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April 18, 2004

Trade: Corporate & Labor Rights

A lot of "free trade" Democrats (and of course Republicans) throw a fit when labor activists demand that labor rights be included in trade deals. They act as if the pristine text will be compromised by including "non-trade" issues.

I'm not always sure if such seemingly intelligent people are really that ignorant or not.

Trade deals stopped being mostly about simple tariffs and custom duties decades ago. Now they are about core legislative issues, from intellectual property law to takings against corporations.

Check out this article describing the international judicial review under the NAFTA agreement of US court decisions that corporations don't like:

Any Canadian or Mexican business that contends it has been treated unjustly by the American judicial system can file a similar claim. American businesses with similar complaints about Canadian or Mexican court judgments can do the same. Under the Nafta agreement the government whose court system is challenged is responsible for awards by the tribunals.

Here is the danger in NAFTA. The US Constitution protects against government directly taking property without compensation, but this provision does not apply generally to regulation that leaves property in the hands of the owner (except in a few cases dealing with land regulation). But NAFTA's "takings clause" is written far more broadly. See this article:

Under Chapter 11 the signatory nations are prevented from "directly or indirectly nationaliz[ing] an investment" or taking measures "tantamount to nationalization or expropriation" (emphasis added), and therein lay the distinction. By expanding government responsibility for compensation beyond direct takings, the architects of Chapter 11 have enabled foreign corporations doing business in Mexico, Canada, or the United States to seek reimbursement for any government law, rule, or regulation that impinges upon the company's profits.

Rightwing legal advocates have been pushing for years to make any regulatory diminishment of corporate profits a "takings" under US law. But having largely failed so far, provisions in international law increasingly embody that principle.

In principle, in a global world, there probably has to be multi-national regulation of government-corporate dealings to avoid conflicts, just as there has to be national regulation to avoid conflicts between the states in the US. But if corporations are going to have rights under international law, labor rights have got to have even stronger standing.

And the "free traders" have to stop pissing and moaning every time labor rights are mentioned.

Posted by Nathan at April 18, 2004 08:52 AM