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In Historic Veto Override Today, MarylandLegislature Revokes Governor Ehrlich’s CAFTA Commitment and Forbids Future Procurement Sign-offs by Governors Without Legislature’s OK

As State and Local Concerns About ‘Trade’ Pacts Build, MarylandIs First  Stateto Withdraw From WTO Procurement Pact and Require Legislative Approval of Federal Government Requests to Bind  StateLaws to Future Trade Deals

WASHINGTON, D.C. – The Maryland General Assembly’s override today rescinding Gov. Robert Ehrlich’s 2003 commitment to allow Maryland’s state procurement rules to be bound by pending trade agreements negotiated by the Bush administration and in previous trade agreements such as the World Trade Organization (WTO) is a victory for Maryland taxpayers and the latest evidence of state officials’ growing demands for accountability in international trade negotiations, Public Citizen said today.

The legislation enacted today revokes the approvals given by Maryland governors to bind the state to the procurement rules of existing and future trade agreements’ and requires that any future requests to bind the state that are approved by the legislature are valid.

“This is a win for Maryland taxpayers and a win for state and local officials nationwide who are demanding new accountability over federal trade negotiators given their growing understanding of the threat today’s trade agreements pose to democratic policymaking,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

Today’s legislation is a response in part to attempts starting in late 2003 by the U.S. Trade Representative’s Office (USTR) to obtain blanket sign-on rules from governors to conform their states’ laws to the procurement rules set forth in an array of trade agreements with several dozen countries, including many agreements not yet even negotiated. The USTR has rebuffed state legislators’ requests simply to be given notice when USTR asks governors to bind their states to trade agreement procurement provisions. Meanwhile, legislators in many states began to question whether unilateral governor sign-ons to trade agreements that require states to change their procurement legislation were even constitutional, given separation of powers requirements.

The bill passed today has two prongs. First, it rescinds Ehrlich’s previous commitments on behalf of the state to bind Maryland to the restrictive government procurement rules included in new international trade agreements, such as the Central America Free Trade Agreement (CAFTA). These rules on government procurement have nothing to do with traditional trade matters such as tariffs and quotas. Rather, they limit states’ authority to decide under what conditions state taxpayer dollars are spent. For example, CAFTA’s procurement rules could be used to challenge requirements that state contractors employ local workers; preferences for recycled or mercury-free products; and prevailing wage laws.

Twenty-nine states already have opted out of CAFTA’s procurement rules. In seven instances, governors withdrew initial agreements to sign on after state legislators and others raised the many problems the CAFTA procurement rules would cause for existing state laws. Ehrlich had refused to withdraw the commitment he made to bind Maryland to CAFTA’s rules.

“Today Maryland joins the majority of U.S. states in choosing to maintain the ability to enact procurement policies that promote social, environmental and economic development goals,” said Wallach.

An especially interesting aspect of today’s legislation is its requirement that all previous governor-only commitments to bind Maryland’s procurement laws to trade agreement rules be withdrawn. This provision of the legislation will require that Maryland be removed from the list of states that must confirm with the WTO’s Agreement on Government Procurement.

“The Maryland Legislature has shown real policy leadership with this legislation because it provides the guide for other states that seek to extract their state procurement policies out from under the many constraints on state policymaking and authority imposed by the WTO procurement pact,” said Wallach.

In addition to withdrawing Maryland’s commitments to existing and pending trade pacts, the bill reaffirms that the authority to bind Maryland to the rules of an international trade agreement is a legislative function.   The legislature’s conclusion follows logically from the Maryland Constitution.  In 2003, when Ehrlich committed the state to the government procurement rules in various international trade agreements, he changed the state’s legal rights and duties and restricted future action by the General Assembly with regard to what kinds of procurement policies the body could maintain or adopt in the future. In general, binding the state to an agreement with a foreign power requires action by the General Assembly. The federal government requires legislative approval for international agreements as well. This bill (SB 401) restores democratic accountability over important decisions regarding Maryland’s obligations under international trade agreements in the future.