" philosophy. When watching the television evening news, listening to the radio, or reading the morning newspaper, often returning to a vigilant constituency are sights and sounds of meetings, rounds, conferences, and conventions filled with the world’s leaders. Is this spirit of "global cooperation" and "less restricted access" to other nations always a positive achievement?
For instance, imagine if a foreign court found an American law illegal, and the United States government had to adjust either its regulatory actions or face fines or international sanctions. Never fear; that can never happen. Can it? After all, according to Article VI, Section 2 of the Constitution of the United States, the American government as the legal agent of the Constitution is the "supreme law of the land; and the judges in every State shall be bound thereby, anything in the constitution or laws of any State to the contrary notwithstanding."
Apparently, the Constitution is slowly being phased out to make a wide path for a global government. Our laws are no longer our own, and due to the Herculean influence of groups such as the World Trade Organization, we must now adopt laws of other nations to place all sovereign lands on an equal field.
The purpose of this paper is to illustrate how the World Trade Organization is removing America’s national sovereignty, not just in theory, but in practice as well. By offering a brief overview of the history, duties, existence, and actions of the WTO, there is no possible view that can be taken other than the "supreme law of the land" is being reduced to nothing more than a document only schoolchildren will learn of in history class.
Background In Organized World Trade
The idea of the General Agreement on Tariffs and Trade (GATT) was initially created in 1948 as the International Trade Organization (ITO), a distinct entity within the United Nations organizational collective to reduce customs tariffs and increase trade to boost a global economy so devastated by World War II. The trade agreements, coming out of the same conferences that formed the International Monetary Fund and the World Bank, resulted in commerce savings that equaled twenty percent of the world's economy. The 1948 convention resulted in 45,000 tariff arrangements that amounted to $10 billion in business.
With the world then still in turmoil after the costly world war, the negotiating leaders were fully aware that their goals were lofty and knew it was absolutely paramount to ratify their agreement as soon as possible. For whatever reason, the ITO was never ratified by the Bretton Woods establishments, but the tariff agreements that assembled the General Agreement on Tariffs and Trade remained firmly in place by the twenty-three nations referred to as the "contracting parties" (www.wto.org [about]).
Until 1995, with the formation of the WTO, the vast majority of the agreements retained their original provisions; although periodically amended through the use of negotiations called "trade rounds" named after the host country. The eighth and most recent series of GATT negotiations originated in September 1986 in Punta del Este, Uruguay. Frequent meetings spanning nine years and seven locations embarked on the reformation of several subject areas, the most important being the complete overhaul of the GATT association (www.wto.org [about]).
From its inception, GATT had become more than a set of trade rules; it became a virtual de facto governmental body. The contracting parties considered the most significant weakness being the lack of enforcement mechanisms and felt a compelling and systematic methodology for increasing free trade was essential for continued progress. By the end of the Uruguay Round, a 15,000-page document was completed and resulted in the formation of the World Trade Organization.
THE World Trade Organization
An Organization of Permanence
Officials at the WTO headquarters in Geneva, Switzerland publicize The World Trade Organization by stating, "As the more mature WTO developed out of GATT, you could say that the child is the father of the man" (www.wto.org [about]). The organization touts itself as "the only international body dealing with the rules of trade between nations" (www.wto.org [about]). This alliance of one hundred thirty-two member nations, thirty-two observer governments, and seven international consulting government organizations decides how trade will be regulated among its partners. Unlike the GATT accords of the preceding fifty years, WTO compacts are permanent; they deal with the General Agreement on Trade in Services (GATS), the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and have procedure to settle disputes among members (www.wto.org [about]).
The latter item is the primary item of controversy. The system of dispute resolution is at the core of the national sovereignty debate.
WTO Dispute Settlement
In accordance with the final WTO agreement of the Uruguay Round, member nations may not take any unilateral action against another member nation who is presumed to have violated one or more of the organizations trading laws. That right is relinquished upon acceptance of membership into the league.
As one party decides that another has committed a wrong within the scope in WTO trade laws, the plaintiff first must meet with the defendant and consult with the members of the General Counsel. If a mutually agreeable solution cannot be gained from the consultation, the two parties must appear for an arbitration decision from a three-member panel convened by the General Counsel acting as the Dispute Settlement Body (DSB). If one or more of the sparring parties is dissatisfied with the panel's report, appeal can be made by the standing seven-member Appellate Body previously established by the DSB. The appeals level does have the authority to modify the initial panel's report, but after that body announces its decision, the rulings of the court system must be complied with after being given a "reasonable period of time." If the WTO rulings are not adhered to within the allowed time, the DSB can impose sanctions against the necessary party (www.wto.org [dispute]).
The WTO Debate
Shrouded in Secrecy
One of the problems in disseminating information from the WTO is due to the amount of secrecy surrounding the trade body. Public access is limited to the most extreme degree. In researching the WTO for this exposition, I wanted to personally examine the final act of the Uruguay Round and learned I could obtain an online copy via the Internet address http://gatekeeper.unicc.org/wto/uround_wpf.htmlfinal_act/ at which time I promptly received the message, "Proxy denies fulfilling the request. The proxy's access control configuration denies access to the requested object through this proxy." The global establishment of which my country is a signatory member would not allow access to the final version of the Uruguay Round agreement.
