Why is a firestorm of opposition generated every time international
trade representatives and world leaders meet to negotiate the Free
Trade Agreement of the Americas (FTAA)?
Under new trade agreements now being negotiated by the U.S. government,
local and national governments can be put in the position of a)
being forced to pay polluters not to pollute, or b) to weaken laws
protecting the environment, clean water and food safety. Under the
provision of the new FTAA, laws protecting the environment, public
health and safety, and local sovereignty may be challenged by foreign
corporations as trade barriers.
The FTAA differs substantially from prior agreements such as the
North American Free Trade Agreement (NAFTA) and the WTO, which mainly
focused on such issues such as tariffs. This difference is the
source of much of the popular opposition to this latest agreement,
which is being written and negotiated in secret. Many environmental
and labor groups are seriously concerned about its potential impact.
The President has asked Congress to pass Fast Track Authority
this fall. Fast Track authority would require Congress, to pass
or reject the agreement without considering any amendments, even
though Congress has the constitutional responsibility to regulate
Commerce with foreign Nations. (Fast Track has
now been renamed the Presidential Trade Promotion Authority.)
What Is the FTAA
The FTAA is the name given to the expansion of NAFTA (the North
American Free Trade Agreement) that would include all of North,
Central and South America (except Cuba). The goal of this agreement
is to create a free trade and investment zone. The effect of FTAA
and the other recent global trade agreements is to open markets
to foreign competition, to reduce government regulations on transnational
companies and to limit the ability of local and national governments
to restrict investments, the sale of products or with whom they
What are the Effects of Investor Protections?
While the text of the FTAA agreement has not been made public,
it is expected that the controversial investor protections that
are included in Chapter 11 of NAFTA will also be made part of the
FTAA agreement. Chapter 11 has two principal requirements. One is
that foreign investors are not treated any less favorably than U.S.
corporations. The second prohibits the direct or indirect expropriation
of the investment of foreign corporations without compensation.
The no-less-favorable treatment poses threats to state and local
governments abilities to give preference to local businesses
for some types of purchasing. The provision of services by government
can also be challenged. The second requirement is the one that has
been the basis of damage suits against both state and local governments
for enforcing environmental laws such as those to ensure clean water
supplies. Following are two suits brought under NAFTAs Chapter
Safe Drinking Water At Risk
Two claims have been brought under Chapter 11 of NAFTA that undermine
the right of state and local governments to ensure a safe water
US Sued by a Canadian Corporation
It was discovered several years ago that a widely used gasoline
additive called MTBE was leaking from gasoline storage tanks into
Californias water supply. Added to gasoline to improve engine
performance, MTBE is also a carcinogen. It had been detected in
groundwater and surface water sources throughout California, forcing
officials to shut drinking water wells from Sacramento to San Diego.
To protect the states water supply, Californias Governor
Gary Davis ordered MTBE phased out. This ban triggered a drop in
the stock price of the Methanex Corporation, a Canadian company
that makes MTBE. In September 2000, Methanex sued the US government
for $ 970 million to pressure California to stop the phase out.
Methanex filed its complaint before the Centre for Settlement of
Investment Disputes that is authorized under NAFTA to arbitrate
disputes over investments. If the tribunal rules that California
deprived Methanex of its property and awards damages, the federal
government could, in turn, force California to roll back its MTBE
ban and/or pay damages.
US Company Sues Mexico
Last year a NAFTA tribunal ordered Mexico to pay $19 million in
damages to a US company, Metalclad Corporation. The state of San
Luis Potosi blocked Metalclads planned toxic waste storage
facility that threatened to pollute the regions water supply.
Metalclad had sought more than $90 million in damages. Mexico has
appealed the decision.
Other Attacks on Environmental Laws
Other claims have been brought that are similar to these. In 1998,
Canada was required to settle a NAFTA takings complaint
filed by the Virginia-based Ethyl Corporation over Canadas
ban on MMT, a gasoline additive known to damage the nervous system.
As conditions of the settlement, Canada reversed its ban on MMT,
paid $13 million to Ethyl, and publicly declared that MMT is safe,
despite known risks. 
What Can Be Done to Stop the Passage of the FTAA?
Educate yourself and others about the issues involved with the
FTAA. Websites of local groups provide excellent information. The
Alliance for Sustainable Jobs and the Environments Global
Working Group site is: www.fasttrackinfo.com, and the Local
to Global working group www.localtoglobal.org.
Write your congressperson about your concerns about the FTAA this
summer. Information is provided on the websites above or call Dolores
Hurtado of the Alliance for Democracy at 503 636-5049.
Noreena Hertz: Why we must stay silent no longer
At the headquarters of the World Trade Organisation on the
banks of Lake Geneva we see rulings being made in the names of the
free market that limit states' abilities to safeguard their people's
interests. When the European Union tried to ban synthetic hormones
from beef on the basis of strong evidence that they could cause
cancer, reduce male fertility and in some cases result in the premature
onset of puberty in young children, it found itself unable to do
so thanks to a WTO ruling which put the interests of Monsanto, the
US National Cattlemen's Association, the US Dairy Export Council
and the National Milk Producers Federation first.
Time and time again the WTO has intervened to prevent governments
from using boycotts or tariffs against companies that they find
to be acting in ethically or environmentally unacceptable ways.
Noreena Hertz is one of the world's leading young thinkers,
whose agenda-setting new book, The Silent Takeover: Global Capitalism
and the Death of Democracy, published by Heinemann, is already
sparking intense debate on both sides of the Atlantic. This quote
comes from a remarkable special essay for The Observer in which
she argues that governments' surrender to big business is the deadliest
threat facing democracy today. For the full text of her essay, go
 Margaret Gribskov, Why State Legislators Should
Be Concerned about Recent Trade Agreements, Economic Justice Action
Group, First Unitarian Church, Portland Oregon, January 29, 2001
 Question and answers About the Free Trade Area of
the Americas (FTAA) prepared by the Alliance for Sustainable Jobs
and the Environment, Portland Oregon
 Information on NAFTA claims have been taken from:
Make Trade Clean, Green and Fair; Dont Let the FTAA Trade
Away our Health and Environment by Dan Seligman, Sierra Clubs
Responsible Trade Program