The WTO Trap
By William Norman Grigg
The New American, January 10, 2005
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The World Trade Organization, a Geneva-based body composed of foreign
bureaucrats, will control our nation's economic destiny unless we get
out -- now!
A delegation of U.S. cotton farmers had their "day in court" on
December 13, seeking relief from a damaging regulatory ruling. The
"court" to which they made their appeal was a dispute resolution panel
of the World Trade Organization (WTO), a 148-nation global body
headquartered in Geneva, Switzerland. The U.S. cotton farmers were
forced to appeal to the foreign "court" because the U.S. government
illegally ceded part of our sovereignty to the WTO, and the farmers
have been caught in the repercussion of that action.
Last September, noted the December 7 Delta Farm Press, a three-member
WTO panel ruled that a number of federal assistance programs for the
cotton industry are "prohibited export subsidies" that created
"significant suppression of world cotton prices in marketing years
1999-2002, causing 'serious prejudice' to Brazil's interests." This
isn't to say that the WTO uniformly bans all such subsidies. Article
13 of the WTO Agreement on Agriculture allows national governments to
provide agricultural subsidies, but the global trade body claims the
authority to nullify any subsidy it deems inappropriate -- and to levy
punitive fines and taxes to enforce its rulings.
As has been its habit, the Bush administration reacted to the
September decision by expressing resigned disapproval -- and an eager
willingness to abide by the WTO's final decision. This left U.S.
cotton farmers to seek relief from the same foreign globalist body
that had issued the injurious decision. "We have been preparing our
defense," explained John Maguire, senior vice president of Washington
operations for the National Cotton Council. "The U.S. Government is
our attorney in this case." What this means is that, "win" or lose,
the Bush administration would validate the WTO's authority to regulate
our nation's economic policy.
This was neither the first, nor the most recent, instance in which the
WTO has issued a strongly anti-U.S. ruling. In March 2004, the body
ruled that congressional legislation banning Internet gambling
violates the terms of the General Agreement on Trade in Services
(GATS). Described as a measure intended to facilitate free trade in
services, GATS is not an agreement, or even a set of agreements.
Instead, it is an open-ended process in which hordes of anonymous
foreign bureaucrats review local, state, and federal licensing and
certification standards, and other supposed impediments to the global
free trade in services. Through the GATS process, all of our
legislative processes are thrown open to challenge by foreign
governments.
Shortly after the U.S. presidential election, the WTO issued what
would have to be considered its most dramatic ruling against U.S.
interests. As summarized by Newsday, a November 26 ruling "approved
punitive taxes long sought by the European Union and other countries
because of a law they say unfairly protects U.S. steel companies and
other industries." The law in question, commonly known as the "Byrd
amendment," authorizes the imposition of tariffs to protect various
industries from "dumping" -- that is to say, the subsidized export of
goods below production costs as a way of driving U.S.-based
competitors out of the market.
Under the Byrd amendment, formally known as the "Continued Dumping and
Subsidy Offset Act of 2000," money collected through the tariffs could
be paid to U.S. companies who file anti-dumping complaints. Over the
past three years, some $700 million has been paid out. In response to
a European Union complaint in 2002, the WTO ruled that the Byrd
amendment was "illegal." This is to say that a Geneva-based global
body, composed of foreigners who are not accountable to U.S. citizens,
presumed to exercise judicial review over a law that -- whether
considered wise or foolish -- was properly enacted by Congress and
duly signed by the president.
The November 26 WTO ruling compounds that outrage by authorizing the
imposition of "punitive taxes" against the United States. "While quite
small initially," noted Newsday, "the level of punitive duties will be
reviewed each year and could rise sharply. The value of the sanctions,
on everything from sweet corn to metals and textiles, hasn't been
determined, but trade officials estimated them at more than $150
million a year."
The WTO ruling clears the way for "the EU, Japan and five other
governments … to slap tariffs on American imports … unless Congress
repeals the so-called Byrd amendment," noted the Bloomberg financial
press service. Surely President George W. Bush, a man reviled by his
detractors as a "unilateralist" and hailed by his defenders as a stout
defender of national sovereignty, rejected this brazen assault on our
national independence and prosperity.
Guess again.
Asked about the ruling during a November 26 press conference at his
Crawford, Texas, ranch, Mr. Bush replied: "We've worked hard to comply
with the WTO. It's important that all nations comply with WTO rulings.
