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POORLY DESIGNED TRADE AGREEMENTS COST NOT ONLY JOBS, BUT TAXPAYER MONEY

 

Last week, I joined 30,000 Steelworkers in a rally here in Washington demanding that President Bush impose strong tariffs on imported steel. You see, because of an ever expanding list of free trade agreements between the United States and other countries, the steel industry has been under siege by illegally dumped imports, resulting in the export of good-paying jobs.

 

But there is more at stake than the simple ability to import and export goods between countries. These agreements also contain clauses that surrender American sovereignty and our nation’s ability to protect its own citizens.

 

In Arianna Huffington’s February 3, column in the Columbus Dispatch she discusses a rarely mentioned clause buried in the North American Free Trade Agreement (NAFTA): the Chapter 11 clause. According to Huffington Chapter 11 was initially created to redress situations in which companies had their property seized by foreign governments.

 

But the reality is that corporations are using the provision to recoup losses when another country bans their products based on the public interest. In fact, many of the people who helped write the Chapter 11 provision in the first place are selling their services to the highest bidder to help them sue these governments.

 

Reporter Bill Moyers recently aired a disturbing documentary on PBS related to this subject. In it, he quotes a trade lawyer’s advice to the Canadian government that the Chapter 11 provisions are written so broadly that, "(a company) could be putting liquid plutonium in children’s food. If you ban it and the company making it is an American company, you have to pay compensation."

 

That may seem outrageous, but consider the following example:

 

The State of California banned a gasoline additive nicknamed MTBE, because it was seeping into the ground and poisoning the groundwater with cancer-causing chemicals. However, a Canadian producer of the chemical is suing the U.S. government for $970 million. It claims that the banning of MTBE, because of public health concerns mind you, has hurt the company’s profits.

 

Worse, Chapter 11 is being used by companies to reap American taxpayer dollars in cases that don’t even involve international trade.

 

For example in 1995, the Canadian-based Loewen Group, a major funeral home conglomerate, was sued for allegations of fraudulent and malicious business practices. After a lengthy trial which highlighted how the company had set out to ruin a local small business, the jury found Loewen liable and awarded damages to the plaintiff, a local funeral home and insurance operator.

 

However, Loewen later claimed that the Mississippi state court award constituted a violation of the investor’s rights and protections granted by NAFTA. Loewen is seeking hundreds of millions of U.S. taxpayer dollars to compensate their loss under Chapter 11.

 

What is even more disturbing about these cases is that they are ruled on behind closed doors, by a secret NAFTA tribunal and are not subject to appeal. So when a foreign corporation wins a case and collects for loses incurred because they were injuring Americans, we have no legal redress through our court system.

 

These are but a few examples of why we must continue to resist not only broadly drawn free trade agreements, but fast track authority as well. Every country should have the ability to make decisions in the public interest based on its own standards. However, without Congressional oversight and input into trade agreements, America will continue to be held hostage to trade acts that sell our national sovereignty to multinational corporations, ship U.S. jobs overseas, and decimate industries throughout our country.

 

As always, please let me know what you think about this, and other important issues. While mail service to the Capitol has been interrupted, please feel free to send me an e-mail by clicking here or on the icon to your left, call me at (202) 225-5705 or Toll-Free in southern Ohio at 1-888-706-1833, or send me a fax at (202) 225-5907.