The World Trade Organization (WTO)


Every ruling of the WTO proves that the institution is fundamentally flawed, designed to place corporate profits above the need to protect our environment, our health and our democracy.

The World Trade Organization was established in 1995 following the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) negotiations. The WTO transformed the GATT, which focused primarily on tariff and quotas, into a new global commerce agency with the same legal status as the United Nations.

The WTO is empowered to enforce global commerce rules with the imposition of economic sanctions. The WTO's rules cover food and environmental standards, regulation of services such as insurance and transport, how the government can use tax dollars, copyright and patent law, farm policy, and more.

The WTO expands key aspects of the North American Free Trade Agreement (NAFTA), to the entire world. Like NAFTA, the WTO vests panels staffed by trade bureaucrats with the power to enforce its binding rules. And like NAFTA, WTO rules may challenge a country's laws if they pose barriers to trade and investment.

The WTO's tribunals conduct WTO challenge cases in secret. Even briefs from the public are only accepted by WTO panels if endorsed by a government. Furthermore, only national governments are allowed to participate, so a state attorney general could only assist with defense of a challenge against a state law, if invited to do so. A government that has lost a WTO case has no recourse to appeal outside of the WTO. Once a final WTO ruling is issued, losing countries have only three choices: change their law to conform to the WTO requirements, pay permanent compensation to the winning country, or face trade sanctions.


The WTO's Record on Public Health and the Environment

Every public health or environmental law challenged under the WTO has been ruled to constitute an illegal barrier to trade. Among the WTO's casualties:

* Clean Air: A regulation of the Clean Air Act enabled the government to set a mandatory gasoline cleanliness standard for oil refiners. This law was applied equally to foreign and domestic refiners in the interest of minimizing air pollution. After the WTO ruled that the law violated GATT rules, the U.S. amended the rule, allowing in less clean gasoline.

* Artificial Hormone in Beef: The European Union (EU) has a public health ban on beef containing artificial hormones. In May 1997, a WTO panel declared that the European Union's ban on imports of beef produced with artificial growth hormones violated international trade rules and was consequently illegal. Not only was public health risk disregarded by the WTO under the cover of free trade, but so was the popular will. For the law's principal purpose was to meet widespread popular concerns among European consumers over chemicals in food. With its ruling, the WTO has shown that it has the power to go over the heads of democratically elected governments to decide what health or environmental rules have a 'valid' scientific basis.

* Endangered species: The US Marine Mammal Act placed an embargo on tuna caught with dolphin-killing methods. It was denounced by Mexico as a protectionist trade weapon designed to close markets to foreign competitors. Rather than reform its practices, Mexico sued the US and succeeded in having the law declared illegal under GATT rules, under the pretext that the way in which a product is produced may not be used as grounds for trade discrimination.

The U.S. Endangered Species Act bans the import of shrimp from the U.S. or abroad caught without inexpensive devices that protect endangered sea turtles from slaughter from shrimp fishing nets. The WTO ruled against the U.S. law because it was an illegal encroachment on the sovereignty of other governments for the U.S. to set rules for what can enter the U.S. market.

It has been estimated that 80% of America's environmental legislation could be challenged and declared illegal before WTO panels.


The WTO on Labor Rights and Standards


The WTO effectively marginalizes labor issues by relegating them to the International Labor Organization (ILO) ­ a body with weak enforcement capacity (unlike the WTO), and sets up an adversarial relationship between trade objectives and labor policy objectives. For instance, under WTO rules it is illegal for a government to ban a product based on the way it is produced. Thus, even if a WTO member has laws prohibiting domestic child labor, it could not choose to ban imported items made with slave or child labor, both of which are prohibited by the ILO's core labor standards.

Local and State Regulations

Regulations requiring that imported products meet local standards on such matters as recycling, toxic substances, labelling and meat inspection could all be subject to challenge by the WTO. Conservation measures that restrict the export of a country's own resources, such as forestry products, minerals, and fish products, could be ruled unfair trade practices, as could requirements that locally harvested timber or other resources be processed locally to provide local employment.

Local interests are no longer a valid basis for local laws under the WTO regime. The interests of international trade, which are primarily the interests of transnational corporations, take precedence.


Flawed Institution

Every ruling of the WTO proves that the institution as it stands is fundamentally flawed, designed as it is to place corporate profits above the need to protect our environment, our health and our democracy.

Politicians must accept that in order to govern in the public interest they will have to curb the destructive activities of big business and its perceived right to make profits at any cost. Until they do, the list of essential laws struck down in the name of free trade will continue to grow even longer.

World Trade Organization