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Herein History of Fast-Track
Mr. Albert R. Hunt
Wall Street Journal
1025 Connecticut Avenue, NW
Suite 800
Washington, DC 20036
August 4, 1997
Dear Mr. Hunt,
You and Ralph Nader and I have discussed the trade issue before. You noted
to me that on so many issues you had the same position as Ralph, but that
on trade you had a different view.
Of course, differences of opinion are an inevitable part of national
policy issues -- but, after reading your piece in today's WSJ, I wanted to
make sure you had the correct facts in determining your position. A few
things you wrote were simply not so:
1. Fast track is mostly about how Congress will consider the domestic
legislation implementing trade agreements, not about the international
trade negotiating authority itself. As you know, the Legislative branch has
exclusive constitutional jurisdiction over the regulation of foreign
commerce in the Constitution. The Executive has exclusive jurisdiction over
interactions with foreign sovereigns. Thus, some delegation by one branch
to the other has always been necessary to negotiate trade pacts that
necessitate changing existing U.S. domestic laws regulating international
commerce. Starting with the 1933 Tariffs Act, the Congress delegated
extended time-period chunks of authority to the Executive to negotiate
tariff cuts within certain parameters (ie. maximum 25% in 10 years
time...). Under this delegation, the Executive has the authority, without
returning to Congress, to "proclaim" changes to tariff rates within these
parameters.
Indeed, the Executive has the capacity to negotiate with foreign
sovereigns right now. Your statement that absent fast track, no "major
trade deals are possible" is simply factually untrue. This is evidenced by
and an explanation for how the Administration has engaged in the past two
years and this year's continuing APEC talks, has almost finished the
Multilateral Agreement on Investment (MAI) that was to have been done May
1997 and is now a 147 page almost-finished-text, has completed the
highly-touted ITA in Singapore, is negotiating the WTO Financial Service
Agreement followed in the news pages of your paper, did the Telecomm
agreement and all of the Japanese Sectoral agreements celebrated loudly in
the past five years. The only question is under what terms the Executive
must relate to the Legislative when such negotiations require changes to
existing law -- and by relate I mean both consider what Congress and/or the
broader public desires as an outcome and also under what rules any changes
to existing legislation will be considered.
2. Indeed, fast track does not "simply give the president the authority to
negotiate..." What it does is create a legislative procedure totally unique
to trade that requires Congress to agree, before seeing any text or for
that matter before negotiations have even been started, that when a trade
pact is finished at some unknown time in the future, whatever future
Congress is then sitting will be bound to a closed rule (ie. no
amendments), 30 hours of debate, and an up or down vote on legislation
written by the Executive branch within 60 legislative days after that
legislation is submitted to the Congress. That legislation, which in the
case of both NAFTA and GATT numbered thousands of pages, made hundreds of
amendments needed to conform our existing laws with the trade texts. What
sort of laws got changed? Everything from the safety standards for imported
poultry from Mexico to chunks of our insurance regulations to part of the
CAFE standard to federal government procurement rules to consumer labeling
rules to.. Well, you get the picture.
Mr. Hunt, there is simply nothing like a piece of legislation having such
a deep and diverse impact being excluded from all of the normal democratic
procedures of our Congress in any other area of U.S. law or practice. Even
the budget process, which provides for a closed, "privileged" vote in the
end, is based on legislative texts that have gone through full
congressional committee hearing and mark up process.
3. How extraordinary is fast track? It has only been used fives times since
created in 1973 by Pres. Nixon: the Tokyo Round of GATT, the US-Canada FTA,
the US-Israel FTA, NAFTA and the Uruguay Round. Ah, you might inquire, but
I just read USTR Barshefsky's recent Ways and Means testimony or that of
Kantor in the past that lists and celebrates the MANY trade agreements
completed by the Clinton Administration. How did they do all of that if
fast track has only been used twice in the Clinton Administration? That's
the point! I have enclosed one list of 200 such agreements Mickey was
bragging about in 1995. Two of these used fast track. Since then, you will
recall Charlene has negotiated and seen implemented the big, multilateral
ITA (International Technology Agreement) and the Telecomm Agreement and in
the area of bilateral and plurilateral agreements numerous others including
the two Japanese Auto Agreements. As well, currently, the US is close to
completion on negotiations of the Multilateral Agreement on Investment, and
deep in the talks on the WTO's Financial Services agreement and assorted
parts of APEC.
4. Again, fast track is about how Congress will consider changes to U.S.
domestic laws that trade negotiations might make necessary to conform US
law to the pacts. It might be easier for the Executive branch to go to the
negotiating table free from consideration of how the specifics might play
at home. However, they are supposed to be negotiating in the public
interest -- which means a balance like we have in domestic policy-making
between commercial interests and sometimes countervailing environmental,
health or safety goals. Fast track is a legislative laxative that is bad
for our Constitution. You have seen how it goes. A lopsided agreement --
that in any domestic context would be seen like some Dickensian
deregulation fantasy changing hundreds of existing laws -- is rammed
through Congress without debate or review with the President howling about
his prestige in the world's eye being at stake.
