World Trade
February 2001 EMT
The LWVUS proposed new position on trade was introduced at the January
2001 Unit Meetings. A general concurrence vote on this position will be
taken in February Unit Meetings. Please bring the concurrence form as
well as the complete LWVUS proposed update to your unit meetings.
LWVUS is seeking concurrence from each individual league member on a national
scope. LWVS would also like to track the vote of our membership. Therefore,
if you are unable to participate in this month’s unit meetings, we would
appreciate your filling out the concurrence form and mail or fax it to
the LWVS office so that all votes can be sent to National in a packet.
Mail or fax concurrence forms to:
LWVS 1507 21st Street Suite 303 Sacramento CA 95814 FAX: (916) 447-8620
MORE ABOUT THE PROPOSED NEW POSITION ON TRADE
Topics are organized according to the relevant section of the proposed
position. What follows has been excerpted from LWVUS materials. You are
encouraged to read the complete version in the National Voter or you may
access the information on the Members Only Trade Update section of the
LWVUS website
General Questions:
Q What is globalization and how is it related to trade policy?
A Globalization is often defined as the growing integration of economies
and societies around the world. It refers to the increasing cross-border
flow of goods and services, capital, people (through travel and migration)
and ideas; it can have economic, environmental and cultural impacts.
Q What other LWVUS positions are related to, or affected by, this update?
A The proposed new position is designed to replace the existing 1973 position
on trade in its entirety, including the position on East-West Trade (1965),
which is obsolete. The proposed new position complements the LWVUS positions
on U.S. Relations with Developing Countries (1986), International Development
Assistance (1986), and Private Investment and Commodity Arrangements (1964,
1970) --- as well as the LWVUS position on the United Nations, which is
also currently being updated. The Updated Position on the United Nations
will be presented for concurrence to the Units in May.
Section I
Q What is meant by a "liberal" trade policy?
A In this context, a "liberal policy is one that seeks to reduce trade
barriers and expand trade. It is used in contrast to "protectionism,"
which seeks to restrict trade in order to give an economic advantage to
particular industries, regions or individuals at the expense of the greater
good.
Q What about "anti-dumping” laws? Don’t these also restrict trade?
A" Dumping” is the term used to describe the practice of (1) selling export
products at prices below those charged at home or (2) selling at less
than "fair value” (i.e., average cost plus an allowance for profit). Anti-dumping
laws provide protection for industries competing against such imports
or those subsidized by foreign governments. WTO rules allow countries
to respond to foreign subsidies and dumping (with off-setting duties,
for example) when these have been shown to cause material injury. The
U.S. has made extensive use of its antidumping laws, irritating its trading
partners, and now a growing number of other countries are retaliating
with similar anti-dumping rules, thereby creating new trade restrictions.
While some efforts to apply anti-duping rules arise from legitimate claims
of unfair competition, others are little more than a pretext for increased
trade protection.
Section II
Q How does the position address the right of countries to adopt their
own laws and regulations to protect the environment and the health and
safety of their citizens?
A WTO rules allow wide differences in domestic policies in a number of
areas including the environment, health, and safety, provided that these
policies are not applied in a discriminatory manner. This principle is
spelled out in Article XX of the General Agreement on Tariffs and Trade
(GATT), the series of agreements first negotiated in 1947 and now the
core of the WTO framework.
Article XX says, in part: "Subject to the requirement that such measures
are not applied in a manner which would constitute a disguised restriction
on international trade, nothing in this agreement shall be construed to
prevent the adoption or enforcement by any contracting party of measures:
Necessary to protect public morals, human, animal, or plant life of health;
national treasures of artistic, historic or archaeological value, the
conservation of exhaustible natural resources (or) relating to the products
of prison labor"
Q Why does the position suggest that multilateral trade agreements are
preferable to regional and bilateral trade treaties?
A Progress in reducing trade barriers can be achieved most effectively
in the broadest possible global forum. In the WTO system, member countries
negotiate bilaterally and secretly for the best deal each can get from
each trading partner. All the countries then turn over their bilateral
deals to the WTO Secretariat, which identifies the very best deal that
each country gave to any of its trading partners. That country is then
required to give that best deal to all the other member countries. This
accelerates or magnifies the reduction in trade barriers for the group
as a whole.
Section III
Q Does the proposed position change the League’s approach to fast-track/Trade
Promotion Authority (TPA) for the president?
A The proposed position reaffirms support for advance negotiating authority
for the president and adds an emphasis on the role of Congress in establishing
negotiating objectives at the outset of the process. Congress, with input
from the public, should set trade policy priorities and see to it that
the negotiations lead to progress on environmental and social, as well
as economic, goals. The resulting trade proposal can then be evaluated
in terms of its success in meeting these various goals.
Q Why should Congress not retain the right to amend trade proposals negotiated
under Trade Promotion Authority/fast track?
A Giving the president advance authority to negotiate trade treaties that
Congress cannot later amend facilitates further trade liberalization.
