Usually it is large nations demanding that poorer, smaller ones relinquish the protections and subsidies they provide for their local producers. But occasionally things take a different turn. In late 2006 Canada launched a dispute at the World Trade Organization over the use of trade-distorting agricultural subsidies by the United States, specifically the enormous sums dished out by the US government to agribusiness, enabling US farm corporations to sell commodities abroad at prices lower than what the farmers in other countries can offer, thereby creating an unfair advantage in agrarian exports. The case also challenged the entire multibillion-dollar structure of US agricultural subsidies. A report by Oxfam International revealed that at least thirty-eight Third World countries were suffering severely as a result of trade-distorting subsidies by both the United States and the European Union.18
The US government attempted to insert a special clause into trade negotiations that would place its illegal use of farm subsidies above challenge by WTO member countries and make the subsidies immune from adjudication by the WTO. In 2009 the WTO ruled that “massive government subsidies for large-scale cotton growers in the United States are unfair and hurt farmers in poor countries.” An Oxfam study found that a complete removal of US cotton subsidies would lift the world price of cotton by 6 to 14 percent, resulting in better markets and increased income for many poor West African cotton-growing households. But US rulers continued as before, refusing to abide by the WTO ruling to scrap its subsidies.19 The empire always places itself above the strictures it imposes on others.
WTO aside, what is seldom remarked upon is that NAFTA and GATT are in violation of the US Constitution, the preamble of which makes clear that sovereign power rests with the people: “We the People of the United States . .. do ordain and establish this Constitution for the United States of America.” Article I, Section 1 of the Constitution notes that all legislative powers shall be vested in the US Congress. Article I, Section 7 gives the president (not some trade council) the power to veto a law, subject to being overridden by a two-thirds vote in Congress. And Article III gives adjudication and review powers to federal courts, not to self-appointed trade tribunals. The Ninth and Tenth Amendments to the Constitution declare that all rights and powers not explicitly delegated to the federal government are reserved to the people and the states. In a word, there is nothing in the entire Constitution that allows—and much that disallows—an international trade panel to exercise supreme review powers undermining the constitutionally mandated decisions of the legislative, executive, and judicial branches.
True, Article VII says that the Constitution, federal laws, and treaties “shall be the supreme Law of the land,” but this was not intended to include treaties that overrode the sovereign democratic power of the people and their representatives. In any case, strictly speaking, the trade agreements are not treaties. NAFTA and GATT were called “agreements” instead of treaties, a semantic ploy that enabled President Clinton to bypass the two-thirds treaty ratification vote in the Senate and avoid any treaty amendment process. The World Trade Organization was approved by a lame-duck session of Congress held after the 1994 elections. No lawmaker running in that election uttered a word to voters about putting the US government under a perpetual obligation to international trade rulings.
What is being undermined is not only a lot of good laws dealing with environment, public services, labor standards, and consumer protection but also the very right to legislate such laws. Our democratic sovereignty itself is being surrendered to a secretive plutocratic trade organization that presumes to exercise a power greater than that of the people and their courts and legislatures.
“Free trade” is designed to leave the world’s economic (and ecological) destiny to the tender mercy of bankers and transnational corporations. The globalization it promotes is a logical extension of imperialism, a victory of empire over republic, a victory of international finance capital over local productivity and nation-state democracy (such as it is).
Militant protests against free trade have taken place in over forty nations, from Britain and France to Thailand and India. In 2000–2001 alone, there were demonstrations in Seattle, Sydney, Prague, Genoa, Washington, D.C., and various other locales, causing several multilateral trade agreements to be stalled or voted down. Poorer nations were catching wise to the free trade scams and refusing to sign away what shreds of sovereignty they still had.