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Together . Québec, The WTO, and What It Means
If you've ever been to Québec, then you're probably familiar with the ramparts, the walls that surround the Old City. The ramparts, of course, were originally constructed for defense -- something with which Québec has become thoroughly familiar in its relatively brief history of European colonization. Sitting high above the St. Lawrence, on Cap Diamant, the city offered a strategic location from which to defend the Laurentian valley, up river. But that meant, first and foremost, defending the city itself. A Brief History
of Québec under Siege
On September 13, 1759, during the French and English War, British Major General James Wolfe attacked Québec, defeating the troops under Commander Louis Joseph de Montcalm. The battle took place on the Plains of Abraham, a large sloping, open field near the citadel. Both generals lost their lives, but the British success marked the end of New France. Four years later, under the Treaty of Paris, the King of France granted to the British crown "the sole ownership of Canada and all its dependencies." would have to withstand one more siege, when the Americans under Montgomery & Arnold tried unsuccessfully to wrest the city from the British under the command of Carleton. The WTO: Colonization, Trade & Conflict Today It is not a particularly flattering history to the Europeans who settled the regions of Canada, the U.S., and, of course, Central & South America, too. And some believe that the proposals on the table at the WTO [World Trade Organization] meeting this weekend {April 20th - 22nd}in Québec may well be nothing more than a continuation of that history.
As the WTO meets, then, Québec is under siege once again . Thousands of demonstrators have arrived in the city to protest the WTO. ... In anticipation of the protests, according to a recent edition of Harper's, Ville de Québec erected chain link fence around more than two square miles of the city. But why? ... What is it that brings these folks from all over the Western Hemisphere to protest the WTO? The shorthand answer most often touted in the media is that the WTO has engaged in a variety of actions that have placed both the environment and workers -- in developing countries, and in the U.S. and Canada -- in jeopardy. That may be true for a number of the protesters. But at least a core group of them realize that a much more compelling reason for trying to stop the WTO has to do with the legal and even constitutional crisis the FTAA proposal -- the centerpiece of this WTO "Summit of the Americas" -- represents. The FTAA
Proposal What is the FTAA? ... In brief, the FTAA would establish a Free Trade zone -- similar to the one which NAFTA [the North American Free Trade Agreement] set up among the U.S., Canada, and Mexico. But the FTAA zone would include the entire Western Hemisphere, meaning Canada, the U.S., Mexico, Central & South America, and all of the Caribbean, with the exception of Cuba, which is the only country in the hemisphere that was not not invited to participate in these summits. As we noted, most of the focus in the media about NAFTA, and now the FTAA, has centered on the free movement of goods across borders, without restrictive tariffs. But of greater concern to many of those protesting the FTAA proposal is what is known as Chapter 11. Chapter 11: An End-Run Around the Rights of
Sovereign Governments The sweeping nature of this chapter was actually strengthened long before the FTAA, or Clinton and NAFTA for that matter. Back in the Reagan years, a series of court cases helped to expand the definition of a term by which corporations were allowed restitution for damages. That term was "expropriation." Prior to the Reagan administration, expropriation had been limited to the actual taking of property, usually land. Under such circumstances, understandably, corporations felt justified in receiving some compensation for their losses. But under Reagan and the Supreme Court, expropriation was expanded to include "regulatory taking." In effect, corporations could now sue for losses arising from government regulation, even if that regulation was enacted for the public welfare. A much earlier attempt at instituting this kind of provision in a trade agreement -- the Multilateral Agreement on Investment [MAI] failed. In fact, since the MAI focused on this kind of corporate prerogative, both the media and those opposed to the MAI focused attention on the provision and brought about its defeat. But this type of provision was exactly what found its way into NAFTA as Chapter 11, representing the first trade agreement in history to contain such a curtailment on the rights of governments to act in the public interest. Chapter
11: An End-Run Around Legal Due Process In fact, such disputes are handled by a tribunal comprised of trade arbiters, mostly trade lawyers. In any dispute, both the country being sued and the one from which the suing corporation originates, each get to appoint one member. A third member is then mutually agreed upon, or appointed by arbitration. For knee-jerk proponents of free trade, all this may sound at least tentatively reasonable, until one looks more closely at the other provisions. At that point, it becomes next to impossible to advocate both for free trade and for democracy and the sovereignty of constitutional government. For instance, governments do not have the right to appear before the tribunals during proceedings, even if it is that government's laws and regulations that are being directly challenged. Instead, the government must apply to the tribunal for 'intervener' status. In addition, others who may be directly affected by the proceedings -- including citizens of the country whose laws or regulations are being challenged, or groups who may represent their interests -- are also not allowed to appear. Guilty Until Proven Otherwise
Such a situation, i.e., presumptive guilt, places the onus on the member charged to prove that it did not violate the terms of the agreement. And, as anyone who has ever argued -- whether before a court or at the kitchen table -- knows, proving a negative is significantly more difficult than proving an affirmative case. The Constitution recognizes this and places the burden of proof in criminal cases on the prosecution, where it must prove its case "beyond a reasonable doubt." And even in civil cases, where the criterion is more lenient, there is still a requirement for what is called "the preponderance of the evidence" to fall to one side or the other before a determination can be made. NAFTA Provides the Map to the Territory But beyond those kind of ill effects, there are the corporate suits under Chapter 11 of NAFTA that have already taken place. To be sure, no one, at least no one who'll say, knows exactly how many cases have been heard by the tribunals described earlier. But some of the cases --15 to date -- have made it to public attention. Among them ...