When the U.S. enters into trade negotiations, the countries at the other
end of the negotiating table need to know that the trade package they
all agree to is final. During the negotiations, the package is carefully
crafted to ensure that the benefits that each country gains outweigh the
concessions each country must make. U.S. trading partners need to know
that these sensitive compromises cannot later by picked apart by Congress
and that the entire package will be voted up or down as a whole.
Q Does the position allow the League to take action on the proposed Free
Trade Area of the Americas (FTAA)?
A The position provides a basis for action on a variety of points, including
lobbying for negotiating objectives consistent with the goals set forth
in the position and for an open process that provides for meaningful public
input. Any proposed FTAA treaty would be evaluated in terms of the principles
laid out in the position: whether it is based on the long-term public
interest, the extent to which it leads to progress on environmental and
social objectives and addresses the special needs of developing nations,
whether it recognizes the legitimacy of domestic laws designed to protect
genuine health, safety, and environmental interests, and whether , as
a regional agreement, it serves as a stepping stone to broader trade liberalization.
Section IV
Q How does the proposed position enable the League to address its environmental
and social goals in the context of its support for a liberal U.S. trade
policy?
A The position sets goals for trade negotiations and trade agreements
and provides trade-related strategies for promoting environmental and
social objectives. Legislation authorizing trade negotiations and the
trade proposals, themselves will be evaluated on the degree to which they
lead to progress on the multiple goals set forth in the position. The
specific strategies listed are examples of the kinds of progress the League
would look for in making its evaluation.
Q How does the proposed position address abusive child labor, sweatshops
or slave labor?
A the position supports ratification of human rights and labor rights
agreements promulgated by the International Labor Organization (ILO) and
the United Nations and calls for trade agreements to recognize their legitimacy.
The ILO specifically calls for the elimination of all forms of forced
or compulsory labor and the abolition of abusive child labor. The Position
also endorses Article XX of GATT, which allows nations to adopt policies
relating to goods made with prison labor. The position encourages codes
of conduct, labeling and certification programs, and monitoring and reporting
of countries’ practices and performance, all of which have been used internationally
to discourage abusive child labor.
Q What about Codes of Conduct? A Citizens around the world have become
more vocal in demanding that global business be held accountable for conduct
that could undermine economic, social, or environmental progress. Since
regulation at the national level may make a particular nation less attractive
to global investors, much attention has been focused on promoting global
corporate citizenship through voluntary codes of conduct.
Codes designed to govern the activities of global corporations differ
in their reach and authorship, however, and most lack mechanisms for monitoring
and accountability. Many social and environmental activists, therefore,
continue to insist on enforceable international agreements on the environment
and labor conditions. Individual governments and international organizations
have also attempted to find a middle ground combining voluntary and governmental
initiatives. One of the most promising examples is the OECD (Organization
of Economic Co-operation and Development). Guidelines agreed to by 33
nations that are home to the majority of the world’s multinational corporations.
The Guidelines set up a governmental process to encourage positive business
behavior rather than relying solely on voluntary adherence.
Section V
Q Why and in what ways does the proposed position address concerns about
developing countries?
A Trade liberalization has had mixed effects in developing countries.
In part, this is because the developed world has failed to reduce trade
barriers against the very products that developing countries can produce
and trade most competitively, especially agricultural products and textiles.
Furthermore, the industrial countries have not provided the financial
and technical assistance they promised to help the developing countries
participate effectively in the world trading system. The proposed position
supports a number of strategies designed to address the various special
needs of developing countries.
Q Why is "food security" a major issue for developing countries?
A Food security exists when all people have access to sufficient, safe
and nutritious food to meet their dietary needs and cultural preferences.
Nations must be able to produce enough food to meet these needs and/or
earn sufficient foreign exchange to fill the gap by purchasing food on
the international market. Farmers in poor countries who have no savings
and no access to credit or capital cannot quickly adapt to new technologies,
handle world price fluctuation , or compete with more efficient producers
from developed nations.
The Marrakech Decision agreed to at the signing of GATT 1994 recognized
the possibility that trade liberalization could lead to market instability
and higher food prices that would increase hunger in the least developed
countries. GATT 1994 promised a safety net including food aid, loans,
export credits, and technical and financial aid, but little has been done
so far to provide the promised assistance. The proposed position supports
measures to improve food security.
Section VI
Q How does the position account for the sometimes negative impact of international
trade on some domestic workers?
A The U.S. has two targeted assistance programs for workers whose jobs
have been negatively affected by trade: the Trade Adjustment Assistance
(TAA) program established under the Trade Act of 1974 and a similar NAFTA-TAA
program for workers whose companies are affected by trade with Canada
or Mexico. Benefits include career counseling, job search assistance,
training and extended unemployment compensation payments for up to one
year while in full-time training. Workers may also receive relocation
and job search allowances to seek employment outside their community.
Similar but more limited re-employment and training benefits are available
to other dislocated workers: those who lose jobs due to factory closings
and other massive job losses that are not related to trade.
The proposed position supports targeted assistance and safety net programs
for dislocated workers, whether or not a trade connection can be made.
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