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Rhode Island Passes Legislation to Safeguard State Legislative Authority and Federalism

Nov. 1, 2007

Rhode Island Passes Legislation to Safeguard State Legislative Authority and Federalism

Legislature Overrides Governor’s Veto of Trade Bill; Heeds Public Call for New Accountability in Trade Negotiations

WASHINGTON, D.C. – By overriding the governor’s veto of groundbreaking legislation, the Rhode Island General Assembly has ensured that the state cannot be forced to comply with non-trade regulatory constraints imposed through trade agreements unless state lawmakers agree to it. The legislation, passed Wednesday, fortifies Rhode Island state sovereignty and indicates the nationwide political discontent with current U.S. trade policy, Public Citizen said today.

The legislation (HB 6032) gives the Rhode Island House and Senate the authority to approve or reject any request from the federal government that would make the state conform its policies to non-tariff provisions of future trade agreements. This applies to rules in trade agreements pertaining to the service sector, procurement and investment. While state governments currently regulate a wide array of industries and issues, this authority increasingly is diluted by binding rules in international trade agreements that drastically expand the scope of the agreements. Within these broad parameters often fall non-trade domestic policies over which state and local governments traditionally have had jurisdiction, including those concerning the environment, financial services, economic development and health care. 

“How Rhode Island chooses to spend its taxpayer dollars, pursue local economic development strategies or seek to make health care affordable should be decided by Rhode Island citizens through their democratically elected legislature with approval by their governor – not imposed top-down by foreign trade agreements,” said one of the bill’s sponsors, Rep. Art Handy.

“While Rhode Island citizens can count this a victory, this also is a win for state and local officials across the country who are demanding new accountability over federal trade negotiators,” said Lori Wallach, director of Public Citizen’s Global Trade Watch division. “They have become increasingly aware of how so-called trade agreements, which include many non-trade obligations, trespass into their jurisdiction.”

The legislation is a response in part to attempts starting in late 2003 by the U.S. Trade Representative’s (USTR) office to obtain blanket sign-on rules from governors to make their states’ laws comply with the procurement rules set forth in an array of trade agreements with several dozen countries – including many agreements not yet even negotiated. The trade pact procurement rules ban such measures as those that require governments to purchase American-made goods and set local purchasing preferences based on recycled content or renewable energy requirements.

The USTR rebuffed state lawmakers’ requests even for advance notice of when the USTR will ask governors to bind their states to trade agreement procurement provisions – a particularly controversial practice. The Rhode Island General Assembly’s action Wednesday follows a fair trade election sweep in 2006 in which incumbents who had voted for the U.S. trade status quo of the North American Free Trade Agreement (NAFTA), the World Trade Organization (WTO) and Fast Track were replaced by fair traders in 37 congressional seats who rejected these failed policies and advocated improvements. In Rhode Island, fair-trader Sen. Sheldon Whitehouse replaced Sen. Lincoln Chafee, who had supported various NAFTA expansion agreements.

“There is a need for a new approach to trade policy by reclaiming from overreaching ‘trade’ agreement requirements the ability to promote Rhode Island’s social, environmental and economic development goals,” Handy said. “Creating new, orderly avenues for state legislatures to have input into U.S. trade policy will help ensure we can obtain the benefits of both trade and a healthy democracy.” 

The Rhode Island General Assembly’s veto override comes at an auspicious moment. Congress is set next week to consider an expansion of NAFTA to Peru. The Peru trade agreement is opposed by scores of labor, environmental, family farm, Latino civil rights and consumer groups, as well as by Peru’s two labor federations, because it contains the same damaging provisions as NAFTA.

Since the passage of NAFTA, the U.S. trade deficit has ballooned from under $100 billion to $800 billion, three million manufacturing jobs have been sent offshore and median real wages have remained flat – even as worker productivity has soared. Meanwhile, scores of domestic non-trade laws have been challenged before foreign tribunals established under the “trade” pacts, including state laws on zoning, toxics and mining.

“The Rhode Island General Assembly has shown real leadership by enacting this policy because it provides guidance for other states that seek to extract their state regulations and policies from the many constraints imposed by NAFTA-style trade agreements,” said Wallach. “This new law is a victory for open government. Now it’s Congress’ turn to begin thinking about a new trade policymaking system that provides state officials the right to decide whether various non-trade domestic policies should be bound to comply with ‘trade’ rules.”

READ the bill.

LEARN MORE about state and local governments’ actions regarding international trade agreements.