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NAFTA, CAFTA, and the WTO

By Henry Lamb
web posted August 1, 2005

These acronyms, NAFTA, CAFTA, and the WTO, are a weird blend of alphabet soup that provides nourishment for almost all participants - except the United States.

The people who lost their jobs when 354 textile plants closed, just since 1997, are not nourished by this alphabet soup. The people in Asian sweat shops are.

The farmers in Iowa, and across the country, whose exports are declining, are not nourished by this alphabet soup. Non-American farmers are.

As our trade deficit worsens, our trading partners get healthier, while Americans suffer.

Balance on Current Account

These trade agreements were sold to Congress, and to the American people, as "Free Trade" agreements. Nothing could be further from the truth. These agreements are actually mountains of regulations, developed and enforced by unelected bureaucrats. They are, in fact, agreements by participating nations, to allow unelected bureaucrats to manage trade among the participants.

These trade agreements have extraordinary legal power. The decisions of an appointed international tribunal have the power to force participating nations to conform their laws to comply with the tribunal's decisions - or face economic penalties.

Since these trade agreements are international in nature, and have the force of law, they are actually treaties, which require a super-majority in the Senate for ratification. By calling them "trade agreements," instead of the treaties they are, only a simple majority is needed for passage.

After 10 years of watching plant closings and swelling trade deficits, the administration. and many in Congress, are pushing another Central American Free Trade Agreement - CAFTA. The reasons to stay out of this entanglement go far beyond the adverse economic impacts.

This agreement seeks to create a trade-governing mechanism in the western hemisphere similar to the European Common Market, and its subsequent European Union. The sales pitch in the U.S. claims the agreement will open new markets for U.S. products. In reality, it opens new opportunities for American industry to move to countries where labor costs are a fraction of U.S. labor costs, and where environmental and regulatory compliance costs are almost non-existent.

These agreements open U.S. markets to products produced without the safety and environmental standards, and the attendant costs, that U.S. products must include. That's why an America flag made in America costs twice as much as a flag made in Mexico, or China. That's why the Florida tomato industry evaporated when NAFTA went into force. That's why the American economy is losing its capacity to produce the products Americans need. Each new agreement makes the U.S. more and more dependent upon other nations for the products it requires.

Once the capacity to produce is lost, the possibility of rebuilding that capacity is remote. Consider what it would take to rebuild the steel industry to the level that it could supply American demand. Not only is the cost prohibitive, but the regulatory climate is also prohibitive. It is the regulatory climate that has prevented the energy industry from keeping up with demand. That's why our dependence on foreign sources of energy has continued to rise, from decade to decade.

Congress, and the American people, should realize that the ultimate goal of these trade agreements has nothing to do with what is best for the United States, or its people. It has everything to do with benefitting everyone else. Congress, and the American people, should realize that the prosperity this nation has built is the result of self-reliance, which we should not allow to be traded away.

Finally, there is the matter of national sovereignty. Proponents of these trade agreements praise the dispute resolution process that forces compliance by all participants. They claim this provides a degree of predictability on which business can depend. It also forces Americans to submit to a force of law that was not enacted by elected representatives. This grinds underfoot the whole concept of "...government empowered by the consent of the governed."

When Americans are forced to comply with a ruling of an appointed international tribunal, the idea of national sovereignty goes out the window. This, of course, is prerequisite to the emergence of global governance. NAFTA, CAFTA, and the WTO are more than nourishment for the one-worlders. They are vitamin-packed, steroid-enriched, injections of global governance.

Henry Lamb is the executive vice president of the Environmental Conservation Organization (ECO), and chairman of Sovereignty International.

 

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