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Under Threat:

Under Threat:. Workers and democracy under the new generation of trade deals. Minnesota Fair Trade Coalition. By: Resource Center of the Americas & Labor Education Service, University of MN. Evolution of global free trade rules. A corporate global agenda

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Under Threat:

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  1. Under Threat: Workers and democracy under the new generation of trade deals Minnesota Fair Trade Coalition By: Resource Center of the Americas & Labor Education Service, University of MN

  2. Evolution of global free trade rules • A corporate global agenda • growth of multi-national corporations – national borders become less important • growth of service sector – 60% globally • political agenda to maximize profits emphasizing privatization and deregulation • “Less government is better” • extends “less government” philosophy into trade in goods and services • addresses not just tariffs, but “non-tariff trade barriers” • government rules, policies, subsidies, laws, regulations, court decisions

  3. The result: millions of good jobs lost In recent years, Free Trade Agreements have cost this country millions of good jobs. • 3,000,000 manufacturing jobs lost to free trade since 1994 • Over 750,000 jobs lost under NAFTAalone

  4. Sweatshops-R-Us Globalization • Many jobs sent to poor countries • Work often done under sweatshop conditions • Workers often denied unions and basic human rights

  5. Trade deals of the 1990s, such as NAFTA, focused mainly on trade in manufactured goods. • The point was to increase manufacturing profits by lowering the living standards associated with manufacturing work • So manufacturing workers bore the brunt Now the barons of global capitalism have their eyes on the living standards of service workers.

  6. New Trade Deals and Democracy • Negotiations are underway on: • FTAA(Free Trade Area of the Americas) • GATS(General Agreement on Trade in Services) • These agreements could: • mandate privatization of government services • threaten environmental protections, safety and human rights laws. • undermine worker rights and protections

  7. We’ve all heard of NAFTA …

  8. NAFTA(North American Free Trade Agreement) • Took effect January 1, 1994 • Between U.S., Canada and Mexico • Applies mostly to goods and commodities; first trade deal to include some services (trucking, legal, engineering, etc.) • Focuses on “non-tariff barriers” (government rules, environmental and safety regulations, etc.)

  9. NAFTA’s Devastating Effects • 750,000 jobs (mostly in manufacturing) lost in the United States • Mexican manufacturing wages drop 23%

  10. FTAA NAFTA Now … The Bush administration wants to put NAFTA on steroids.

  11. FTAA(Free Trade Area of the Americas) • FTAA extends NAFTA to 34 western hemisphere nations • FTAA greatly expands coverage of NAFTA • Negotiations aim to be done in 2004 -- voted on by Congress in 2005

  12. NAFTA also contains Chapter 11 • Suing GovernmentsAllows “investors” (directors, executives, and shareholders) to sue foreign national governments for damages can sue for: “measures tantamount to nationalization or expropriation” Chapter 11 was meant to protect corporations from having assets seized or nationalized.

  13. In 1998, the WTO ruled new U.S. clean air standards were barriers to free trade – and they forced the U.S. to change them. • Under NAFTA Chapter 11, a Canadian company sued the U.S. for almost $1 billion when California banned a toxic gasoline additive. But these trade rules are now eroding our democratic process.

  14. The Next Generation: Going after services

  15. GATS(General Agreement on Trade in Services) • Goal is to cover all services, all methods of delivering services, and every government measure at all levels affecting trade • GATS is administered by the World Trade Organization (WTO) • GATS covers 146 nations, including U.S. • Negotiations aim to be done in 2004 -- voted on by Congress in 2005

  16. Potential services covered by GATS: • Professional (legal, nursing, computer, etc.) • Communications(postal, radio and TV, video, etc.) • Construction (general building, installation, assembly, etc.) • Distribution (wholesale and retail trade) • Educational (higher education, primary and secondary ed) • Environmental (sewage, waste disposal, sanitation, etc.) • Financial (health and life insurance, banking, etc.) • Health and Social (hospitals and social services, etc.) • Tourism and Travel (hotels, restaurants, agencies, etc.) • Recreation and Cultural (theater, news agencies, libraries, museums, parks, etc.) • Transport (passenger and freight, pipelines, etc.)

