NOTICE: In accordance with Title 17 U.S.C. Section 107, this material
is distributed without profit to those who have expressed a prior
interest in receiving the included information for research and
educational purposes.
June, 1999
Guest Editorial: Sustainability, Santa Monica and the WTO
by Michael Feinstein, City Councilmember, Santa Monica (CA)
Santa Monica Sun, Santa Monica, June 25th-July 2nd
In the flurry of global institution building following World War
II, public attention focused on the creation of the United Nations,
which was to be inclusive of all countries. Three other multilateral
institutions were created at the same time, with far less fanfare
and transparency - the International Bank for Reconstructuring
and Development (commonly know as The World Bank), the International
Monetary Fund (IMF) and the General Agreement on Tarriffs and
Trade (GATT).
These three agencies became known as the Bretton Woods institutions,
in recognition of the meeting of represenatives from 44 nations
that gathered in Bretton Woods, New Hampshire July 1-22, 1944,
to reach agreement on the institutional purpose of what would
become the post-World War II global economy.
The World Trade Organization (WTO) came into being in 1995, as
a successor organization to the GATT. The WTO will be holding
a Ministerial Summit in Seattle from Nov. 29 through Dec. 3, 1999
called ‘the Millenium Round’ of negotiations. Trade Ministers
from 100-plus nations will be in attendance.
In preparation for Seattle, the Office of the United States Trade
Representative (USTR) has convened regional hearings across the
nation. About 40 speakers appeared at the Los Angeles hearings
June 21st and 22nd, at the Mark Taper auditorium at the Los Angeles
Main Library.
I was one of the speakers. I spoke from the perspective of a Santa
Monica community that seeks sustainability on many levels, and
wants to preserve its ability to pursue innovative and forward-reaching
environmental and social policies, without being restrained by
international trade agreements that see such policies as ‘non-tariff
trade barriers’.
Ironically, two days after the hearings, the state of California
was sued for $1 billion - for ‘future loses’ - for its new mandated
phase-out of MTBE in California by 2000. It was sued by Methanex,
a Canadian corporation that sells MTBE, under under the North
American Free Trade Agreement, a WTO-like agreement between Canada,
Mexico and the United States, that gives individual corporations
the right to challenge a foreign government’s domestic environmental,
labor, social and financial policies, under the argument that
those policies prevent ‘free trade’.
It was the contamination of Santa Monica own water wells by MTBE,
that set off a state and national debate leading to California
banning MTBE by 2002. Now this right to public health and safety
could be lost through a decision of the WTO’s international trade
tribunal, which meets behind closed doors and releases no minutes.
In preparation for my hearing before the USTR, I submitted to
them in May, the following document:
SUSTAINABILITY, SANTA MONICA AND THE WORLD TRADE ORGANIZATION
INTRODUCTION/BACKGROUND
In 1993, Santa Monica began a successful Sustainable City Program,
based on the concept that ‘sustainability’ can and should guide
all levels of community planning. Today, Santa Monica is recognized
nationally and internationally for its accomplishments in this
field.
For example:
• Under the state’s electricity deregulation, Santa Monica became
the first city in California to switch to 100% renewable Green
energy for all city facilities. Santa Monica also saves almost
$250,000 a year through energy efficiency retrofits to city facilities.
Santa Monica’s city energy plan requires much higher levels of
energy efficiency in development than required by California law.
By 2000, 75% of the city’s transportation fleet will be fueled
either by natural gas or electricity. There are several solar
demonstration projects in the city. State-of-the-art sustainable
development guidelines are also being developed to cover building
design and construction.
• As a member of the US EPA-supported ICLEI (International Council
for Local Environmental Initiatives), Santa Monica is one of a
small number of cities in the world attempting to quantify all
of their greenhouse gas emissions, and to enact aggressive greenhouse
gas emission reduction plans.
• Santa Monica reflects its social/environmental values in its
investment policies. The city has a formal policy not to invest
in nuclear or tobacco-related industries. Santa Monica was one
of the first US cities to have a selective purchasing policy to
promote human rights, against companies doing business with Burma.
Santa Monica also promotes local business, with a 1% discount
bidding preference for local firms seeking to contract with the
city.
In 1998 and 1999, Santa Monica has requested of two different
state treasurers to have the state of California provide a ‘socially-screened’
investment alternative, within the Local Agency Investment Fund
(LAIF). LAIF is where Santa Monica and many other cities currently
invest in a Pooled Money Investment Account. Santa Monica has
also contacted private investment firms to learn about what other
options may exist for socially-responsible investing of city money.
• Santa Monica believes in fair wages and the rights of labor.
The City Council will be soon considering enacting a living wage
ordinance for Santa Monica, such that the city will only do business
with companies that pay living wages to their employees.
There is also the possibility the Council will consider an additional
living wage ordinance that also applies to other portions of the
city’s economy, particularly the visitor/tourist industry.
