That giant sucking sound

Why the WTO poses a threat to the Pacific Northwest.

EVERYONE IN THE Northwest knows that trade is good. After all, recently released numbers from the US Commerce Department confirm that the Puget Sound area leads the nation in the amount of export trade we generate, some $34 billion in 1998 alone.

But of course those numbers show only one side of the ledger. They tell us nothing about the cost of trade, and they tell us nothing about the potential cost from the kind of approach to free trade that is promoted by the WTO. The numbers also, naturally, fail to tell us anything about the social and economic disruptions that are not measurable in dollars or that are simply "netted out." Sure, trade volume goes up when expanding global corporations come to dominate more of our fishing and agricultural industries. But do we really think nothing is being lost?

The irony of the WTO meeting in Seattle—one that the international organizers may yet come to regret—is that while our city is famous for its flag-waiving international businesses, it also is the center of an antiglobalization movement, a movement for reduced consumption and more sustainable means of living. And since we're blessed with far more natural riches than most places in the world, we also have far more to lose from a free-for-all global economy, as the following Northwest voices make clear.

David Batker, a native of Washington and a veteran of seven years with Greenpeace, is now with the Asia Pacific Environmental Exchange, an activist group working on trade issues. He has a master's in economics.

Since the WTO was founded in January 1995, this is the first meeting in which they want to have a major expansion of the products they cover. They want to bring in forests, fisheries, chemicals, intellectual property rights, agriculture. This is the debate at the end of the 20th century; it's going to shape the face of our planet.

For example, we have a ban on the export of timber from national forest lands. The export ban enabled us to save a larger amount of forest because it reduces the demand on national forests. It also preserves local timber jobs because it insures that the wood products are processed locally. But the ban is clearly WTO-illegal. It clearly prevents trade in a product between countries.

If you then say, 'We're going to allow Japan and other countries to be purchasers of our national forest lands,' then the demand is going to be much larger and the pressure greater and you'll have an increase in cut. If you lower tariffs on forest products, forest products are going to be cheaper relative to other substitutes, and that will cause an increase in logging as well.

These forests provide a huge diversity of services: clean water, clean air, landslide protection, wildlife habitat—they're essential to our way of life here in the Northwest. But the WTO does not calculate those benefits into the trade equation.

This isn't a debate about whether we're going to have trade in forest products or not. It's a debate about how we're going to conduct that trade, whether we're going to remove a large number of trade restrictions that are in place to protect forests and say that trade rules take supremacy over all other rules.

Another example: Our state requires recycled content for state procurement of paper, because it helps boost the market [for recycled paper] to a more efficient level, which means less logging, less environmental damage. But those "green procurement" laws clearly would violate WTO rules because they would discriminate against countries that produce paper from mainly native forests and don't have the recycled content.

We also want more eco-labeling of forest products that tell us whether they were produced in an environmentally sound manner. That's important for moving to where we destroy less salmon habitat. But that also would violate the WTO requirement that you can't discriminate against products based on how they were produced.

Mark Ritchie is president of the Institute for Agriculture and Trade Policy, a nonprofit research organization in Minneapolis.

In Washington state, you are growing many fruits and vegetables that are labor-intensive and therefore much cheaper to produce in other countries. Washington pays high wages relative to Mexico, China, or Chile. It's not a warm climate year-round, so you are at some kind of competitive disadvantage.

If the current US trade proposals are accepted and adopted by the rest of the WTO, large sections of Washington state agriculture would face very intense competition from much cheaper imported goods. Some of the major commodities would face lower prices, and the ability of Washington state farmers to sustain those lower prices is very questionable given the precarious position they're in today. There is an expectation that an increase in international trade in wheat, which is to be achieved by [eliminating tariffs], would increase the volume of wheat going through Washington's ports. But with the high-cost structure of Washington wheat production—fairly expensive land, expensive water, high taxes—right now Washington farmers are losing money on every bushel sold. If the world price is driven down, they will lose more money.

[Because of the WTO,] Washington is at great risk of having its agriculture greatly disrupted and many farmers put out of business.

Pete Knutson has been a fisher for 27 years. He is on the board of the Puget Sound Gillnetters, and he also teaches anthropology at Seattle Central Community College.

The basic idea of the WTO is to tear down any barriers that would inhibit the flow of capital from one part of the globe to another. We've got some things in the fishing industry which have evolved to protect local fishing communities which I think would be subject to a challenge under the WTO.

