The World Trade Organization imposes obligations on state and local governments that limit their ability to protect consumers, establish environmental standards and undertake economic stimulus initiatives. As someone who served as a mayor and state senator, I can say with certainty that Americans have a lot to lose when the WTO applies to local and state laws. It is a well-known fact that in our system of government, primary responsibility for regulating public health, welfare and the environment resides with the states.
Here are some examples of typical state laws or legal principles that conflict with the WTO: laws that promote investment in recycled material markets; that allocate public deposits or banking business based on community reinvestment performance or local presence; that impose “buy local” requirements or preferences for state procurement; and that make state procurement contingent on certain social or human rights considerations, like the MacBride principles and Burma selective-purchase laws. Ninety-five laws have been identified as potentially “WTO-illegal” in California alone, according to the Georgetown University Law Center.
How do we know this? Japan, the European Union and Canada publish documents every year that list American laws they consider WTO-illegal. The above is the result of combing through those documents, as well as inferring from the laws they identified.
International trade rules have already opened local democracy to attack. Several states are facing legal challenges to their laws under NAFTA. California’s ban of a poisonous chemical–methyl tertiary butyl ether (MTBE)–is being challenged by a Canadian maker of the chemical under NAFTA’s “investor protections.” Canada is also suing the United States for NAFTA violations in Mississippi and Massachusetts. The Clinton Administration has stated its ultimate intention of expanding the WTO to include NAFTA-like investor protections in the future, further undermining local and state governments.
Federal air, water, consumer safety and other standards are supposed to set a floor, not a ceiling. American democracy is based on the ability of local and state governments to innovate and push standards forward. Justice Louis Brandeis characterized the states as “laboratories of democracy.”
The WTO must be prevented from applying to “subfederal” governmental action. The Administration should refuse to negotiate any further expansion of the WTO until the existing agreements are renegotiated to protect local democracy.