A "corporate court" has ruled that the U.S. must face $1 billion in tariff punishment because a law U.S. consumers wanted for protection of health and safety has cost foreign companies some profits. The U.S. Congress is being told they must repeal the law or we face billions in punishment. U.S. courts don't get a say. We the People don't, either.
That's what "free trade" agreements have done for us lately.
The U.S. has country of origin labeling (COOL) rules for meat labels as part of rules that notify customers about the source of certain foods.
The World Trade Organization (WTO) has ruled that informing consumers "discriminates" against Mexican and Canadian companies, thereby violating the terms of the North American Free Trade Agreement (NAFTA). The court decided that American consumers might, for one reason or another, prefer to buy meat born, raised, slaughtered and packaged in the U.S. to meat from other countries that might or might not have lower health and safety standards. Since this preference would hurt the profits of Canadian and Mexican corporations, it violates the agreement.
The U.S. labeling effort began when "mad-cow disease" was discovered in cattle in other countries. That was pretty big news at the time. The rules also come out of concerns that some countries have lower health and standards than the U.S. So Congress passed a law requiring that meat and other foods be labeled so consumers can make up their minds about what to purchase.
But NAFTA allows Mexican and Canadian companies to sue the U.S. if the U.S. passes laws and/or impose regulations that might hurt their profits. The WTO has decided giving consumers the ability to know where their food comes from can hurt the profits of non-U.S. corporations and is therefore a violation of NAFTA.
It's Out Of Our Hands (And Sovereignty)
Ninety-two percent of the U.S. public wants the meat labeling rules. But what the WTO rules is what has to be, because we are a party to NAFTA. Congress has passed and the president has signed NAFTA, so We the People can't do anything about this – not through our courts or our legislative bodies. No U.S. court can review this ruling. We cannot vote to overcome it. It is out of our hands and beyond our country's sovereign ability to do anything about it because we signed that away – so corporations can increase profits.
Congress is not required to change the law, but Canada and Mexico can now begin to impose tariffs that will hit U.S. jobs and communities. We cannot impose counter-tariffs to balance this out, so Canadian and Mexican goods will have an advantage in U.S. markets. (See: Taxation without representation.)
How did we end up here? We were promised that NAFTA would benefit our economy, bring jobs and higher wages to U.S. workers, etc. Of course, that is not what happened. Our trade deficit increased. Manufacturing jobs went south, so shareholders and executives could pocket the wage differential (while Mexicans family farms were wiped out, forcing northward migration). And, of course, now we can't even tell people where their meat is coming from so consumers can decide if they want to purchase it.
This ruling is a particular concern now, because the Trans-Pacific Partnership (TPP) is coming before Congress for approval. TPP has similar "corporate court" provisions, and would open up our country to lawsuits from corporations in many more countries – including subsidiaries of U.S. corporations.
Giant multinational corporations and Wall Street stand to benefit from TPP, because it will enable even more offshoring so shareholders and executives can pocket the wage difference.
Their lobbyists (both in and out of government) will tell you that TPP can't make us change our laws. For example, in May President Obama gave a speech at Nike headquarters to promote TPP. He said that warnings that TPP could "undermine American regulation – food safety, worker safety, even financial regulations" was "just not true." He said: "They’re making this stuff up. No trade agreement is going to force us to change our laws."
This is technically correct – but just barely. Congress doesn't have to change the law. But the COOL case shows how we face tariff penalties that cost jobs and hit communities if Congress doesn't. Perhaps billions of dollars of economic damage that we can't do anything about won't "force" Congress to change the COOL law.
We should not sign way our sovereignty to corporate courts concerned only with corporate profit.
This would be a good time to call your representative and senators and tell them you do not want them to vote to approve TPP.
P.S.: Just last month the WTO ruled that our "dolphin-safe" tuna labels are a "technical barrier to trade." So consumers won't have information that lets them decide if they want to purchase tuna that is caught with or without killing dolphins.