And talk about "special interest bazaar!" Please find enclosed our report,
"NAFTA's Bizarre Bazaar" on what it took to get those last NAFTA votes in
1993. In fact, as was seen again in 1994 with the GATT Uruguay Round, fast
track is like a pork super glue. Once some special deal is in the
implementing legislation of a trade agreement, there is NO amending it out.
Thus, one foreign auto company got a multi-million dollar tax break in the
GATT implementing legislation, a certain cellular phone interest was given
a special deal, pension liabilities for certain companies were relieved,
etc. These items had nothing to do with implementing the text of the
Uruguay Round.
5. And, given that today's trade agreements are no longer just about
tariffs and quotas, the total, extreme delegation of congressional
authority represented by fast track simply is no longer appropriate now.
Look at the NAFTA text: it sets standards for the pesticide residues on the
food your kids will eat; how intensely border meat inspection can be
conducted without being a trade barrier; the length and weight of trucks
that will travel in North America; how your local tax dollars can be used
for instance in forbidding performance requirements like recycled paper
content in government procurement.
Do you know for what use Nixon came up with fast track in the early 1970s?
It is not the story you painted in your column. The real story is that
under the 1933 Tariff Act, the trade negotiating authority delegation did
not cover non-tariff issues at all. During the Kennedy Round of GATT
negotiations -- those previous to the mid-70s Tokyo Round -- the first
non-tariff issue arose in trade negotiations. It had to do with
standardizing customs classifications. I believe it was Pres. Truman who
was informed by Congress that he needed to obtain specific congressional
approval for the necessary changes to U.S. statutes setting the tariff
classification system. The Executive branch did not do this and instead
used its existing proclamation authority to "declare" the law changed. As
you can imagine, this did not go over well. There was a specific
congressional vote (which was not necessary) to show support for the
Kennedy Round itself -- but to also announce that the Customs
Classifications could not be changed but through congressional action. This
bit of turf war was then used by Nixon (there is a very interesting history
of fast track in an old law review article from the `70s I have filed away
someplace about how he got international allies to do a little campaign on
how unreasonable it was to negotiate with the US) to propose an amendment
to the existing proclamation authority to specifically allow the President
to proclaim changes to actual laws as needed to conform them to trade
negotiations. And, as you can imagine, this also did not go over well -- to
say nothing of some rather major constitutional problems it would have
posed. The "deal" that got cut in this turf war is the procedure we now
call "fast track." However -- the entirety of the non-tariff issues it was
to cover was that customs classification and a non-binding agreement on
"Technical Barriers to Trade."
Today's trade agreements include the most fundamental areas of domestic
law and policy which are clearly the bailiwick of the Congress. Whatever
you think of the economic pros or cons of that set of trade rules called
NAFTA, the issue at stake with fast track now is one of democratic
accountable governance.
Why has this pending request for fast track become such a major issue?
Because the Clinton Administration is insistent on sticking to its status
quo trade policies modeled on NAFTA. That model, in its real life
implementation, is not proving to be very suited to the current realities
of globalization. We have a 19th century trade theory giving a name to a
mid 20th century trade policy which no longer finds the economic,
technological or political premises on which it is based to be existent.
You may as well call the status quo model corporate managed trade -- it
deregulates environmental, labor, human rights, and health standards. It
puts in place intellectual property restrictions which, in NAFTA, are
enforced through criminal penalties for "free trade" in patented medicines
or technologies. It provides standing for corporations to directly sue
governments for cash damages for taking any action "tantamount to
expropriation." Does that sound like some far fetched global takings
clause some anti-government paranoid would dream up? It is Article 1110 of
the NAFTA Investment Agreement, under which Ethyl Corporation is suing the
government of Canada for $251 million claiming that a parliamentary debate
on possibly banning Ethyl's gas additive MMT (banned in several US
states...) was tantamount to an expropriation because it hurt their
product's good name.
Many, many, many members of Congress, organizations and individuals have
talked to the Clinton Administration about why they must replace the old
status quo with a forward-looking new trade policy for our future. Such a
shift will also require a change in the nature of the congressional
delegation and implementing legislation approval process. In the end, the
Administration has proved to be much more interested in being able to claim
new negotiating authority and completed pacts than good negotiating terms
or agreements. I would imagine that is why Members of Congress from both
parties who were with them in 1993 on NAFTA are now against fast track to
expand the NAFTA model. I would also imagine the public's interest in a new
trade policy has something to do with the regularly negative polling about
doing more of the same.
Please do not hesitate to contact me if you have any questions or comments
about this letter or the materials enclosed.
Sincerely,
Lori Wallach
Director
Public Citizen's Global Trade Watch
****************************************************************************
/s/ Mike Dolan, Field Director, Global Trade Watch, Public Citizen
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