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Montana Viewpoint

IT DOESN’T HAFTA BE NAFTA

January 19, 2004

Just as there is a growing alphabet soup of international trade agreements (NAFTA, GATS, TAA), there is growing and warranted concern from American state and local governments about language in them that gives foreign governments, and in the case of NAFTA, foreign individual investors, a significant say in how our American state and local governments protect our citizens, economies, and natural resources. Those concerns are succinctly stated in a July 2, 2003, letter from the National Association of Attorneys General to U.S. Trade Representative Robert Zoellick: “...the general framework [of GATS] seeks to promote trade in services by neutralizing [state] regulations, programs, and policies that other nations consider to be inappropriate, burdensome, or unnecessary....”

Isn’t that just ducky! Simply put, these agreements give other nations the right to sue the United States if American state or local governments have regulations in place that violate international trade agreements. The United States government may then bring pressure to get rid of the pesky regulation.

This is not a mythical scenario. Currently two Canadian companies—Methanex and Glamis Gold Ltd.—are separately suing the American government for a combined total of about one billion dollars because of California laws which protect California citizens in the way Californians see fit. Unhappily, they also limit the Canadian companies’ ability to earn profits.

Even though reciprocal privileges are given to the United States (currently Waste Management is suing Mexico because the city of Acapulco won’t let them put in a toxic waste dump), it doesn’t make me feel any more at ease. It is still a case of foreign interests dictating state and local policy.

These agreements are negotiated by the office of United States Trade Representative Robert Zoellick, approved by the Senate, and signed by the President. The concerns that individual states might have about how the treaties affect their laws seem to be met by Mr. Zoellick’s office with a silence that should speak volumes. Legislators from California, Washington, and Idaho have written Zoellick, and so far as I know, have not had a response.

My legislative neighbor in Idaho, Rep. George Eskridge (R-Sandpoint), is the Chair of the Idaho Legislative Energy Committee. Idaho has serious concerns about NAFTA trumping Idaho laws governing electrical supply and the Idaho laws governing the water that’s used to produce that energy. (Montana needs to have similar—almost identical—concerns.) To address this, Eskridge’s committee sent a letter to Zoellick asking him to respond to some questions in that regard. They have received no response.

In an effort to combat the lack of influence that individual states might have regarding international service and trade agreements—Congress simply doesn't seem to care—Eskridge, in conjunction with the Harrison Institute of Public Law at Georgetown University, is putting together The Working Group on Energy and Trade Policy which hopes to become a liaison between states and Zoellick’s office.

Montana needs to participate. Recently, the Stillwater Mine, Touch America, and ASARCO have all been bought by foreign concerns. The Montanore mine near Libby is owned by a Canadian company. Finally, Montana’s electrical energy laws, like Idaho’s, violate the provisions in NAFTA. NorthWestern Corporation, Montana’s major electrical energy transmission company is in bankruptcy and may have to be sold. If it were to be bought by Canadian investors the potential for conflict becomes reality.

At issue is whether American state and local governments will cede their sovereignty—their ability to implement laws and regulations protecting their own citizens, economies, and natural resources—to an international trade association. I am not a protectionist, isolationist, nor am I offended by other nations acting in their own self-interest. I know international trade is important, but I also know that it’s not worth trading our birthright for. Zoellick—and Congress—need to be made to understand that.

Jim Elliott
Phone: 406-444-1556
Mail: State Senate Helena, MT 59620

jim@jimelliott.org