Furthermore, upon investigating the organization listed in the Internet address, unicc, I learned it was the United Nations International Computing Centre. As I gained admittance to the UNICC site, I was able to get no farther than a simple homepage with sentence long abstracts regarding the different departments within the UNICC.
Apparently, my investigations have proven similar to others. In mid-September of 1994, President Clinton received a letter authored and signed by over fifty chiefs of America's major news organizations, which solicited for the final WTO negotiations to become accessible to the general public and news media. The content of the letter was a five-point set of concerns that appeared to violate American liberties regarding the right to know. According to Ralph Nader:
They include a lockout of the press and the public from WTO tribunals; suppression of the briefs and other documents presented by governments that are parties to disputes before these tribunals; denial of citizens' right to petition; the absence of conflict-of-interest standards for the tribunals' three trade specialists, who act as judges and may simultaneously pursue private business careers; and a prohibition of any independent appeals of WTO tribunal decisions (Nader 11).
John Seigenthaler of Vanderbilt University's Freedom Forum First Amendment Center and director of the effort by the American press, "We must restore democratic openness to this crucial process. To do otherwise would break a sacred pact with the American people" (Nader 11).
Seemingly, the only item on which the WTO does not remain secret is its inherent secrecy. Its own structural organization chart says, "All WTO members may participate in all councils, committees, etc., except Appellate Body, Dispute Settling Body, Textiles Monitoring Body, and all plurilateral committees" (www.wto.org [about]). In short, it is the built-in mystery of the union that secures its increasing global powers on the executive, legislative, and judicial levels, especially with regard, or disregard, of the United States.
The US Domestic Forecast
The power given to the WTO by the American negotiators cannot be blamed on one person or even political party. As was mentioned earlier, the Uruguay Round was a bargaining conference that lasted almost a decade. We now must face the consequences of our actions.
Nader again examines those consequences and how our domestic lives will change in that WTO support endorses:
a budget-busting waiver of $31 billion, due to tariff revenue reductions under the agreement, (2) ceding power to the WTO in Geneva to invalidate US laws or impose perpetual trade fines, (3) replacing democratic powers residing in the US government with the autocratic authority of a world government, (4) stripping citizens of any voice and control over the decisions of the WTO, with its one nation, one vote that permits two dictatorships to outvote the United States and (5) enabling the foreign regulation of US health, safety and other living standards (Nader 19).
The United States government envisions a much different scenario. According to US State Department, much like American Express, membership has its privileges. State department officials say the world trade system’s "free rider" problem is solved since only those nations belonging to and adhering to the WTO’s arrangements can reap the benefits of lower tariffs and more open markets (State Dept.).
Anti-US / Anti-American Sovereignty
Who is correct in their opinions of the WTO, the opponents or the proponents? In order to maintain consistency, predictions from one viewpoint will be used as a benchmark.
US Domestic Revenue Loss of $31 Billion as a Budget-Buster
In reality, the economic forecast seems bright. Indications seem to demonstrate the federal deficit is decreasing incrementally and will continue to do so until it no longer exists. There are still those who believe that this is not a permanent situation, and the funds will not last long enough to pay for the free trade offered by the WTO. They say, "Under the pay-as-you-go budget rules, funds must be found to cover the revenue the United States will lose through tariff reductions under the trade agreement" (Boyer).
Ceding Power to the WTO in Geneva to Invalidate US Laws or Impose Perpetual Trade Fines
The second point by Mr. Nader and other opponents of the WTO deals with the removal of national sovereignty as a specific concept. This may be the strongest argument against the trade group. In the three adopted Appellate Reports in which the United States served as the defendant, each incident found American laws to be "barriers to trade." Citing one incident, a complaint filed by Venezuela and Brazil, "A single panel considered the complaints of both Venezuela and Brazil. Complaints asserted that a US gasoline regulation discriminated against complainants' gasoline in violation of GATT Articles I and III and Article 2 of the Agreement on Technical Barriers to Trade (TBT)" (www.wto.org [dispute]). For the first time since America's independence, an existing US law was found illegal by another governmental entity. The original US gasoline law was a preventative measure against "dirty oil." Simply stated, the oil from Brazil and Venezuela had significantly higher levels of pollutants than are allowed by the Clean Air Act. Our options, according to William F. Buckley, are that, "We can resign from GATT, which would be a long-term invitation to restricted trading; or we can pay the fine or compensation on the Brazilian and Venezuelan oil; or we can modify the Clean Air Act to exempt the privileged producer of the dirty oil" (Buckley).
Not only is the first ruling by the WTO's DSB and Appellate Body against the United States, it is an environmentally unsound ruling as well. Instead of raising standards for import and export products, which ensure better and safer goods for consumers, laws must be "dumbed-down" in order for those without the GDP to provide for "fair, free trade." Our new global government believes in quantity over quantity, and we can do nothing to prevent it.