I'll work with Congress to get into compliance." After promising to
defer to the global body's supposed authority, Bush attempted to
strike a resolute pose, mewling: "We expect the WTO, as well, to treat
our trading partners as they treat us. And that's why, for example, I
filed [a] complaint on the Airbus situation. We believe that the
subsidies for Airbus are unfair for U.S. companies, such as Boeing."
But this amounted to a tacit admission on Mr. Bush's part that he
expected the WTO -- once again, a body composed of bureaucrats
representing America's foreign economic competitors -- to protect our
nation's interests.
Caught in the WTO Web
President Bush's enthusiasm for WTO-supervised global "free trade"
explains why "you could almost hear a collective sigh of relief" from
foreign capitals over his re-election, stated the December 2 Christian
Science Monitor. "Because of the administration's strong commitment to
free trade, the United States looks ready to push for even more
international agreements that trim barriers to commerce." But the
"free trade" agreements in question -- which include the North
American Free Trade Agreement (NAFTA), the proposed Free Trade Area of
the Americas (FTAA) and Central American Free Trade Agreement (CAFTA),
and the WTO -- are not designed to bring about genuine free trade.
Properly understood, free trade results when a mutually beneficial
exchange occurs between buyers and sellers, unimpeded by government
intervention. The agenda being pursued by the Bush administration and
its foreign cohorts, by way of contrast, defines attributes of
national sovereignty as barriers to "free trade" and seeks to destroy
sovereignty. At the same time, it builds a WTO-supervised global trade
regime. The result would be the loss of our national independence and
the delivery of our national economic destiny into the hands of
foreign bureaucrats who have no interest in our continued prosperity.
It is reasonable to believe that measures like the "Byrd amendment"
and the cotton subsidies are poor policy choices by the federal
government. Certainly, if the intent is to make U.S. exporters more
competitive, the rational approach would be to reduce or eliminate the
tax and regulatory burdens on those industries, rather than binding
them more tightly to Washington through subsidies. But U.S. policies
should not be decided by an international bureaucracy. And as we will
shortly see, the logic of the misnamed "free trade" agenda requires
that our central government manage trade according to the dictates of
the WTO.
Our Global Neighborhood, the 1995 report of the UN-aligned Commission
on Global Governance, described the WTO as "a crucial building block
for global economic governance.... The WTO and advanced regional
groups such as the EU [as well as the envisioned FTAA] will
increasingly be faced with the issue that will dominate the
international agenda in years to come: how to create rules for deep
integration that go way beyond what has traditionally been thought of
as 'trade.'"
The WTO is intended to dictate the rules governing regional trade
pacts such as NAFTA and the proposed FTAA. The European Union, on
which the FTAA would be modeled, regularly defers to the WTO's
jurisdiction, and -- as seen earlier -- the EU expects the United
States to do the same. Completion of the FTAA pact would effectively
compel our nation to submit to the WTO. Chapter II, Article 3 of the
most recent draft of the FTAA states that signatory nations will
comply "with the rules and disciplines of the World Trade
Organization."
The Constitution assigns to Congress the power of regulating commerce
with foreign nations, as well as imposing taxes and tariffs. No
provision of the Constitution allows Congress to delegate that power
to any other element of the federal government, let alone foreign
multilateral bodies like the WTO. And it should be remembered that
economic integration, as the Commission on Global Governance
intimated, leads to political integration and the loss of national
independence. Thus Congress' approval of U.S. membership in the WTO
was nothing less than an act of betrayal that borders on treason.
A decade ago, Congress approved U.S. membership during a "lame duck"
session of Congress. This was brought about through the bipartisan
cooperation of then-president Bill Clinton and Republican
congressional leaders Newt Gingrich and Bob Dole.
As Gingrich himself admitted in testimony before the House Ways and
Means Committee, approval of WTO membership was nothing less than a
"transformational" moment, a fundamental alteration of our system of
government:
I am just saying that we need to be honest about the fact that we are
transferring from the United States at a practical level significant
authority to a new organization. This is a transformational moment. I
would feel better if the people who favor this would just be honest
about the scale of change.... This is not just another trade
agreement. This is adopting something which twice, once in the 1940s
and once in the 1950s, the U.S. Congress rejected. I am not even
saying that we should reject it; I, in fact, lean toward it. But I
think we have to be very careful, because it is a very big transfer of
power.