  17. This includes public services • Covers government services • exempt only if public service is not • “commercial”(i.e. charges a fee) • “competitive” (i.e. there is a competing private sector provider) • GATS aim: privatize public services

  18. GATS targets all government measures • rules • policies • laws • subsidies • regulations • court decisions

  19. GATS limits what laws we can pass • Will likely prohibit measures that are “more burdensome than necessary” for foreign companies or give an advantage to local companies • Measures would have to be the “least trade restrictive” possible • Would prohibit government from setting conditions on awarding contracts except those necessary for product quality or supplier capability

  20. Sample MN Laws at Risk • Prevailing wage • Corporate subsidy reform reporting and wage standards • Corporate feedlot restrictions • Electricity rate regulations • HMO non-profit requirement • Cost clean-up requirements for pipeline spills • Many other environmental, labor, and corporate accountability laws

  21. These new trade agreements threaten our jobs and basic labor standards …

  22. New Trade Deals and Construction Workers • GATS and FTAA could: • undermine prevailing wage laws • undermine union wages and jobs • undermine project labor agreements

  23. Prevailing wage threatened • Would likely be judged “more burdensome than necessary” for foreign construction firms • Prevailing wage laws could be attacked for going beyond what is necessary to ensure service quality or supplier capability

  24. Project Labor Agreements ? Project labor agreements threatened • Agreements that require union labor could be prohibited • Would likely be judged to go beyond what is necessary to ensure quality, or be the alternative that is least restrictive to trade

  25. Temporary Foreign Workers • New GATS rules will almost certainly make it easier to import temporary foreign construction workers “[GATS negotiations are now] addressing issues that were previously considered to be untouchable due to their political sensitivity (e.g. visa and immigration procedures)” -- high ranking WTO official

  26. India’s Proposal • Service workers (including construction workers) could work in other countries under “GATS visas” • Companies would not even have to follow the country’s minimum wage laws • WTO internal memo: India’s proposal is getting “serious attention” from U.S., the European Union, and others

  27. GATS workers as indentured servants As proposed: • GATS visa workers would have few rights or protections • Workers who tried to form or join a union could find themselves fired or deported

  28. New Trade Deals and Public Workers • GATS and FTAA could: • Could require many public services to be opened to bid by private foreign companies • Public employees would have to compete with these foreign service corporations to try to keep their own jobs

  29. So, What public services are targeted?

  30. Water Services • Water collection, purification and distribution • Waste-water treatment Many of these services are now provided by municipal water districts and staffed with union public employees

  31. This continues a corporate push to control water supplies

  32. The World Bank estimates a fully-privatized global water market is worth $800 billion a year

  33. Rebecca Mark, former CEO of Enron’s Water Division, said she would not rest until she had: “fully privatized the global water market.”

  34. Enron worked closely with the Bush administrationto define U.S. goals for GATS Surprise …

  35. Waste Management Services • Waste management is also targeted under GATS GATS will likely allow foreign firms to bid on municipal sanitation and incineration work – areas already under heavy pressure from privatization.

  36. Air and Water Protection Services • Protection of ambient air and climate GATS will likely allow foreign firms to bid on the work currently done by the U.S. Environmental Protection Agency (EPA), state Pollution Control Agencies (PCAs), perhaps even OSHA.

  37. Environmental Protection Services • Protection of biodiversity and landscape GATS targets for privatization services that include work done currently by the National Parks Administration, U.S. Forest Service, Bureau of Land Management, and state Departments of Natural Resources

  38. Transportation Services • Urban mass transit and other transportation services GATS could allow foreign firms to bid on mass transit services – buses, trains, metro mobility, etc. It may even include school bus transportation.

  39. Education Services • Higher education, adult education and various training services Currently negotiations are underway to cover all education beyond secondary school.

  40. New Trade Deals and Postal Workers • GATS and FTAA could: • mandate privatization of postal services • undermine prevailing wages under the Service Contract Statutes

  41. Postal services targeted • Both the European Union and the United States are specifically seeking to include postal services under GATS rules

  42. So, What specific postal services are targeted?

  43. Europe wants open to bid … • theclearance • sorting • transport • anddeliveryof “addressed written communications on any kind of physical medium.”

  44. United States is targeting • express delivery servicesthat are subsidized by government monopolies -- like those provided by the USPS. This is only what we know so far.

  45. With both the U.S. and E.U. targeting postal services … it is likely that GATS will cover many USPS services.

  46. And, this means: • USPS services covered by GATS will beopen to bidding by private foreign companies.

  47. But that’s not all … • Since GATS and FTAA will also likely prohibit governments from setting conditions for awarding contracts except those necessary for product quality or supplier capability…

  48. The Service Contact Act would almost certainly not meet this test. • The Service Contract Act mandates prevailing wages for certain services – this goes beyond ensuring product quality or supplier capability.

  49. Democracy at Risk. • The new trade agreements challenge fundamental concepts of democratic government and national sovereignty. • And they threaten to put many key public services under corporate – not public – control.

  50. Let’s look at a hypothetical case … • Assume GATS rules are already in place This is how the new trade agreements might undermine democracy in local communities…

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