Rethinking Trade - Season 1, Episode 19
The changes needed to support living-wage jobs, to combat the climate crisis, to make medicines accessible for all…
Much of it won’t be possible unless we overhaul our corporate-rigged trade system. Trade Expert Lori Wallach and Activist Ryan Harvey explore ways to make our progressive trade vision a reality. Rethink Trade is an initiative of Public Citizen’s Global Trade Watch.
Transcribed by Garrett O’Brien
Welcome back to Rethinking Trade, where we don’t just talk about trade policy, we fight to change it. I’m Ryan, and I’m joined once again by our in-house trade expert Lori Wallach.
Lori, a lot of our listeners may have seen the New York Times piece a few weeks back entitled Big Oil Is in Trouble, Its Plan: Flood Africa with Plastic. What it reveals is that chemical and oil and gas companies, who are facing growing opposition to plastic bags and other plastic goods that create a waste problem (including China cutting them off from plastic waste imports), they want to use Africa as a dumping ground. Their plan is to use Kenya as a lever to undermine African countries’ plastic laws protecting against plastic waste and they are using the US-Kenya trade deal negotiations to do this. This is sort of a classic example of how trade deals can chip away at, or get rid of, a country’s domestic environmental regulations, and that’s what we’re going to be talking about today. Can you give us all a bit of an introduction to this specific case, and also how and why trade rules have this type of authority?
I’m going to take the second question first, because the predicate to understanding the situation with Kenya, and the US Free Trade Agreement that is being negotiated, is to be aware that a lot of the contents of so-called “trade agreements” have nothing to do with trade. But rather that impose new limits on government regulatory authority on behind-the-border issues like whether you can ban plastics waste or say, no more use of single-use plastic bags, or that create new rights or privileges for corporations, monopoly protections for pharmaceutical firms to charge high prices for medicines or rights for foreign investors to operate without meeting local laws. So those rules typically are enforced through a provision that is in most trade agreements that says “the signatory country shall conform domestic laws, regulations, and administrative procedures to the terms of the agreement,” that’s the language in the WTO version.
What that boils down to is you can have a country like Kenya, because here’s the situation there, that has signed onto an actual multilateral environmental agreement called the Basel Convention that recently designated plastic waste as a hazardous waste that can be banned under that international agreement you can ban the shipment across borders of that good as an environmental priority, and Kenya is a country that’s a leader throughout sub-Saharan Africa in establishing strong plastics wastes laws so they don’t allow single use bags like a lot of US states and cities but also they have other policies. You could have that as your domestic national law, but then if in your trade agreement stuck into some chapter like the one where this would probably be is something called “technical barriers to trade.” It’s just to set the standards that the big companies get wedged into trade agreements that get designated as a “illegal trade barrier.” So suddenly your domestic law is in violation with a so-called trade agreement and your domestic law has nothing to do with trade but you can face trade barriers, actual sanctions, against your real trade, against your exports as a developing country, you can have tariffs, taxes put on it, for not changing you domestic law on something like an environmental protection and that is what is at the heart of that New York Times exposé.
When word got out that the US negotiators had been lobbied by some interest in oil and gas and the chemical industry to use the Kenya agreement to try and set a policy that would make Kenya reverse its toxics pollution rules with respect to plastics and therefore become open as a dumping ground for these companies’ waste, but also for the sale of petroleum based products like single-use plastic bags. So that’s how something totally unrelated to trade that is a totally reasonable domestic environmental law can get sacked through closed-door trade negotiations.
And in Kenya’s case, I mean you touched on this a bit, were talking about pressure being applied before the ink touches the paper– there’s also plenty of ways companies can attack environmental regulations after a deal is signed, particularly through, no discussion about trade deals and environmental regulations could be complete without bringing up, Investor State Dispute Settlement System (ISDS). How do these tactics work and how have they been used to attack environmental protections? Maybe you could just give us a little introduction to that.
