Free Trade Agreement Needs Closer Scrutiny

Daniel F. Bonham, Statesman Journal Few people know that a free trade pact led directly to the financial crash of 2008. It's true. Part of the World Trade Organization (WTO) agreement ratified in 1999 required the U.S. to repeal the Glass-Steagall Act of 1930 that regulated the size and scope of financial institutions; whose repeal, as we now know, led to the 2008 financial crisis and housing market collapse. Few people know that since the various Free Trade Agreements (FTAs) have come into effect, Oregon has had a net loss of tens of thousands of jobs. It's true. Over the past year alone (from July 1, 2009, to June 30, 2010), 10,902 Oregonians were certified by the U.S. Department of Labor as losing their jobs due to either direct offshoring or displacement by imports. Trade-related job loss is already a significant source of the state's current and ongoing unemployment problems. Supporters of FTAs such as a proposed agreement with Korea, point out that value of U.S. exports have increased by eliminating tariffs. This is also true; but Free Trade advocates extol "revenues"; they do not point to corresponding job increases because, in fact, they are negligible at best. Few people know about the "investor protections" in FTAs requiring host governments to compensate foreign "investors" (read: large multinational companies) for acts of "direct or indirect expropriation" or "measures tantamount to expropriation"; meaning, that if a foreign company decides that their profits are impacted by our state or local regulations they can sue Oregon, or a county or city in Oregon, to make up for their estimated profit losses. It's true. Many suits based on these provisions have been filed against governments with a WTO tribunal called the "Dispute Settlement Body." The tribunal is not under the jurisdiction of local or national courts and its findings can only be appealed to the WTO "Appellate Body." Predictably, most of these suits have been found in favor of the "investor." Chapter 11 of the Korea Free Trade Agreement contains these provisions. It's true. The proposed Korea FTA contains investor protection provisions that are more potent than past FTAs and grants "investors" extraordinary new rights to challenge laws, regulations and even court decisions as "regulatory takings" in the WTO tribunals that circumvent the judicial systems of both the U.S. and Korea. The proposed Korea Free Trade Agreement poses a real threat that the Chapter 11 investor protections will be exercised in Oregon. It's true. The Korea FTA is the largest since NAFTA. Korea is the largest, most industrialized country ever to be considered for a bi-lateral FTA. It is inevitable that a large Korean manufacturer or construction company will want to do business in Oregon and decide that our land use, environmental or prevailing wage regulations will impact their profits and seek redress through the WTO. The Korea FTA will be introduced for a vote in Congress soon — likely in July. Oregon's members of Congress should take into account these little-known facts before deciding how to vote. Read original post here.