Dangerous Side Agreements
Llewellyn H. Rockwell, Jr.
Clinton administration, which can't always get what it wants from
Congress, is now trying to smuggle its agenda into law as "free
trade." We can know that because of the environmental and labor
supplemental agreements to the North American Free Trade Agreement.
by U.S. Trade Representative Mickey Kantor, the side agreements
are designed to please regulators, union bosses, and environmentalists.
In doing so they prevent future legislators and presidents from
enacting free-market reforms.
the first few sentences of the environmental agreement, for example,
we are told that "sustainable development" will be our policy. As
those who follow eco-speak know, this is code for shutting down
why the agreement establishes a supranational "Commission for Environmental
Cooperation," including a "Central Secretariat," to enforce its
rules and regulations over the heads of Congress and state legislatures.
To do so, the Commission will have its own budget, court, propaganda
office, and bureaucratic army.
mission: zealous enforcement of all environmental regulations, including
those related to "pollution prevention techniques and strategies,"
"environmental scientific research and technology development,"
"conservation and protection for wild flora and fauna and their
habitats, and specially protected natural areas," "protection of
endangered and threatened species," and even "eco-labeling."
Commission can even veto American economic projects if they have
"significant adverse transboundary effects," i.e., bother foreign
agreement also obligates the U.S. to "report on the state of the
environment," "further environmental scientific research and technological
development" and "assess, as appropriate, environmental impacts."
mandates that the U.S. "effectively enforce its environmental law"
through "on-site inspections," "environmental audits," "licenses,
permits or authorizations," "search, seizure or detention" of alleged
violators, with punishments including "fines, imprisonment, injunctions,
the closure of facilities, and the cost of containing or cleaning
if we don't, for example, jail enough businessmen, millions in penalties
will be imposed on American taxpayers.
Congress passes Nafta, all this will go into effect on January 1,
1994. After that, free-market groups can toss out (oops, recycle)
their proposed reforms of statist eco-laws, as can Republican legislators.
And farmers, hunters, and developers can forget about changing the
endangered species act, which covers a host of bugs and weeds. The
environmentalists will have a permanent green rope around the neck
of the American economy.
now land-rights groups can appeal to legislators to change the law.
After Nafta, they won't have a prayer, unless they have a friend
on the Commission for Environmental Cooperation. Now we can see
why our northern neighbor refused to be fully bound by this side
agreement. But why should the U.S. sign something that is too much
for eco-socialist Canada?
Clinton administration also tacked a Labour Accord onto Nafta. According
to the text, its objective is "to promote compliance with and effective
enforcement" of "labour law."
includes collective bargaining, strikes, minimum wages and overtime
pay, anti-discrimination law, and even "equal pay for men and women."
The left has been pushing "comparable worth" for a decade. What
better way to enact this egalitarian nonsense than to bypass state
and federal legislatures and make it continent-wide?
oversee all of this, the Labour Accord establishes a "Labour Commission"
with a "Ministerial Council," an "International Coordinating Secretariat,"
and a "National Administrative Office." And like the environmental
agreement, it sets in concrete some of the worst aspects of the
U.S. regulatory state.
government is ordered to "promote compliance and provide for effective
enforcement" of our "domestic tabour law" through "on-site inspections,"
"mandatory reporting and record keeping," and "mediation, conciliation
or arbitration." And unions are granted advantage over management
in disputes over "health and safety," "employment standards," and
"industrial relations and migrant workers."
accord transfers responsibility for labor policy from Americans
to the Ministerial Council of Nafta, which is charged with unifying
standards on "occupational health and safety," "child tabour," "human
resource development," "work benefits," "social programs for workers
and their families," "labour-management relations and collective
bargaining procedures." It will also promote "legislation relating
to the formation and operations of unions, collective bargaining
and the resolution of labour disputes."
calls these "basic labor rights," but somehow Jefferson forgot to
mention them. Such "rights" are currently driving up the costs of
labor and therefore increasing unemployment. Through "child labor"
laws, for example, the Department of Labor takes authority away
from parents, prevents America's youth from gaining work experience,
and maintains tyrannical control over even the smallest details
of work schedules. The minimum wage keeps marginal workers permanently
unemployed. Health and safety rules freeze the production side of
the economy by erecting impenetrable barriers to entry. All these
should be repealed, not entrenched and exported.
there were any doubts, Kantor explained to the Wall Street Journal
(8-17-93) that "the supplemental agreements will help ensure that
the enforcement of domestic environmental laws and workplace standards
and requirements will be strengthened" and "that no nation will
lower labor or environmental standards, only raise them."
the side agreements are only elaborations on the crucial section
906 of the agreement's main text. The "Parties," it says, must "make
compatible their respective standards-related measures" but "without
reducing the level" of regulation. Countries "shall ... work jointly
to enhance the level of safety and of protection of human, animal
and plant life and health, the environment and consumers."
leaving nothing outside the Nafta commission's purview, this one
section gives the whole game away. Vague international secretariats
are to be empowered to increase the level of coercive control on
the entire economy, including people, pigs, and pimento. What the
anti-Roosevelt Old Right called "economic regimentation" is being
sold as "upward harmonization."
trade has a very different message. It says that if American consumers
want to buy something from abroad, they should be allowed to. And
American businessmen should be allowed to sell their wares abroad.
Tariffs and import quotas? Tear them all down. And tear down the
litany of foreign aid, guaranteed loans, and political manipulation
that harms consumers at home and abroad. Nafta, on the other hand,
should go the way of Clinton's "stimulus" package, and on the same
Bush speech writer Tony Snow wrongly calls the free trade argument
against Nafta the "Adam Smith Objection." In section 430 of The
Wealth of Nations, Smith made a tragic concession to the
mercantilism that animates Nafta's most dangerous provisions. When
"some tax is imposed at home," Smith wrote, it "seems reasonable
that an equal tax should be imposed" on imports of the same good
than a tax on imports, a consistent free trader would have recommended
repealing domestic taxes that cause the problem in the first place.
It's safe to say, however, that when Smith recommended tax/tariff
parity, he never imagined governments, especially not the new American
one, would ever seize 40% of the national income.
make protectionist arguments against Nafta, but they need not be
our concern. They distract from the essential point that Nafta is
not free trade but trade managed so as to solidify government and
special-interest control over the economy. The public's suspicion
that this is another D.C. trick is exactly right, even if the public's
objections are not as developed as those offered by a trained economist.
widespread hatred of Nafta would not have surprised Ludwig von Mises.
When law is impartially applied, such as contract law that allows
free trade with anybody, anywhere, people understand the rationale.
But when governments conspire to create a trade bloc, as Mises wrote
in The Free and Prosperous Commonwealth, the public is invariably
and rightly suspicious of preferential treatment.
would F.A. Hayek have been surprised that Nafta is being sold as
free trade. As he wrote, under statism, even language itself becomes
corrupted and politicized. These days, it takes the Devil's dictionary
to understand Washington-speak. There's only one thing we can count
on: the intention and effect of laws are generally the exact opposite
of their advance billing. And there's no better example than Nafta.