Had Gingrich's professed reluctance been rooted in principle, rather
than a case of rhetorical posterior-protection, he could easily have
held up approval of the WTO until after the new Congress convened. But
he and his co-conspirators (no other word is adequate) were desperate
to thwart careful deliberation of the proposal by the new Congress,
which was loaded with freshman members leery of entanglement in
multilateral bodies.
In any case, Gingrich accurately recounted the history of the WTO and
its aborted predecessor, the International Trade Organization.
Previous efforts to subordinate the U.S. to a global trade body had
come to naught precisely because Congress was able to exercise its
deliberative function. The WTO's backers didn't intend to allow our
country a third chance to escape the WTO trap.
Another House that Hiss Built
In the aftermath of World War II, a coterie of international elitists
proposed a constellation of multilateral economic organizations to
supplement the United Nations: the World Bank, the International
Monetary Fund, and the International Trade Organization (ITO). In
1947, a delegation of U.S. diplomatic officials attended a conference
in Havana intended to finalize the framework for the ITO.
Acting as chairman for the U.S. delegation to the Havana Conference
was none other than Alger Hiss -- the notorious Soviet agent who,
along with Soviet official V.M. Molotov, had co-written the UN
Charter. Hiss also served as secretary-general for the UN's founding
conference in San Francisco. Critics of the UN have long described
that disreputable body as "The House that Hiss Built"; the ITO was, in
large measure, the work of the same treasonous architect.
Although the Senate approved U.S. membership in the UN with only two
negative votes in 1945, by 1947 public opinion regarding globalist
institutions had shifted significantly, and Congress had followed the
public's lead. Congressman Bertrand Gearhart (R-Calif.) described the
Hiss-led delegation at Havana as "boatloads of smug diplomats,
all-wise economists … experts, theorists, specialists and whatnots,
sailing gaily from our shores to barter away … the little factory in
Wichita, the little ship in Keokuk."
When the final draft of the ITO pact was presented in March 1948, it
met with insurmountable resistance from both Congress and the public.
Although the ITO agreement was depicted "as a charter to 'free world
trade,'" it was actually "a charter for trade control," noted George
W. Malone (R-Nev.). "The result of its adoption would have been
socialism, on a global plane."
Across the party divide, former Congressman Samuel B. Pettingill
(D-Ind.) agreed with Senator Malone. Pettingill opposed the ITO
"because it is part and parcel of international socialism,
one-worldism, and the slow surrender of American sovereignty." The
General Agreement on Tariffs and Trade (GATT), which the ITO was
intended to enforce, "calls for a vast complex of multilateral
negotiations with many nations in a sort of world super-legislature
where we have one vote," continued Pettingill. "Once wrapped up in
this spider web, it will be difficult indeed to recapture any
independence of action."
Business groups also spoke out in opposition to the ITO. "The entire
document reflects an excessive acceptance of economic planning,"
protested the U.S. Chamber of Commerce. The National Foreign Trade
Council warned that "if the United States subscribes to the charter it
will be abandoning traditional American principles and espousing,
instead, planned economy and full-scale political control of
production, trade, and monetary exchange. The charter does not reflect
faith in the principles of free, private, competitive enterprise."
Not surprisingly, although two attempts were made to secure
congressional approval for the GATT accord, the ITO charter was never
presented to Congress for ratification.
But for the Global Power Elite, "no" doesn't mean "no" -- but rather,
"not yet." The same globalist, socialist body that had previously been
decisively rejected was renamed the World Trade Organization and
secured approval in 1994 -- thanks to the timely help of globalists in
the Republican Party's leadership ranks.
"Pincers Movement"
The WTO and the United Nations, wrote Senator Malone in his prophetic
1958 book Mainline, are two arms of "a pincers movement … both on the
domestic and on the international scene." One arm of that pincers was
political -- the steady entanglement of our nation in international
alliances and multilateral bodies, particularly the UN. The other arm
was economic -- created by the Trade Agreements Act of 1934, in which
Congress ceded to the Executive Branch the power to control our
nation's trade policy.
Because of the 1934 act, wrote Malone, "the business and the
enterprise of individuals now were considered in close connection to
the policies of the State. The State would assist them in the
expansion of their markets. Government would negotiate the channels of
trade." In brief, "the State would determine trade," and the
president, not the Congress, would exercise that power.