At the same time, if domestic regulations are found illegal or "unfair" by the DSB, then those same domestic regulations must be reduced here, i.e. domestic producers will either make lesser quality goods or the premium goods to which we have grown accustomed will be unaffordable.
Replacing Democratic Powers Residing in the US Government with the Autocratic Authority of a World Government
Massachusetts is currently under heavy pressure from the WTO as the subject of two pending consultations. The first complaint comes from the European Communities, while the second comes from Japan. Each takes issue with Massachusetts' 1996 legislation entitled Act Regulating State Contracts with Companies Doing Business with Burma. According to the WTO, "The Act provides, in essence, that public authorities of the Commonwealth of Massachusetts are not allowed to procure goods or services from any persons who do business with Burma" (www.wto.org [dispute]). Both the European Union and Japan filed complaints on the basis that as an American state, Massachusetts is under the same obligation as the United States as a whole, and if Massachusetts refuses to comply with the agreement, trade benefits to the United States are nullified.
Safely predicted, when the DSB in Geneva convenes to hear arguments, it will act as it has in the past. Anti-US rulings will continue, and our government will be ruled from Switzerland.
Stripping Citizens of Any Voice and Control over the Decisions of the WTO, with its One Nation, One Vote that Permits Two Dictatorships to Outvote the United States
All members of the WTO have equal voting power. Unlike the United Nations, there is no Security Council veto power. Fundamentally, the United States has no leverage against other members (Buckley). As often as the United States has acted as the prosecutor since the initiation of GATT as well as the other numerous international unions, it is highly conceivable that we will now become the runt of the litter. Bangladesh, Ethiopia, and Costa Rica can now become as powerful as the United States has been in the past.
Enabling the Foreign Regulation of US Health, Safety and other Living Standards
Certain people even within the food industry believe the deregulation of food products by the WTO is a worthwhile endeavor. Some believe that as quotas and tariffs on agricultural products were lifted and will continue to do so until 2001, a motivation was created among protectionist food producers to use food standards as trade barriers in the production and processing of agriculture. These people argue that The DSB will maintain strict guidelines for proper food safety. At the same time they admit that, "US food standards reflect US consumers’ desire for safe, nutritious food," and that not only do US standards require the labeling of nutritional information, but even other government requirements prohibit the use of pesticides shown to be harmful to consumers (Neff).
Taking into consideration the previous WTO rulings against the United States, for example the "dirty" gasoline from South America, is it even probable that our standards would not be challenged? If contested, is it not likely that US criteria would be found "too strict" or "barriers to free trade?"
One Active Panel and one Pending Consultation currently reside with the WTO dealing with this issue. Both complaints against the United States, one filed by India, Malaysia, Pakistan, and Thailand (with Australia, Columbia, the EU, Singapore, Hong Kong, Guatemala, Mexico, Japan, Nigeria, and Sri Lanka reserving third-party rights) and the other by the Philippines, regards a US ban on importing certain shrimp and shrimp products from the countries and the processing methods used by the named countries. The WTO released, "At its meeting on 10 April 1997, the DSB agreed to establish a panel in respect of India’s request but agreed to incorporate this with the panel already established in respect of the other complainants" (www.wto.org [dispute]). That WTO is placing all cases together in witch the United States is the defendant! Neff and Malanoski are convinced the new system is for fair trade, but the US cannot even receive a fair trial.
Conclusion
Our scorecard is now complete, and the winner is the WTO opponent with a record of 4-0-1.
WTO Scorecard |
PROPONENT |
OPPONENT |
Replacing Democracy with Autocracy Loss Win |
Loss |
Win |
US Domestic Revenue Loss |
Tie |
Tie |
Ceding Power to the WTO Loss Win |
Loss |
Win |
Stripping Citizens of Any Voice Loss Win |
Loss |
Win |
Enabling Foreign Regulation Loss Win |
Loss |
Win |
America is in a time of distress. Its home rule is being removed each day by a one-world government and all of the nations that comprise its membership. The United States initiated the original GATT conference in 1948. If the WTO’s statement, "As the more mature WTO developed out of GATT, you could say that the child is the father of the man," is correct, then the child wants to cause his grandfather’s death. That death seems to already be beginning. Our "scorecard" demonstrates that notion. From the possible loss of US domestic Revenue to the currently demonstrated trends of ceding American national power to Geneva, to replacing US democratic government with a foreign autocratic regime to enabling foreign regulation of previously enacted national laws, all that is the World Trade Organization is controlling all that is America.
Jeremy Rabkin quotes Speaker of the House Newt Gingrich as saying of the WTO, "I am for world trade but I am against world government," and Patrick Buchanan even more stiff-handed with, "The glittering bribe the globalists are extending to us is this: access to global markets--in exchange for our national sovereignty" (Rabkin). Let us take leave of the WTO while we still have that chance.
