The WTO Trap|
William Norman Grigg
The New American, January 10, 2005
The World Trade Organization, a Geneva-based body composed of foreign bureaucrats, will control our nation's economic destiny unless we get out -- now!
A delegation of U.S. cotton farmers had their "day in court" on December 13, seeking relief from a damaging regulatory ruling. The "court" to which they made their appeal was a dispute resolution panel of the World Trade Organization (WTO), a 148-nation global body headquartered in Geneva, Switzerland. The U.S. cotton farmers were forced to appeal to the foreign "court" because the U.S. government illegally ceded part of our sovereignty to the WTO, and the farmers have been caught in the repercussion of that action.
Last September, noted the December 7 Delta Farm Press, a three-member WTO panel ruled that a number of federal assistance programs for the cotton industry are "prohibited export subsidies" that created "significant suppression of world cotton prices in marketing years 1999-2002, causing 'serious prejudice' to Brazil's interests." This isn't to say that the WTO uniformly bans all such subsidies. Article 13 of the WTO Agreement on Agriculture allows national governments to provide agricultural subsidies, but the global trade body claims the authority to nullify any subsidy it deems inappropriate -- and to levy punitive fines and taxes to enforce its rulings.
As has been its habit, the Bush administration reacted to the September decision by expressing resigned disapproval -- and an eager willingness to abide by the WTO's final decision. This left U.S. cotton farmers to seek relief from the same foreign globalist body that had issued the injurious decision. "We have been preparing our defense," explained John Maguire, senior vice president of Washington operations for the National Cotton Council. "The U.S. Government is our attorney in this case." What this means is that, "win" or lose, the Bush administration would validate the WTO's authority to regulate our nation's economic policy.
This was neither the first, nor the most recent, instance in which the WTO has issued a strongly anti-U.S. ruling. In March 2004, the body ruled that congressional legislation banning Internet gambling violates the terms of the General Agreement on Trade in Services (GATS). Described as a measure intended to facilitate free trade in services, GATS is not an agreement, or even a set of agreements. Instead, it is an open-ended process in which hordes of anonymous foreign bureaucrats review local, state, and federal licensing and certification standards, and other supposed impediments to the global free trade in services. Through the GATS process, all of our legislative processes are thrown open to challenge by foreign governments.
Shortly after the U.S. presidential election, the WTO issued what would have to be considered its most dramatic ruling against U.S. interests. As summarized by Newsday, a November 26 ruling "approved punitive taxes long sought by the European Union and other countries because of a law they say unfairly protects U.S. steel companies and other industries." The law in question, commonly known as the "Byrd amendment," authorizes the imposition of tariffs to protect various industries from "dumping" -- that is to say, the subsidized export of goods below production costs as a way of driving U.S.-based competitors out of the market.
Under the Byrd amendment, formally known as the "Continued Dumping and Subsidy Offset Act of 2000," money collected through the tariffs could be paid to U.S. companies who file anti-dumping complaints. Over the past three years, some $700 million has been paid out. In response to a European Union complaint in 2002, the WTO ruled that the Byrd amendment was "illegal." This is to say that a Geneva-based global body, composed of foreigners who are not accountable to U.S. citizens, presumed to exercise judicial review over a law that -- whether considered wise or foolish -- was properly enacted by Congress and duly signed by the president.
The November 26 WTO ruling compounds that outrage by authorizing the imposition of "punitive taxes" against the United States. "While quite small initially," noted Newsday, "the level of punitive duties will be reviewed each year and could rise sharply. The value of the sanctions, on everything from sweet corn to metals and textiles, hasn't been determined, but trade officials estimated them at more than $150 million a year."
The WTO ruling clears the way for "the EU, Japan and five other governments … to slap tariffs on American imports … unless Congress repeals the so-called Byrd amendment," noted the Bloomberg financial press service. Surely President George W. Bush, a man reviled by his detractors as a "unilateralist" and hailed by his defenders as a stout defender of national sovereignty, rejected this brazen assault on our national independence and prosperity.