There are three ways that these trade agreements rules end up undermining domestic laws. One is just good old pressure. So, in the negotiations like this you have, behind closed doors, an industry lobbyist who is an official US trade advisor. There are 500 official US trade advisors with ties to corporations there are a handful of unions and even smaller handful of environmental groups; very few interests to counter to corporate interests pushing for deregulatory, pro-polluter policies in trade agreements, and they just pressure the countries as they’re negotiations, “you better change blah blah law or we won’t do this trade agreement” or “we’ll cut off your access to the US” so that’s one way it works. The second way it works is that you actually do the negotiation, you jam in these kind of non-trade rules. A classic is for instance, bad rules that got slipped into the revised NAFTA that create more obstacles for Mexico and Canada having good laws in Genetically Modified Organisms (GMOs). So, unrelated to trade per se but consumer, environmental protections. And then once they’re in the agreement they can be challenged from one country attacking another in tribunals in where, if you don’t get rid of that law, you face trade sanctions, border taxes on your actual trade, your export, until you do.
You know a really ugly example of that is the US took a case on behalf of Big Ag, agribusiness, to attack the European ban on artificial growth hormones in meat, they went to one of those tribunals this one at the World Trade Organization, the rules are so slanted and the tribunals are so unfair that the WTO tribunal said, “Sorry Europe you banned these growth hormones which are associated with various cancers so that your farmers can’t use them but it’s beyond what is allowed under the food standards of the WTO, so you can’t keep the stuff out. And if you continue to do so, you have to pay.” And the US imposed over 200 million dollars of sanctions on the European Union’s exports to the US of other stuff unrelated to meat, and did so for over a decade because they were trying to force the European Union to back down.
Now, most countries back down right away. The US did it so a variety of countries, Mexico and Canada, attacked our labeling of meat with respect to where it’s grown, harvested, and slaughtered, the so-called Country of Origin laws, in the face of a billion dollars of potential future trade sanctions we just caved and gutted the law. So that’s one way. The other way is the investor-state tribunals, and that is when a private interest, not just a government trying to enforce another government’s commitments in a trade agreement, but a private entity can try to challenge a government, elevated like it’s its own government, and extract cash for not meeting trade agreement rules.
The bottom line of all of this is in Kenya they’re doing the right things on plastic pollution and the US should be cooperating with Kenya to promote those kind of environmental and health initiatives, not use a trade agreement to create a basically booby-trap that is going to blow up laws unrelated to trade because some corporations get those provisions jammed into a trade agreement.
So, I guess that would bring us to our final question which is one that I’m sure listeners are asking as well, which is how can we reverse course? How can trade rules be written that not only prevent these attacks from happening in the first place but enforce rules that protect environmental regulations and standards from the get-go and are there any examples right now of those types of rules in action?
So, we have to think about this on two levels. The first is the Kenya agreement itself. The plastics issue is just one example of why the US negotiating anything like our like our past trade agreements with the country of Kenya, under any circumstance, but particularly right now, is a ridiculous idea. And there is no upside for development, for the environment or if you look at it just nationally, for US jobs, for US exports, but if you look at it on the flipside for what’s going to happen in Kenya, its counterproductive if were trying to have this agreement either help workers or the environment in either country or for that matter build our foreign relations and reputation. If you see your member of Congress or even better next time you are near a computer send him an email, make a call, to make sure they know that you don’t want this US-Kenya agreement going forward. It’s just not the right thing to be doing probably at all, certainly not now.
And the second thing is the model. Now could there be a US-Kenya agreement that includes trade that could be for people and promoting, improving health standards, environmental protection, human rights protections? Of course. The problem is that that is not the model we have. So with the renegotiation of the NAFTA we took an agreement that was like 20 rungs below Hell and we brought it up to the crust. But that ain’t no agreement that is a good agreement, it’s one that hopefully means, the new agreement means, that there will be less harm done by a NAFTA.
If you want to actually have a good agreement, you need to actually start with what the goals are, which is how do you actually improve people’s livelihoods? How do you use the agreements to set standards that companies have to meet in order to get the benefits of the agreement? Versus today’s agreements which put handcuffs on countries and tell them all the things they have to do for corporations. And that is a bigger discussion that is probably starting and will start perhaps after the election. But for right now, I think the best thing to do is to make sure your members of Congress know, no US-Kenya agreement under these circumstances, and then go to tradewatch.org and also rethinktrade.org and become part of the discussion of what a good trade agreement could look like because there is a way to do this right and the only way we’re going to get there is if we’re all informed and fighting for it.
Rethinking trade is produced by Public Citizen’s Global Trade Watch. I would encourage you to visit Rethinktrade.org as well as tradewatch.org to educate yourself and find out how you can get involved in work we are doing in the fight for fairer and more equitable trade policies.