SysOp's Arsenal/SysOp's Arsenal 1 (Arsenal Computer).ISO/govwatch/gatdem.txt

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GATT Facts:
GATT and Democracy

David C. Korten, People-Centered Development Forum

Much of the world has rejoiced in recent years at the important gains
that democracy has made around the world. Yet few people are
aware that the world's governments are at this very moment falling
in line to ratify an international agreement that could seriously
weaken the functions of democratically elected bodies nearly every
where on the planet. The agreement is known as the General
Agreement on Tariffs and Trade (GATT). The new GATT agreement
recently finalized by the world's governments and now awaiting
ratification by legislative bodies would give to an unelected and
secretive global organization veto power over most decisions relating
to the regulation of commerce and the setting of labor, health and
environmental standards that now reside with democratically elected
bodies in nations and localities around the world. Yet this agreement
is expected to pass without consequential opposition.

WTO will have broad powers
Presented to the public as a trade agreement intended to promote
global prosperity through free trade, it is far more.  Among other
things it would create a powerful World Trade Organization (WTO)
with a legal personality similar to that of the United Nations, the
World Bank and the International Monetary Fund and give it powers
the GATT never had. For example:

*  A particularly key provision buried in Paragraph 4 of Article XVI
states that: Each member shall ensure the conformity of its laws,
regulations and administrative procedures with its obligations as
provided in the annexed Agreements.  The annexed agreements
include all the substantive multilateral agreements relating to
trade in goods and services and the agreement on intellectual
property rights.  This provision thus obligates each member
country to revise any national or local laws in conflict with the
provisions of the GATT.

* Provision is made for one country to challenge the domestic laws of
another country when it believes a particular law impairs benefits
it expected from the trade rules or impairs the attainment of any
objective of the GATT.

* Challenges may also be brought against state and local laws, with
the national government obligated to take all reasonable measures
to ensure compliance. Under GATT precedents such "reasonable
measures" would include preemptive legislation, litigation and
withdrawal of financial support.

* Essentially any local or national health, safety or environmental
standards that exceed international standards set by an unelected
body may be challenged as trade barriers unless the offending
government can prove to the satisfaction of the WTO panel that a
number of narrowly restrictive provisions have been satisfied. The
burden of proof rests with those who would set standards higher
than the international norm.

* Such challenges will be presented in secret hearings to panels
comprised of three trade experts. There is no provision for
introduction of alternative perspectives, such as amicus briefs from
non-governmental organizations, unless the panel chooses to solicit
them. Documents presented to the panels are secret except as a
government chooses to release its own documents. The
identification of the panelists who supported position and
conclusion is explicitly forbidden.  Under the proposed rules the
recommendations of the review panel are automatically adopted
60 days after presentation unless there is a unanimous vote of all
WTO members to reject them. This means that over 100 countries,
including the country that won the decision, must vote against a
panel decision to overturn itQrendering the appeals process
virtually meaningless.

* In making its determinations, the primary concern of the WTO is to
facilitate trade. Other public policy goals relating to, for example,
the environment, health, safety, labor rights or even the economic
impact on the economy of the locality whose laws are being
challenged are all subordinated to the overarching goal of
promoting international trade.

* When a panel decides that a domestic law is in violation of WTO
trade rules it may recommend that the offending country change
its law. Countries are then expected to change the offending law
accordingly within a prescribed period. If not, trade sanctions may
be applied to force it to do so.

*  Changes to certain trade rules made by a two-thirds vote of the
WTO members become binding on all members. Standing
committees of the WTO would also be empowered to initiate
negotiations on new rules. In effect, the WTO would become a
powerful unelected global legislative body able to amend its own
charter without further referral to national legislative bodies.

Local laws may be challenged
There is no way to say for certain what national or local laws might
eventually be challenged and overturned by the WTO.  However, the
following are examples of laws that have been challenged as trade
barriers under the GATT or which according to experts would
become subject to challenge under the WTO:

* Prohibitions against the use of bovine growth hormonesQa measure
advocated by consumers, animal welfare groups, veterinarians,
farmers and most of the dairy trade.

* Prohibition of the sale of tuna captured by methods that endanger
dolphins.

 * Prohibitions on the export or import of tropical timber.

* Requirements that locally harvested timber or other resources be
processed locally to provide local employment.

* Restrictions on the sale of foods with pesticide residues that are
higher than standards approved by an international panel.

* Standards, such as a California law requiring that the public be
warned before being exposed to cancer-causing substances or
toxins, that are set by popular referenda rather than by a
professionally staffed regulatory body acting solely on the basis of
scientific principles and risk assessment.

Secret panels empowered
Evidently, in the view of the architects of the WTO, the people have
no business making decisions about their own health and well-being.
In the eyes of these architects, only experts meeting in secret have
such right. Consequently, the WTO will empower panels of three
unelected and unaccountable trade specialists acting in secret to set
aside the democratic will of any people as expressed through popular
referendum or through the legislative action of elected and publicly
accountable representatives whenever in their judgement doing so
would advance the cause of free trade.

By the logic of this agreement the wishes and democratic rights of
the world's people must give way to a higher public good, the right of
corporations to pursue profit where they will without the
interference of local people or their elected officials. Any law put
forward by people in any locality or nation that is a member of the
WTO and that some influential group somewhere in the world deems
unfavorable to its commercial interests may be challenge Q without
democratic or judicial recourse for the people whose will has been
set aside.

GATT places trade above all other priorities
Certainly there are benefits from trade, but they are neither of
sufficient consequence nor so widely shared as to justify placing free
trade above all other public interests and removing from the people
their right to decide when trade interests should receive priority and
when not.

If the WTO (GATT) passes it will be nothing less than a coup de grace
for the principle that sovereignty resides with the people Q the
foundation of all democratic governance. At this point only an
outraged public can stop this blatant assault on the democratic right
to self-governance.

David C. Korten is president and a fellow of the People-Centered
Development Forum.

For more information, contact:

People-Centered Development Forum, 14 East 17th Street, Suite 5,
New York, New York, USA. Telephone, [phone]; fax (212)
242-1901.

Public Citizen, 215 Pennsylvania Avenue SE, Washington, D.C. 20003,
USA [phone]; Fax [phone].

Parents for Safe Food, 5-11 Worship Street, London ECA2A 2BH,
United Kingdom, (44-71) 628-2442; Fax [phone].

Institute for Agriculture and Trade Policy, 1313 Fifth Street SE, Suite
303, Minneapolis, Minnesota 55414 USA. Telephone, [phone];
fax, [phone].