Asked about the ruling during a November 26 press conference at his Crawford, Texas, ranch, Mr. Bush replied: "We've worked hard to comply with the WTO. It's important that all nations comply with WTO rulings. I'll work with Congress to get into compliance." After promising to defer to the global body's supposed authority, Bush attempted to strike a resolute pose, mewling: "We expect the WTO, as well, to treat our trading partners as they treat us. And that's why, for example, I filed [a] complaint on the Airbus situation. We believe that the subsidies for Airbus are unfair for U.S. companies, such as Boeing." But this amounted to a tacit admission on Mr. Bush's part that he expected the WTO -- once again, a body composed of bureaucrats representing America's foreign economic competitors -- to protect our nation's interests.
Caught in the WTO Web
President Bush's enthusiasm for WTO-supervised global "free trade" explains why "you could almost hear a collective sigh of relief" from foreign capitals over his re-election, stated the December 2 Christian Science Monitor. "Because of the administration's strong commitment to free trade, the United States looks ready to push for even more international agreements that trim barriers to commerce." But the "free trade" agreements in question -- which include the North American Free Trade Agreement (NAFTA), the proposed Free Trade Area of the Americas (FTAA) and Central American Free Trade Agreement (CAFTA), and the WTO -- are not designed to bring about genuine free trade.
Properly understood, free trade results when a mutually beneficial exchange occurs between buyers and sellers, unimpeded by government intervention. The agenda being pursued by the Bush administration and its foreign cohorts, by way of contrast, defines attributes of national sovereignty as barriers to "free trade" and seeks to destroy sovereignty. At the same time, it builds a WTO-supervised global trade regime. The result would be the loss of our national independence and the delivery of our national economic destiny into the hands of foreign bureaucrats who have no interest in our continued prosperity.
It is reasonable to believe that measures like the "Byrd amendment" and the cotton subsidies are poor policy choices by the federal government. Certainly, if the intent is to make U.S. exporters more competitive, the rational approach would be to reduce or eliminate the tax and regulatory burdens on those industries, rather than binding them more tightly to Washington through subsidies. But U.S. policies should not be decided by an international bureaucracy. And as we will shortly see, the logic of the misnamed "free trade" agenda requires that our central government manage trade according to the dictates of the WTO.
Our Global Neighborhood, the 1995 report of the UN-aligned Commission on Global Governance, described the WTO as "a crucial building block for global economic governance.... The WTO and advanced regional groups such as the EU [as well as the envisioned FTAA] will increasingly be faced with the issue that will dominate the international agenda in years to come: how to create rules for deep integration that go way beyond what has traditionally been thought of as 'trade.'"
The WTO is intended to dictate the rules governing regional trade pacts such as NAFTA and the proposed FTAA. The European Union, on which the FTAA would be modeled, regularly defers to the WTO's jurisdiction, and -- as seen earlier -- the EU expects the United States to do the same. Completion of the FTAA pact would effectively compel our nation to submit to the WTO. Chapter II, Article 3 of the most recent draft of the FTAA states that signatory nations will comply "with the rules and disciplines of the World Trade Organization."
The Constitution assigns to Congress the power of regulating commerce with foreign nations, as well as imposing taxes and tariffs. No provision of the Constitution allows Congress to delegate that power to any other element of the federal government, let alone foreign multilateral bodies like the WTO. And it should be remembered that economic integration, as the Commission on Global Governance intimated, leads to political integration and the loss of national independence. Thus Congress' approval of U.S. membership in the WTO was nothing less than an act of betrayal that borders on treason.
A decade ago, Congress approved U.S. membership during a "lame duck" session of Congress. This was brought about through the bipartisan cooperation of then-president Bill Clinton and Republican congressional leaders Newt Gingrich and Bob Dole.
As Gingrich himself admitted in testimony before the House Ways and Means Committee, approval of WTO membership was nothing less than a "transformational" moment, a fundamental alteration of our system of government:
I am just saying that we need to be honest about the fact that we are transferring from the United States at a practical level significant authority to a new organization. This is a transformational moment. I would feel better if the people who favor this would just be honest about the scale of change.... This is not just another trade agreement. This is adopting something which twice, once in the 1940s and once in the 1950s, the U.S. Congress rejected. I am not even saying that we should reject it; I, in fact, lean toward it. But I think we have to be very careful, because it is a very big transfer of power.