The president, in turn, was given the means to surrender that
authority to foreign bureaucrats. And that betrayal has been carried
out by a succession of presidents from both sides of the narrow
partisan divide. As Malone warned more than four decades ago, "That
power is now being increasingly invested in international groups, and
removed from our Nation's control." As President Bush's deference to
the WTO illustrates, that body is rapidly assuming control over our
nation's economic destiny.
The ideological bent of the WTO can be inferred by a brief examination
of its director-general, Thai career politician Supachai Panitchpakdi.
As Thailand's deputy minister of finance, Mr. Panitchpakdi "introduced
the value-added tax system [and] laid the foundation for the
establishment of the country's Export-Import Bank," notes his official
vitae. As chairman of that country's International Economic Policy
Committee, he led the campaign for ratification of the WTO and
"ensured his government's full and faithful implementation of its
obligations" under that body.
As a graduate student at the Netherlands School of Economics (now
Erasmus University), Panitchpakdi was a protégé of the late Jan
Tinbergen, a Dutch physicist who won the 1969 Nobel Prize for
economics. Tinbergen, a resolute socialist and advocate of central
economic planning, donated his supposed expertise to the League of
Nations in the 1930s and became an unofficial adviser to numerous
non-aligned socialist governments following WWII. As a socialist,
recalls an official Erasmus University bio, Tinbergen firmly believed
that optimal economic and social conditions can be achieved by
rational government policies. In later years he applied these ideas to
the economic world order, but to his disappointment his proposals met
with little success.
Tinbergen passed away in 1994, shortly before the U.S. joined the WTO.
It's fair to assume that, were he alive today, he would feel a measure
of satisfaction over the unfolding WTO-administered global trade
regime.
Panitchpakdi's term ends next August. The odds-on favorite to replace
him is Pascal Lamy, a French official who has the support of the
European Union. Lamy, "a French Socialist, will compete for the
coveted Geneva seat in a race that -- at this stage -- looks likely to
include a Brazilian, a Mauritian, and a Uruguayan," noted a December
13 Reuters report.
Get Us Out -- Now!
But why should America's economic fortunes be placed in the hands of
any foreign body, headed by any foreign official of any ideological
background? The American colonists who withdrew from the British
Empire fought a war rather than allow a distant, unaccountable
parliament to claim the power in principle to impose taxes. Under the
emerging global trade regime, the WTO is actually imposing punitive
taxes against the United States, with the acquiescence and support of
both the president and Congress.
This need not continue. Under U.S. law, every five years (including
this year) any member of Congress can introduce a "privileged
resolution" to end U.S. membership in the WTO. Such a resolution must
be brought to the floor for a vote within roughly three months of
being introduced; it cannot be bottled up indefinitely or killed in
committee.
Five years ago, Rep. Ron Paul (R-Texas) took advantage of this
provision to force the full House to vote up or down on whether to get
the U.S. out of the WTO. "[U.S.] membership in the WTO actually is
illegal, illegal any way we look at it," Rep. Paul advised his
colleagues in a 2000 speech on the House floor. "If we are delivering
to the WTO the authority to regulate trade, we are violating the
Constitution, because it is very clear that only Congress can do this.
We cannot give that authority away. We cannot give it to the
President, and we cannot give it to an international body that is
going to manage trade in the WTO. This is not legal, it is not
constitutional, and it is not in our best interests."
"It is not up to the World Trade Organization to decide what labor
laws we have, or what kind of environmental laws we have, or what tax
laws," continued Rep. Paul. Other countries "can toss their own
sovereignty out the window if they choose. I cannot tell China or
Britain or anybody else that they should or should not join the World
Trade Organization.... I can, however, say that the United States of
America ought to withdraw its membership and funding from the WTO
immediately."
Rep. Paul's 2000 measure calling for U.S. withdrawal from the WTO was
lopsidedly rejected by a vote of 56 to 363. But now that the WTO has
begun treading on U.S. sovereignty, the result of a new vote to
withdraw from the WTO could be radically different -- if enough
informed Americans apply pressure on their congressmen to put America
first.
Readers are encouraged to ask their congressmen to support a
resolution calling for U.S. withdrawal from the WTO. Click here for
information on how to contact your own U.S. representative and
senators.
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