For instance, in Puget Sound and in Alaska, there's a limited number of fishing permits that give you the privilege to commercially harvest salmon. And you have to be on the vessel in order to harvest. I can't be an absentee owner and hire a bunch of guys to go out and catch it for me. We think that's a good law, because it keeps ownership of the resource in the hands of local communities and small-boat fishers.

Under the WTO, the requirement that the owner be on the vessel could well be interpreted as a "local preference" and thus be struck down. In that case, you could have a company like Mitsubishi come in and directly compete for the purchase of those permits [which presently cost about $35,000]. In Canada, corporations can directly own permits, and what you're finding there is much more centralization of ownership of vessels and permits.

Any corporation could afford to pay a much higher price for those permits than a fisherman, because they're getting the value of that fish when it comes out as a value-added [wholesale] product, whereas the fisherman is just getting the "ex-vessel" value, which is only a fraction of what a corporation gets out of it. So a corporation could pay three or four times the [present] value of the permit and still come out ahead, and directly control the resource.

I spend 80 percent of my time on more indirect threats to the fisheries, such as mining. We're fighting these things constantly. And any kind of international agreement on mining standards could really screw us. We want the ability to lobby the Alaska state legislature for protection and not have that challenged by an international mining corporation, because they have tremendous power, even without this international club. It takes away some of the national sovereignty tools that we can use to fight this thing.

We're also fighting this whole issue of corporate salmon farming, which, wherever it's been established—whether Norway, Ireland, Scotland—has destroyed the wild runs that we depend on here. We're pushing hard in the Washington legislature and in BC to get this industry out of marine waters and into concrete ponds on land. We don't want a situation where you have some supernational agency that can come in and say, 'No, you can't do that because we don't consider that a legitimate environmental concern. This is really a protectionist measure.'

It's hard enough in Olympia to get some control on some of these issues. How are you going to control it when you don't even have elected representatives?

Mary Robinson is an organic farmer of fruits and flowers on Vashon Island and is also on the board of Washington Tilth Producers.

For us, world trade doesn't mean expanded markets. We sell locally; all the sustainable agriculture people do, except for a few organic apple growers who export. One of the main components of sustainable agriculture is you don't transport things far away, because then it becomes less fresh and you're paying a lot of your food money to oil companies. The portion of your food bill that actually pays for the food becomes much less.

One of the problems now is that because goods come in from the southern hemisphere, the value of fresh goods when they're in season is diminished.

The WTO has found against countries that wish to exclude products because they weren't grown according to their standards. We have very high standards in Washington for organic growing. If people are allowed to bring in what they're calling 'organics' from other countries, it's going to lower the price and confuse the consumer.

We've been very happy with our system in Washington. [When Congress recently attempted to establish national rules for what is 'organic,'] we realized other states might not have such high standards. And as you go worldwide, it could be ridiculous.

The main thing I see [about world trade] is that it lowers agricultural prices around the world and devalues labor.

In America, certainly we've been educated to believe that lowest price is the most important thing, but that's obviously not true. Vital, live food is the highest goal, food that nourishes people and makes them healthy as opposed to food that's shipped halfway around the world and is pretty dead by the time it gets to people. It's just not sustainable to ship halfway around the world when most climates can support the growing of most anything anybody needs to live right nearby.

David Korten is one of most highly respected and well-credentialed critics of global capitalism. His 1995 book When Corporations Rule the World was a best-seller. A onetime faculty member at the Harvard Business School and an expert in international development, Korten recently moved back to his native Washington.

In general, people who live in or come to the Northwest value the quality of our natural environment, the special quality of living that the Northwest makes possible. By contrast, the whole nature and structure of a global economy is built around valuing money above all else, valuing growth for growth's sake, valuing the expansion of trade for its own sake. Values that relate to quality of life, to standards of employment, standards of environmental protection and so forth, all must be subordinated to the one value of opening markets and increasing global trade. It comes to be a very profound question as to what we in the Northwest most value.

Of course we hear continuously the argument that we are very trade dependent, and of course our economy is quite trade dependent. The argument begs the question: well, does that mean we want to become more trade dependent? More dependent on the uncertainties and demonstrated instability of a global economy that is not controlled by anyone? Or do we want to have a greater economic security and stability based on greater self-reliance on our own resources and markets? This would mean placing less emphasis on catering to corporations like Microsoft and Boeing that create international monopolies and focusing more on the stimulation of local enterprises that are based on the sustained management of our natural resources, producing things that we need and that contribute to the quality of life in the Northwest.