Had Gingrich's professed reluctance been rooted in principle, rather than a case of rhetorical posterior-protection, he could easily have held up approval of the WTO until after the new Congress convened. But he and his co-conspirators (no other word is adequate) were desperate to thwart careful deliberation of the proposal by the new Congress, which was loaded with freshman members leery of entanglement in multilateral bodies.
In any case, Gingrich accurately recounted the history of the WTO and its aborted predecessor, the International Trade Organization. Previous efforts to subordinate the U.S. to a global trade body had come to naught precisely because Congress was able to exercise its deliberative function. The WTO's backers didn't intend to allow our country a third chance to escape the WTO trap.
Another House that Hiss Built
In the aftermath of World War II, a coterie of international elitists proposed a constellation of multilateral economic organizations to supplement the United Nations: the World Bank, the International Monetary Fund, and the International Trade Organization (ITO). In 1947, a delegation of U.S. diplomatic officials attended a conference in Havana intended to finalize the framework for the ITO.
Acting as chairman for the U.S. delegation to the Havana Conference was none other than Alger Hiss -- the notorious Soviet agent who, along with Soviet official V.M. Molotov, had co-written the UN Charter. Hiss also served as secretary-general for the UN's founding conference in San Francisco. Critics of the UN have long described that disreputable body as "The House that Hiss Built"; the ITO was, in large measure, the work of the same treasonous architect.
Although the Senate approved U.S. membership in the UN with only two negative votes in 1945, by 1947 public opinion regarding globalist institutions had shifted significantly, and Congress had followed the public's lead. Congressman Bertrand Gearhart (R-Calif.) described the Hiss-led delegation at Havana as "boatloads of smug diplomats, all-wise economists … experts, theorists, specialists and whatnots, sailing gaily from our shores to barter away … the little factory in Wichita, the little ship in Keokuk."
When the final draft of the ITO pact was presented in March 1948, it met with insurmountable resistance from both Congress and the public. Although the ITO agreement was depicted "as a charter to 'free world trade,'" it was actually "a charter for trade control," noted George W. Malone (R-Nev.). "The result of its adoption would have been socialism, on a global plane."
Across the party divide, former Congressman Samuel B. Pettingill (D-Ind.) agreed with Senator Malone. Pettingill opposed the ITO "because it is part and parcel of international socialism, one-worldism, and the slow surrender of American sovereignty." The General Agreement on Tariffs and Trade (GATT), which the ITO was intended to enforce, "calls for a vast complex of multilateral negotiations with many nations in a sort of world super-legislature where we have one vote," continued Pettingill. "Once wrapped up in this spider web, it will be difficult indeed to recapture any independence of action."
Business groups also spoke out in opposition to the ITO. "The entire document reflects an excessive acceptance of economic planning," protested the U.S. Chamber of Commerce. The National Foreign Trade Council warned that "if the United States subscribes to the charter it will be abandoning traditional American principles and espousing, instead, planned economy and full-scale political control of production, trade, and monetary exchange. The charter does not reflect faith in the principles of free, private, competitive enterprise."
Not surprisingly, although two attempts were made to secure congressional approval for the GATT accord, the ITO charter was never presented to Congress for ratification.
But for the Global Power Elite, "no" doesn't mean "no" -- but rather, "not yet." The same globalist, socialist body that had previously been decisively rejected was renamed the World Trade Organization and secured approval in 1994 -- thanks to the timely help of globalists in the Republican Party's leadership ranks.
The WTO and the United Nations, wrote Senator Malone in his prophetic 1958 book Mainline, are two arms of "a pincers movement … both on the domestic and on the international scene." One arm of that pincers was political -- the steady entanglement of our nation in international alliances and multilateral bodies, particularly the UN. The other arm was economic -- created by the Trade Agreements Act of 1934, in which Congress ceded to the Executive Branch the power to control our nation's trade policy.
Because of the 1934 act, wrote Malone, "the business and the enterprise of individuals now were considered in close connection to the policies of the State. The State would assist them in the expansion of their markets. Government would negotiate the channels of trade." In brief, "the State would determine trade," and the president, not the Congress, would exercise that power.