The UPS case is particularly critical, since it has broad implications for a variety of services -- both in Canada and elsewhere -- where a monopoly may arguably exist, e.g., in public education, public health programs like Medicare & Medicaid, public transportation systems, or other public utilities. Proponents of the free trade agreement say there is no need for conern, because of GATS, the WTO's General Agreement on Trade in Services, which supposedly protects local, state, or federal government services from suit. However, the definition of such services under GATS requires that they be "entirely free" and not in competition with any commercial suppliers. Some time before a GATS agreement could be reached, Charlene Barshefsky, the U.S. Trade Representative, asked the Coalition of Service Industries, an industry lobby, what it would look for in a comprehensive GATS agreement. The European Commission did the same with the European Services Forum. Between them, the following priority areas for trade liberalization in services were identified: health care; hospital care; home care; dental care; child care; elder care; primary, secondary and post-secondary education; museums; libraries; legal services; social services; architecture; energy; water services; environmental protection services; real estate; insurance; tourism; postal services; transportation; publishing; broadcasting and others. Of course, in the U.S. many of these services are not public sector, although public money does funnel to most of them. But, since just about all public services have some costs involved -- think of your water bill, or the fees for museums, trasnportation, health-care co-payments ... or even the occasional fees charged for school functions -- there is no reason to think that NAFTA or the FTAA do not pose a very real threat here. Under the terms of Chapter 11, already there in NAFTA and expected to be there under the new FTAA, foreign corporations with "investor-states" status could successfully argue for the opening up of all these services, or seek damages for lost profits for a failure to do so. Conclusion: No End In Sight In the face of NAFTA, numerous citizens advocacy groups and labor unions tried, without success, to keep that agreement from being signed. The same will probably happen here. What it's short- and long-term effects will be can be reasonably guessed at from the short history of NAFTA to date. But those of you who may still be wondering whether it's a good idea might want to hear from someone a little closer to the action. ... It has not been only the protesters, evidently, who have reservations about the FTAA and, particularly, about the inclusion of a clause similar to NAFTA's Chapter 11. Canada's Trade Minister, Pierre Pettigrew, went on record on December 13th of last year to say that he would not sign another trade agreement if it contained a Chapter 11 equivalent. ... Since his remarks, he's asked both he U.S. and Mexico about changing Chapter 11. But, to date, the US has shown no concern about it, and Mexico has refused to consider a change, fearing that the U.S. might then seek other changes in NAFTA that would harm Mexican interests. ... And what about the FTAA negotiations? ... To date, no country other than Canada has expressed any concern about a Chapter 11 clause. . Lou Colasanti, Editor. . ******* ******* If you would like to submit something for our Working Together section, don't hesitate to let us know. Simply e-mail us at work@downstreetmagazine.com. The e-mail should contain your name, address, and a phone number where we can reach you. You may also send a copy of your proposed article. The text can either be included in the body of the e-mail, or you can send it as an attachment in just about any word processing format. If your piece is accepted, we will pay a small honorarium for your interest & your time. [See Freelancers Wanted for more details.] ******* ******* If you would like to advertise in this section, or throughout the magazine, please visit our Advertising Info Pages ... or call, write, or e-mail ads@downstreetmagazine.com. ******* *******
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