One of the things we need to face, which Boeing reminds us of periodically, is that so long as our economy is so dependent on two organizations, we are extraordinarily vulnerable. Because they could at any time pull out if they believed that someplace else was giving them a better deal with better tax breaks and better subsidies. Microsoft could decide, 'Well, we'd be better off moving all our software operations to India where the labor's a lot cheaper.' To the extent that money and goods are allowed to flow totally freely, then there is very much a bidding down of standards. You see it in the US with the competition between states as to who's going to give the biggest tax breaks, provide the most public funding, the most land and facilities and kickbacks on employment taxes. You take that to a whole new order of magnitude when you start building in competition with places like India, China, Bangladesh.

And of course one of the moves of the WTO is to bring in more investment guarantees, so that companies are freely able to move their investments wherever they like with [the assurance] that no kind of regulations will be put in place that might encumber their profits or limit their ability to move somewhere else again if they wish, so that from any location in the world they can freely serve the markets of any other country. What this means is it becomes very difficult for any community to establish standards that are higher than the lowest standards in place in the world.

Of course we're told constantly by the propagandists that 'We're doing this all for the Third World.' Let's be serious: Are our largest corporations going to put such serious energy behind the WTO because it's going to help the poor? When we're importing vegetables from Mexico, that means that land is not being used to grow crops that Mexicans eat. That's the kind of dynamic you see around the world. By lowering our own standards and wages, trashing our own environment, we're not really doing anything to help people in other countries, we're just shifting more wealth into the pockets of the small percentage of the world population that owns most of the shares of corporate stock. In the end this is all about corporate profits.

Brian Derdowski has been the most vocal opponent of the WTO among local politicians. A Republican member of the King County Council for 10 years (who recently lost reelection), Derdowski is also one of the region's strongest champions of growth management. He worries about the way the WTO might inhibit our ability to regulate growth.

The WTO is only a few years old. So the impacts to our region, to our governance and regulations, are primarily potential. But the way this dangerous organization works, you don't know what they're doing until it's too late.

Take, for example, the issue of "takings" [wherein the government has to compensate landowners for government actions that devalue their property]. In this country, "takings" has been interpreted by the Supreme Court as involving the reduction in most of the value of a piece of property. But the definition of "takings" is much more lenient and corporate friendly in international law than in our domestic law. Under international standards a "taking" can involve any reduction in value. If the international definition were the law of the land in the US, virtually every regulation that King County has adopted in recent years would be a "taking" for which the federal government would have to compensate [the property owner].

Let's say that a foreign corporation buys some local timberland (there's tons of foreign land ownership here; Canadian money is all over town), and that timberland is zoned for one house per 20 acres. Suppose the county decides that in order to combat sprawl, it wants to downzone the land to one house per 80 acres. Well, if you're a foreign investor and you bought that land and you're the only one getting downzoned—which is not unusual for one or two property owners to bear the brunt of rezones of this sort—then you would have a very strong position to claim that you were the victim of a "taking." If a WTO tribunal, meeting in secret, determines the King County rezone to be illegal, then the federal government would pay a fine—or pressure King County to change the law.

Often threat and perception is as important as reality. A developer could come in and argue that a proposed rezone is contrary to federal law and that we risk getting the federal government mad at us. I believe the potential for that scenario exists today. It's only limited by the creativity of the mind of an international lawyer.

If a sophisticated lobbyist goes to an unsophisticated local government and pulls out a big brief and says, 'Do you realize that under Treaty Section Umptee-ump Umptee-ump, it says this, and what you're doing is therefore illegal and inconsistent with international law?,' do you think some city council member from Black Diamond is going to be able to stand up to that?

If there were even one case like this, it would be enough to march in the streets over. If we don't get this straightened out, if we don't successfully defend the constitutional separation of powers between state, federal, and local government in this connection, in respect to locally adopted laws to govern product labeling, environmental protection, consumer protection, and so on, and if the power to make those decisions is, in fact, vested in this body [the WTO], then it is not a question that we might lose our democracy, we have lost our democracy.

Patti Goldman is a staff attorney in the Seattle office of Earthjustice Legal Defense Fund, an environmental law firm affiliated with the Sierra Club.