The president, in turn, was given the means to surrender that authority to foreign bureaucrats. And that betrayal has been carried out by a succession of presidents from both sides of the narrow partisan divide. As Malone warned more than four decades ago, "That power is now being increasingly invested in international groups, and removed from our Nation's control." As President Bush's deference to the WTO illustrates, that body is rapidly assuming control over our nation's economic destiny.
The ideological bent of the WTO can be inferred by a brief examination of its director-general, Thai career politician Supachai Panitchpakdi. As Thailand's deputy minister of finance, Mr. Panitchpakdi "introduced the value-added tax system [and] laid the foundation for the establishment of the country's Export-Import Bank," notes his official vitae. As chairman of that country's International Economic Policy Committee, he led the campaign for ratification of the WTO and "ensured his government's full and faithful implementation of its obligations" under that body.
As a graduate student at the Netherlands School of Economics (now Erasmus University), Panitchpakdi was a protégé of the late Jan Tinbergen, a Dutch physicist who won the 1969 Nobel Prize for economics. Tinbergen, a resolute socialist and advocate of central economic planning, donated his supposed expertise to the League of Nations in the 1930s and became an unofficial adviser to numerous non-aligned socialist governments following WWII. As a socialist, recalls an official Erasmus University bio, Tinbergen firmly believed that optimal economic and social conditions can be achieved by rational government policies. In later years he applied these ideas to the economic world order, but to his disappointment his proposals met with little success.
Tinbergen passed away in 1994, shortly before the U.S. joined the WTO. It's fair to assume that, were he alive today, he would feel a measure of satisfaction over the unfolding WTO-administered global trade regime.
Panitchpakdi's term ends next August. The odds-on favorite to replace him is Pascal Lamy, a French official who has the support of the European Union. Lamy, "a French Socialist, will compete for the coveted Geneva seat in a race that -- at this stage -- looks likely to include a Brazilian, a Mauritian, and a Uruguayan," noted a December 13 Reuters report.
Get Us Out -- Now!
But why should America's economic fortunes be placed in the hands of any foreign body, headed by any foreign official of any ideological background? The American colonists who withdrew from the British Empire fought a war rather than allow a distant, unaccountable parliament to claim the power in principle to impose taxes. Under the emerging global trade regime, the WTO is actually imposing punitive taxes against the United States, with the acquiescence and support of both the president and Congress.
This need not continue. Under U.S. law, every five years (including this year) any member of Congress can introduce a "privileged resolution" to end U.S. membership in the WTO. Such a resolution must be brought to the floor for a vote within roughly three months of being introduced; it cannot be bottled up indefinitely or killed in committee.
Five years ago, Rep. Ron Paul (R-Texas) took advantage of this provision to force the full House to vote up or down on whether to get the U.S. out of the WTO. "[U.S.] membership in the WTO actually is illegal, illegal any way we look at it," Rep. Paul advised his colleagues in a 2000 speech on the House floor. "If we are delivering to the WTO the authority to regulate trade, we are violating the Constitution, because it is very clear that only Congress can do this. We cannot give that authority away. We cannot give it to the President, and we cannot give it to an international body that is going to manage trade in the WTO. This is not legal, it is not constitutional, and it is not in our best interests."
"It is not up to the World Trade Organization to decide what labor laws we have, or what kind of environmental laws we have, or what tax laws," continued Rep. Paul. Other countries "can toss their own sovereignty out the window if they choose. I cannot tell China or Britain or anybody else that they should or should not join the World Trade Organization.... I can, however, say that the United States of America ought to withdraw its membership and funding from the WTO immediately."
Rep. Paul's 2000 measure calling for U.S. withdrawal from the WTO was lopsidedly rejected by a vote of 56 to 363. But now that the WTO has begun treading on U.S. sovereignty, the result of a new vote to withdraw from the WTO could be radically different -- if enough informed Americans apply pressure on their congressmen to put America first.
Readers are encouraged to ask their congressmen to support a resolution calling for U.S. withdrawal from the WTO. Click here for information on how to contact your own U.S. representative and senators.