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Lori Wallach discusses the impact of unfair trade rules such as those of NAFTA and the WTO, established in 1994 and 1995 respectively. She gives examples of how biased trade regulations can affect the interests of different member states, including such instances as baby food sold in Guatemala, foreign-owned patents in India and hormone-treated meat in Europe. Any multi-national corporation can effectively challenge any country in which it operates at a WTO court. Countries are forced to comply by the threat of trade sanctions. As a result, government authority is weakened and corporations are empowered.
- Free Trade—The Price Paid (Part Two)
- Running time
- 5m 36s
- Washington DC, USA, April 13, 2005
- Marcus Morrell
- About Lori Wallach
- Director, Global Trade Watch
Lori Wallach is one of the best known and most vocal critics of many of the trade agreements associated with corporate globalization. She is the Director of Public Citizen’s Global Trade Watch, a non-profit organization founded in 1995 to promote government and corporate accountability in the globalization and trade arena. By profession a trade lawyer, she has written a number of books and articles on trade and her comments have been widely broadcast on CNN, ABC, CNBC and CSPAN.
Now the implications of these agreements, which again aren’t about trade, are so broad that the implications are very different in different countries. So for instance, in India where the Constitution explicitly forbid the patenting of life forms or medicines or seeds, they’ve been required to implement the WTO agreements to basically change in the world’s largest democracy and put into place patent laws that basically violate what the Constitution says, or the country of Guatemala, which was one of the countries that had done one of the best jobs implementing the so called UNICEF Nestlé’s Code, this was the code that was developed after lots of citizen campaigning that had to do with the plain marketing of breast milk substitutes, so baby formula, there used to be very tricky labeling of fat babies so that illiterate mothers would be tricked into thinking it was better to use the formula instead of breast milk, and then after a couple of weeks, their milk would dry up, they’d be hooked on having to buy this stuff, and then they killed their baby, because when you mix dirty water with formula, the baby dies from infant diarrhoea. So this was like a catastrophe, a global, just catastrophe of unneeded child deaths, and there was this huge campaign, and Guatemala implemented this health treaty, World Health Organization UNICEF treaty, into the domestic law, and they were a poster child for decreasing infant mortality. In comes the US saying, excuse me, we’re here representing Gerber Baby Foods, and under the WTO’s intellectual property agreement, they have a trademark on the fat baby face, and we’re so sorry, but you’ll have to allow them to violate your domestic law implementing your health treaty because your WTO obligations require you to allow the fat trademark baby face even though it violates your health treaty and your domestic law, so you can either do this now in advance and we will save you the million dollars you’re trying to defend your law to WTO, or else we’ll take a formal challenge and make you do it.
Well, unfortunately, as is the case now, ten years into the WTO, almost any time a company gets a country to file one of these attacks, because in fact, that’s how it works, a country can challenge another country’s laws as not conforming, and then the country that loses has to change their law or faces permanent trade sanctions. Now when there is a threat basically, particularly in poor countries, the country just says, I give up, I’ll change my law. And not just poor countries, I mean there’s a classic European Union one like that where the US basically threatened to challenge of the ban on a particularly inhumane kind of fur trap that was banned all across Europe, it’s allowed in some US States, they’re just like a dreadful torture device, and in this instance, the European Union, after the thing had gone through the union, through the commission, the parliament approved it, it was ready for implementation, and like inches before it was actually going to be published, the US and the EU negotiated for a one year delay, then a three year delay, and now it just basically died in the cradle, and this humane trapping law directive EUI had gone through everything, has never gone into a fact because of a WTO threat. Similarly, Korea basically threw out two important food safety laws after the US threatened to challenge them. They said, don’t even bother, we’re not even going to defend. Meanwhile, there have been 90 formal cases of trade challenges where one country goes after another at the WTO, and in that record, there is only one case when environmental health, a public interest protection was ever saved. In every other instance, they were struck down. So the US implementation of the CITES Treaty on endangered species through our Endangered Species Act was struck down. Our Clean Air Act regulations and the cleanliness of gasoline were struck down with the WTO. The European ban on artificial growth hormones in meat was struck down as a WTO violation. These are all non-discriminatory things where a country just said, in Europe they said, we’re not eating meat containing artificial growth hormones. Our farmers can’t use it, you can’t import meat that has it, we’re just not eating it. It’s not discriminatory, just doesn’t, we’re not treating foreign goods differently. It’s just we’re not eating that stuff. We’re not sure what it does to you and we don’t want to find out the hard way, so keep it out. Well, you can’t do that under the WTO. The US won that case on behalf of the Beef Cattlemen’s Association. Same thing, the Caribbean banana trade system that had been negotiated with the European Union was struck down in the WTO, basically saying, no, you can’t have a development agenda, you have to follow exactly the trade rules word for word.
So law after law, country after country. India’s basically law saying no patenting of life forms, drugs and seeds, struck down. So all of these different important laws and policies, and in fact any time there’s a leading edge policy, right now Europe is rewriting chemical, a chemical regulation through a program called REACH, which will basically require the registration of every chemical that’s used in a certain volume. What most people don’t realize is that all of our countries’ chemical regulations went to effect basically only going forward. So if there was already a chemical on the market in the 70s or 80s when a European or a British or a French or a US law went to place, then the testing and registration requirements only went forward, so everything that was already on the market was in grand fathered. We have no idea what some of those things do, and we’ve accidentally found out some of them are actually quite deadly, so the idea is to actually test everything that you use over a certain volume. So for things you just use a little of, those are outside the law, but anything that’s a major volume chemical, it doesn’t matter if they started using it in 1918 or in 2001, has to be tested, and for those that are most hazardous, there’s a special system, but for the other ones, you just have to list what’s in them and make sure they’re safe. Well, the European industry, chemical industry has gotten in cahoots with the US chemical industry and the US trade representative to basically blow up this law by claiming to WTO violation before it ever gets implemented. Well, this is the law that should set the forward pattern for all the rest of the world. The US needs to update our laws. Our laws are totally backwards. You guys actually in Europe are going to do it right first, and then we should follow. Instead, the US industry is using the WTO to kill it. So this gives you some idea of the so called free trade regime, and it has very little to do with trade, and it’s certainly not free.
— Lori Wallach
- Lori Wallach: Free Trade—How Free Is It?
- Lori Wallach: Free Trade—The Price Paid (Part One)
- Trade, Economy, & Related Issues
- Free Trade and Globalization
- A Primer on Neoliberalism
- Criticisms of Current Forms of Free Trade
- WTO Doha “Development” Trade Round Collapse, 2006
- More by Lori Wallach, from Big Picture TV