• Santa Monica reflects its social/environmental values in its
purchasing policy. The US Environmental Protection Agency recognizes
Santa Monica’s Environmental Purchasing program, such that it
features it as a ‘case study’ in an official US EPA 27-page publication
devoted just to Santa Monica’s policy.
CONCERNS
It should therefore be of great concern, that the logic of the
WTO appears to be antithetical to Santa Monica’s Sustainable City
Program. The WTO appears to have a very strong bias that
• many environmental, health, labor and safety standards should
be
declared ‘non-tariff trade barriers’
• countries do not have the right to protect those standards
• standards should be ‘harmonized’ downward, and
• this whole process should be managed behind close doors, with
primarily large financial interests at the table, but without
transparency to the public.
As a City Councilmember from Santa Monica who is trying to promote
a good quality of life for our community, I strongly believe that
international trade agreements should provide a floor, and not
a ceiling, in terms of environment, health, labor and safety standards.
International institutions like the WTO should not be based on
exercising downward harmonization pressure. Rather, they should
ensure that local, state and national governments have the right
to set and defend higher standards than the international norm.
At the outset of the WTO’s millennium round, its now time to stop
the process and reorient it along lines of sustainability.
Compare the ‘capital-dominant’ WTO world view to the cooperative,
ecologically-oriented ‘guiding principles’ of Santa Monica’s Sustainable
City Program:
• “Environmental Quality and Economic Health are Mutually Dependent”
“A healthy environment is integral to the long-term economic interests
of the City. In achieving a healthy environment, we must ensure
that inequitable burdens are not placed on any one geographic
or socioeconomic sector of the population.”
• “All Decisions Have Environmental Implications”
“The City will ensure that each of its policy decisions and programs
are interconnected through the common bond of sustainability as
expressed in these guiding principles. The policy and decision-making
processes of the City will reflect our environmental objectives.”
• “Santa Monica Recognizes Its Linkage with the Regional, National,
and
Global Community”
“Local environmental problems and ameliorative actions cannot
be separated from their broader context. This relationship between
local issues and regional, national and global issues will be
recognized and acted upon in the City's programs and policies.
The City's environmental programs and policies should therefore
be developed as models which can be emulated by other communities.”
Based upon these principles, it is clear that Santa Monica’s concept
of sustainability tries to embody the understanding that the economy
of our planet has to be based solidly upon ecology and social
justice. The Clinton Administration has made politically-correct
protestations in favor of these values - when needed for political
purposes. But there is little evidence in the actual workings
of international trade agreements - from the ‘side agreements’
of NAFTA, to the WTO’s Committee on Trade and the Environment
(CTE), that the environment is seen as having any rightful relationship
to economics within the spheres of international finance and trade.
This is unfortunate, because on a finite planet with more than
6 billion people using up our resources in a fast, reckless, polluting
and destabilizing way, it would seem that only an ecological economics
would make sense under these conditions.
Unfortunately, the tribunals of the WTO can threaten a number
of Santa Monica’s sustainability policies, including selective
investment policies based on social/environmental criteria; laws
giving preference to local business; environmental laws, land
use/zoning regulations; and prevailing and living wage laws.
Not only would this hurt Santa Monica, but it would scare off
Santa Monica as a very needed model to other cities that ‘sustainability
can work’.
Adding insult to injury, if the federal government won’t support
defense of a municipality in international dispute resolution,
then that municipality won’t have the right to defend itself against
a business seeking to undermine a municipality’s high standards.
THE FUTURE OF THE WTO
Unfettered trade and investment liberalization is not working
for the majority of the world. The answer is not to pursue more
of it through an expansion of the WTO mandate, but to devote resources
to developing policies to stabilize wild capital flows, raise
living standards around the world and preserve existing and promote
new citizen health, safety and environmental safeguards through
accountable, democratic governance.
There should be a moratorium on WTO dispute resolution challenges
to domestic health, environmental, consumer protection, food safety,
development and human rights policies and laws whether taken under
the GATT, GATS, TRIPs or other Uruguay Round agreements.
A comprehensive, objective review -- with provisions made for
public input on the scope and substance of the research -- should
be taken of the WTO's actual performance since its establishment.
The real life outcomes of the WTO must be measured against its
promised benefits as regards trade enforced environmental measures,
food and consumer safety measures standards, trade flows and trade
related economic indicators, etc.
During this moratorium there should be a comprehensive and in-depth
review and assessment of the existing agreements. Effective steps
should then be taken to change the agreements. Such a review should
address the WTO's impact on marginalized communities, development,
democracy, environment, health, human rights, labor rights and
the rights of women and children. The review must be conducted
with civil society's full participation.
The failure of the Organization for Economic Cooperation and Development's
Multilateral Agreement on Investment (MAI) demonstrates broad
public opposition to the deregulation of the global economy, the
increasing dominance of transnational corporations and escalating
resource use and environmental degradation.
A review of the system will provide an opportunity for society
to change course and develop an alternative, humane and sustainable
international system of trade and investment relations.
for more information, go to Public Citizen's Trade WatchWeb Page