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Published: Monday, 10/18/2004

Trojan horse: Trade deals haven't met promise

COLUMBUS - In 1990, when Lori Wallach was a lobbyist for Public Citizen's Congress Watch, she began to examine how a proposed trade agreement among the United States, Mexico, and Canada would affect meat inspection.

"I thought trade agreements were about tariffs and quotas," said Ms. Wallach, who grew up in Wisconsin.

But she uncovered a very different story.

In her new book with co-worker Patrick Woodall about the World Trade Organization, Ms. Wallach outlines how a small fraction of the North American Free Trade Agreement and the WTO deals with "trade."

The WTO enforces 20 agreements. One of them, the General Agreement on Tariffs and Trade, focuses on trade and the agriculture agreement does partially - but the others don't and the result is a "slow-motion coup d'etat by paper," said Ms. Wallach, director of Public Citizen's Global Trade Watch.

"Think of WTO as a Trojan Horse using the good name of trade to put into place a vast array of domestic policies - extending patent terms for drugs; deregulating energy, financial services, and more; weakening food inspection standards - demanded by the largest of corporations including some policies previously rejected by democratically elected legislatures," Ms. Wallach said.

The key to change is to educate the public that citizens can do something about the current rules of globalization.

"The biggest thing we've got going against us is this psych-out job that the few beneficiaries have laid, which is it's inevitable. 'Oh, you're against NAFTA, you're an idiot. You must be a knuckledragger, a protectionist.'

"I know what we can do to change the actual rules. That's not the hard part. The hard part is building the political power," Ms. Wallach said.

The next battle is over the Central American Free Trade Agreement, which would expand NAFTA to six more nations. Congress may consider the CAFTA pact during its lame-duck session after the Nov. 2 election.

Ralph Nader founded Public Citizen in 1971, but he stepped down as president in 1980. Ms. Wallach, a trade lawyer with a degree from Harvard University, said she is taking vacation days to sit on a committee that is advising John Kerry on international economics.

Although Mr. Kerry, a U.S. senator from Massachusetts, voted for NAFTA and the WTO, he has said if elected President, he would place all trade deals under a 120-day review.

"If we defeat CAFTA through a big grass-roots effort and Bush is President again, he's basically up on drydock until he comes up with something else," Ms. Wallach said.

"If Kerry is President, he's already committed to renegotiating it, so the fight will start about 'What does that mean?' How big a fix does that need to be?" she added.

If you support access to affordable medicine, the CAFTA rule forbidding re-importation would have to be cut. If you want food to be safe and well-inspected, the CAFTA rule that limits border inspection and safety standards for meat and pesticides would have to be changed. If you back essential services like health and education, you would have to get rid of privatization and deregulation requirements in CAFTA's services agreement.

In his stump speeches in Ohio, Mr. Bush doesn't discuss CAFTA, but he does defend the current system of international trade.

" in order to make sure jobs are here, we need to open up markets for U.S. products," Mr. Bush said recently in Springfield. "It would be a mistake to adopt the policies of economic isolationism. Do you realize, one in five manufacturing jobs in America depend upon exports?

"If you're good at something, we ought to promote it. If you're good at growing crops, we ought to be selling crops all around the world. If you're good at manufacturing things, we ought to make sure you have a chance to do so If you've got more products to choose from, you're likely to get the product you want at a better price or higher quality," Mr. Bush said.

In Springfield, the county seat of Clark County, this part of his speech was greeted with polite applause.

In Clark County from 2001 to this year, 38.6 percent of all manufacturing jobs disappeared - the highest percentage in Ohio, said George Zeller, senior researcher for the Council for Economic Opportunities in Greater Cleveland, a nonpartisan group.

Ms. Wallach said the current rules of globalization have not fulfilled their promise. President Bill Clinton said the adoption of the WTO would lead to a $1,700 annual income increase for the average U.S. family. That hasn't happened any year, much less in each year, Ms. Wallach said.

U.S. export growth between 1994 and 2000 created an estimated 2.7 million jobs, but import growth eliminated 5.8 million jobs. Over the past four years, the nation has lost an estimated 2 million manufacturing jobs and real wages, when adjusted for inflation, are below 1972 levels, Ms. Wallach said.

"If we don't have people in the rich countries being paid enough to buy stuff, you can do whatever labor organizing you want around the world - you can dump foreign aid into countries - if there is no market for trade, that's it. You have an implosion.

"If we don't take the incoming data and do something with it, and change the policies, we're going to put ourselves in a position where we won't have any middle class left," Ms. Wallach said.



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