Ralph Nader, “Free Trade and the Decline of Democracy” (1993)

Citizens beware. An unprecedented corporate power grab is underway in global negotiations over International trade.

Operating under the deceptive banner of “free” trade, multinational corporations are working hard to expand their control over the international economy and to undo vital health, safety, and environmental protections won by citizen movements across the globe in recent decades.

The megacorporarions are nor expecting these victories to be gained in town halls, state offices, the U.S. Capitol, or even at the United Nations. They are looking to circumvent the democratic process altogether, in a bold and brazen drive to achieve an autocratic far-reaching agenda through two trade agreements, the U.S-Mexico-Canada free trade deal (formally known as NAFTA, the North American Free Trade Agreement) and an expansion of the General Agreement on Tariffs and Trade (GATT), called the Uruguay Round.

The Fortune 200’s GATT and NAFTA agenda would make the air you breathe dirtier and the water you drink more polluted. It would cost jobs, depress wage levels, and make workplaces less safe. It would destroy family farms and undermine consumer protections such as those ensuring that the food you eat is not compromised by unsanitary conditions or higher levels of pesticides and preservatives.

And that’s only for the industrialized countries. The large global companies have an even more ambitious set of goals for the Third World. They hope to use GATT and NAFTA to capitalize on the poverty of Third World countries Land exploit their generally low environmental, safety, and wage standards. At the same time, these corporations plan to displace locally owned businesses and solidify their control over developing countries’ economies and natural resources.

U.S. corporations long ago learned how to pit states against each other in “a race to the bottom” — to profit from the lower wages, pollution standards, and taxes. Now, through their NAFTA and GATIE campaigns, multinational corporations are directing their efforts to the international arena, where desperately poor countries are willing and able to offer standards at 19th century American levels and below.

It’s an old game: when fifty years ago the textile workers of Massachusetts demanded higher wages and safer working conditions, the industry moved its factories to the Carolinas and Georgia. If California considers enacting environmental standards in order to make it safer for people to breathe, business threatens to shut down and move to another state

The trade agreements are crafted to enable corporations to play this game at the global level, to pit country against country in a race to see who can set the lowest wage levels, the lowest environmental standards, the lowest consumer safety standards….

Enactment of the free trade deals virtually ensures that any local, stare, ot even national effort in the United States to demand that corporations pay their fair share of taxes, provide a decent standard of living to their employees, or limit their pollution of the air, ware; and land will be met with the refrain, “You can’t burden us like that. If you do, we won’t be able to compete. We’ll have to close down and move to a country that offers us a more hospitable business climate. This sort of threat is extremely powerftil

— communities already devastated by plant closures and a declining manufacturing base are desperate not to lose more jobs, and they know all too weil from experience that threats of this sort are often carried out.

Want a small-scale preview of the post-GATT and NAFTA free trade world? Check out the U.S-Mexico border region, where hundreds of U.S. companies have opened up shop during the last two decades in a special free trade zone made up of factories known as maquiladoras. . . Here are some examples of conditions that prevail in the U.S-Mexico border region:

• In Brownsville, Texas, just across the border from Matamoros, a maquiladora town, babies are being born without brains in record numbers; public health officials in the area believe there is a link between anencephaly (the name of this horrendous birth defect) and exposure of pregnant women to certain toxic chemicals dumped in streams and on the ground in the maquiladoras across the border. Imagine the effect on fetal health in Matamoros itself.
• U.S. companies in Mexico dump xylene, an industrial solvent, at levels up to 50,000 times what is allowed in the United States, and some companies dump methylene chloride at levels up to 215,000 times the U.S. standards, according to test results of a U.S. Environmental Protection Agency certified laboratory….
• Working conditions inside the maquiladora plants are deplorable. The National Safe Workplace Institute reports that “most experts are in agreement that maquila workers suffer much higher levels of injuries than U.S. workers,” and notes that “an alarming number of mentally retarded infants have been born to mothers who worked in maquila plants during pregnancies.”

In many instances, large corporations are already forcing U.S. workers and communities to compete against this Dickensian[1] industrialization — but the situation will become much worse with NAFTA and Uruguay Round expansion of GATT….

Worst of all, the corporate-induced race to the bottom is a game that no country or community can win. There is always some place in the world that is a little worse off, where the living conditions are a little bit more wretched….

…Non-tariff trade barriers,” in fact, has become a code phrase to undermine all sorts of citizen-protection standards and regulations. Literally, the term means any measure that is not a tariff and that inhibits trade — for instance restrictions on trade in food containing too much pesticide residue or products that don’t meet safety standards. Corporate interests focus on a safety, health, or environmental regulation that they don’t like, develop an argument about how it violates the rules of a trade agreement, and then demand that the regulation be revoked….

…Already, a Dutch and several U.S. states’ recycling programs, the U.S. asbestos ban, the U.S. Delaney clause prohibiting carcinogenic additives to food, a Canadian reforestation program, U.S., Indonesian, and other countries’ restrictions on exports of unprocessed logs . . . , the gas guzzler tax, driftnet fishing and whaling restrictions, U.S. laws designed to protect dolphins, smoking and smokeless tobacco restrictions, and a European ban on beef tainted with growth hormones have either been attacked as non-tariff barriers under existing free trade agreements or threatened with future challenges under the Uruguay Round when it is completed….

U.S. citizen groups already have enough problems dealing in Washington with corporate lobbyists and indentured politicians without being told that decisions are going to be made in other countries, by other officials, and by other lobbies that have no accountability or disclosure requirements in the country….

To compound the autocracy, disputes about non-tariff trade barriers are decided not by elected officials or their appointees, but by secretive panels of foreign trade bureaucrats. Only national government representatives are allowed to participate in the trade agreement dispute resolution; citizen organizations are locked out.

…As the world prepares to enter the twenty- first century, GATT and NAFTA would lead the planet in exactly the wrong direction. . . . No one denies the usefulness of international trade and commerce. But societies need to focus their attention on fostering community-oriented production. Such smaller-scale operations are more flexible and adaptable to local needs and environmentally sustainable production methods, and more susceptible to democratic controls. They are less likely to threaten to migrate, and they may perceive their interests as more overlapping with general community interests.

Similarly, allocating power to lower level governmental bodies tends to increase citizen power. Concentrating power in international organizations, as the trade pacts do, tends to remove critical decisions from citizen influence — it’s a lot easier to get ahold of your city council representative than international trade bureaucrats.

[1] Many of the novels of the famous English writer Charles Dickens (1812—1879) focused on the bleakness of early factory life.