Washington state's Department of Ecology has agreed to phase out some toxic pollutants [such as dioxins and mercury]. But the WTO has a whole series of rules about when a country can do that—rules that look at whether there is good enough scientific evidence of harm [from the chemicals], whether there are other ways to prevent the harm, can you have more restrictions on use and disposal rather than banning the chemicals altogether, etc.

There's a challenge going on now, for example, to an asbestos ban in France, where the argument is, 'Well, they should use protective clothing.' The US has been challenging a European Union proposal to ban certain toxic chemicals in electronics equipment with that same argument: 'Oh, there's other things that can be done, you could have landfills that are better lined, etc.' There's a lot of arguments that can be made: 'They should this, they should do that, anything but this step that's going to cost us money.'

WTO rules also require strict evidence of harm. What's known as the "precautionary principle" isn't in the WTO. So if you say 'There's some evidence of risk but we can't really prove there's harm,' that may not be good enough.

If we wanted to require labeling on coffee or some other product to indicate how it was produced—whether it was shade grown, etc.—that probably wouldn't be allowed either, because one of the core principles of the WTO is there shouldn't be discrimination against 'like' products. But 'like' is defined when a product enters international commerce, and when it leaves. So everything up to the point when, say, the wood becomes a two-by-four, isn't included. It also doesn't cover what happens after the useful life of the product is over, how it must be disposed.

Kathy Fletcher is the head of People for Puget Sound, an environmental advocacy group.

We're mostly concerned about issues surrounding ships that enter Puget Sound. Ships need to ride low in the water, and if they're not fully loaded with cargo they need to take on water. The ships typically take on ballast water in a port, then cross the ocean, and empty it in some other place. [Unfortunately, this is] a very efficient way to carry organisms, including bacteria and viruses, plankton and larvae of fish and crab, great distances. The European green crab, which is a voracious eater of shellfish larvae, invaded San Francisco Bay this way and is now making its way up the coast to Puget Sound. There have been examples in other ports in the US where cholera bacteria have been discovered in ballast water.

We are not currently protecting ourselves against ballast water problems, but we need to. You can exchange ballast water while still in middle of the ocean. Or you can arrive in port and pump water ashore and have it treated or treat it onboard. [But a solution to this problem isn't likely to happen] at the international level because of the power of the shipping industry. The WTO is very likely to adopt a global approach that will preclude the US, or any state, from taking protective action. The more I learn about this, the more I think it could pop up in some very strange ways. Could we at some future date regret being tied into these global agreements?

Ron Judd is executive secretary of the King County Labor Council, a coalition of trade unions.

We're not against trade. A huge percentage of the people I represent—machinists, longshoremen, truck drivers—their paychecks every week are delivered because they're trading a product. But everything the WTO is trying to accomplish through their rule-making agenda is potentially bad for workers in this area. The system is rewarding corporate bad behavior. We can't compete with another country where there's no health care, no retirement, no social security, no unemployment insurance. It ought to be a rule-based system, but the rules, as they're being applied, are driving down standards for labor, community, and the environment.

You know the WTO wants to stop countries from subsidizing industries like agriculture, steel, and shipbuilding. But if the same country is suppressing union activity, destroying the ability of workers to organize [and thereby suppressing wages], they don't consider that a subsidy. It's not on the table because we haven't been at the table. If a company or a country is violating worker rights, they ought to have economic sanctions filed against them just as they would if they violated a patent. Why do products have more protection than people?

They say they want to 'give consumers the maximum options for the least cost.' But when Nike moved its sneaker factories to Indonesia, the price of the shoes didn't go down. When a car company shuts down a UAW plant and moves to the maquiladora in Mexico, a $40,000 SUV still costs $40,000. Is this about minimizing the cost to the consumer or minimizing the cost of production in order to make more profit?

Up until now, most of the stuff has been about protecting goods. Now for the first time they're talking about adopting rules for the service sector. This could be a threat to "prevailing wage" contracts. All construction projects that use public money have to be "prevailing wage": companies that bid on the job aren't allowed to compete on wages, they have to find savings somewhere else. We think a Canadian firm could make the argument that "prevailing wage" is a trade barrier.

When we decided to build new ferries in the '80s, we passed 'Build Them in Washington' legislation to ensure that they were built in Washington state. We had ailing shipyards and wanted to keep the local tax money within the local economy. We know that probably would not hold muster under the WTO.

 
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