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WTO membership is a trade-off for nations
Monday, October 18, 1999
By BRUCE RAMSEY
On Aug. 20, Sir Leon Brittan wrote Charlene Barshefsky that the proposed U.S. harbor tax was illegal and that he might take the matter to court.
Brittan, the trade representative for the European Commission, was threatening Barshefsky, the trade representative of the United States, to take the case to the World Trade Organization. At issue was whether a proposed tax on ship operators would fall unfairly on foreigners.
When critics of the WTO argue the issue of sovereignty, this is the sort of thing they're talking about.
Who's in charge here?
Take the case of Venezuelan gasoline. The United States set environmental standards for imported gasoline. Venezuela objected at the WTO, and the United States agreed to modify its standards for gasoline.
The WTO's gasoline ruling shows how the WTO undermines "the power of nation-states to make laws and do them in the way that serves their environmental interests, public health or even economic interests," said Jerry Mander, president of the San Francisco-based International Forum on Globalization.
Linda Hume, professor of trade law at the University of Washington Law School, disagrees. "To the extent that people have said we're losing our sovereignty, they're not correct," she said. "Those environmentalists offend me."
The WTO leaves nations free to set environmental standards but requires that they treat domestic and foreign producers the same, she said.
To WTO defenders, this is a rule of fairness. But it is still a rule. Does any rule lessen the U.S. government's sovereignty?
No, say the defenders. "These agreements are contracts between sovereigns," said Peter Morici of the Economic Strategy Institute in Washington, D.C. "We agree to do certain things if they do certain things." It's like a fishing treaty or the Kyoto protocols on greenhouse gas.
The WTO is a club of sovereigns. When WTO Director General Michael Moore was in Seattle last month, he explained that the WTO's agenda was up to the different ambassadors. "I do what they tell me."
The WTO has a tribunal to settle disputes. In some ways it is like a court. "If you and I have a contract, and I breach the contract, you can take me to a court," Morici said. "If I'm ordered to settle, and I don't settle, the judge can send a sheriff out to auction off my house. The WTO has no sheriff. There is no super-sovereign."
Brink Lindsey, director of trade policy studies at the Cato Institute in Washington, D.C., said, "The only thing the WTO can do is to authorize some other country to impose trade sanctions. And that authority is a power they had before they entered the WTO. The WTO doesn't give them any new power."
Former federal judge Robert Bork wrote, "Under our constitutional system, no treaty or international agreement can bind the United States if it does not wish to be bound."
What if it does wish to be bound? Even if the United States has the right to thumb its nose at a WTO tribunal and lose access to some market, or to pull out of the WTO after six months' notice, it does not intend to do those things.
It intends to stay in.
And being in affects what government does.
The basic promise each WTO member makes is not to discriminate against other WTO members. That point is what the United States used to accuse the Europeans on bananas: The Europeans were discriminating in favor of the Caribbean countries. The Malaysians and Thais accused the United States on shrimp because the U.S. was discriminating in favor of Caribbean countries.
A promise not to discriminate limits the power of the violator. But it may enhance the power of the accusing party. For example, WTO rules make it difficult for the United States to ban the import of pond-raised shrimp to protect mangrove forests in India. That limits American power. But it enhances the power of India.
Critics of the WTO argue that this works more against government than for it and is a blow to local government. "That a treaty obligation can be cited by a company seeking to avoid regulation will have a chilling effect on a local government's inclination to pass the law," said King County Councilman Brian Derdowski.
Many critics focus on what they hypothesize could be done, not only under the current WTO agreement, but under future ones.
These arguments tend to extrapolate from NAFTA, a stricter agreement than the WTO, or the proposed Multilateral Agreement on Investment, which would be stricter still.
Unlike the WTO, NAFTA allows companies to sue governments and get paid for regulatory "takings."
The investment agreement, which was negotiated by the rich countries, would grant investors even more extensive rights than NAFTA. Critics said its protection of property would go beyond that offered by U.S. courts. The investment agreement was abandoned last year, and the United States is not pushing it in the WTO. The poor countries oppose it. Several countries, including Switzerland, South Korea and Japan, want investment to be on the agenda.
Both NAFTA and the investment agreement, wrote Georgetown University professor Robert Stumberg, are "major steps in the evolution of 'sovereignty,' the power of a nation-state to govern without limits."
Much of the controversy over this boils to the familiar one about government regulation of business. The WTO widens traders' zone of freedom, keeping the power of 135 world governments to interfere with them within some limits. They like that. Those pursuing other values tend to resent it.
On this issue, left and right often sound much alike.
The WTO is "a supranational legal system for corporations, outside our constitution and courts," said Seattle campaigner Sally Soriano.
"We would like to see nation-states and communities recover some of the power they've lost," said Mander of the International Forum on Globalization.
"Our sovereignty is more important than our trade. America is about more than money," wrote Patrick Buchanan.
The labor movement and moderate environmental groups want to add their priorities to the WTO's agenda. That could increase the outcry over the WTO and sovereignty.
It is an issue that goes back to Woodrow Wilson, whose great cause was to get nations to settle their differences in new international forums.
"One of the charges that people make against the WTO is that it's very Wilsonian," said Brewster Denny, retired dean of the University of Washington's School of Public Affairs. "You bet your life it is."
Denny sees the sovereignty issue as something real. "It is part of the world in which we are entering -- and, I think, without a plan," he said. "It is one of the evolutionary things, happening not by design. Very slowly you are seeing a growing acceptance of the notion that the international community has some rights to intervene in the internal affairs of sovereign states.
"It's all part of that question, do we really want to be part of the international community?" he said. His answer is yes. But he warned that not all decisions will favor the United States. "Once in a while we'll have to gulp and say, 'Whoops. I wish that wouldn't happen to us.'"
P-I reporter Bruce Ramsey can be reached at 206-448-8391 or bruceramsey@seattle-pi.com
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