1. Under Threat: Workers and democracy under the new generation of trade deals By: Resource Center of the Americas & Labor Education Service, University of MN Minnesota Fair Trade Coalition

2. Evolution of global free trade rules A corporate global agenda –growth of multi-national corporations – national borders become less important –growth of service sector – 60% globally –political agenda to maximize profits emphasizing privatization and deregulation “Less government is better” –extends “less government” philosophy into trade in goods and services –addresses not just tariffs, but “non-tariff trade barriers” government rules, policies, subsidies, laws, regulations, court decisions

3. The result: millions of good jobs lost The result: millions of good jobs lost 3,000,000 manufacturing jobs lost to free trade since 1994 Over 750,000 jobs lost under NAFTA alone In recent years, Free Trade Agreements have cost this country millions of good jobs.

4. Sweatshops-R-Us Globalization Many jobs sent to poor countries Work often done under sweatshop conditions Workers often denied unions and basic human rights

5. Trade deals of the 1990s, such as NAFTA, focused mainly on trade in manufactured goods. The point was to increase manufacturing profits by lowering the living standards associated with manufacturing work So manufacturing workers bore the brunt Now the barons of global capitalism have their eyes on the living standards of service workers.

6. New Trade Deals and Democracy Negotiations are underway on: –FTAA (Free Trade Area of the Americas) –GATS (General Agreement on Trade in Services) These agreements could: –mandate privatization of government services –threaten environmental protections, safety and human rights laws. –undermine worker rights and protections

7. We’ve all heard of NAFTA …

8. NAFTA (North American Free Trade Agreement) Took effect January 1, 1994 Between U.S., Canada and Mexico Applies mostly to goods and commodities; first trade deal to include some services (trucking, legal, engineering, etc.) Focuses on “non-tariff barriers” (government rules, environmental and safety regulations, etc.)

9. NAFTA’s Devastating Effects 750,000 jobs (mostly in manufacturing) lost in the United States Mexican manufacturing wages drop 23%

10. Now … The Bush administration wants to put NAFTA on steroids. Now … The Bush administration wants to put NAFTA on steroids. NAFTA FTAA

11. FTAA (Free Trade Area of the Americas) FTAA extends NAFTA to 34 western hemisphere nations FTAA greatly expands coverage of NAFTA Negotiations aim to be done in 2004 -- voted on by Congress in 2005

12. NAFTA also contains Chapter 11 Suing Governments Allows “investors” (directors, executives, and shareholders) to sue foreign national governments for damages can sue for: “measures tantamount to nationalization or expropriation” Chapter 11 was meant to protect corporations from having assets seized or nationalized.

13. But these trade rules are now eroding our democratic process. In 1998, the WTO ruled new U.S. clean air standards were barriers to free trade – and they forced the U.S. to change them. Under NAFTA Chapter 11, a Canadian company sued the U.S. for almost $1 billion when California banned a toxic gasoline additive.

14. The Next Generation: Going after services

15. GATS (General Agreement on Trade in Services) Goal is to cover all services, all methods of delivering services, and every government measure at all levels affecting trade GATS is administered by the World Trade Organization (WTO) GATS covers 146 nations, including U.S. Negotiations aim to be done in 2004 -- voted on by Congress in 2005

16. Potential services covered by GATS: Professional (legal, nursing, computer, etc.) Communications (postal, radio and TV, video, etc.) Construction (general building, installation, assembly, etc.) Distribution (wholesale and retail trade) Educational (higher education, primary and secondary ed) Environmental (sewage, waste disposal, sanitation, etc.) Financial (health and life insurance, banking, etc.) Health and Social (hospitals and social services, etc.) Tourism and Travel (hotels, restaurants, agencies, etc.) Recreation and Cultural (theater, news agencies, libraries, museums, parks, etc.) Transport (passenger and freight, pipelines, etc.)

17. This includes public services Covers government services –exempt only if public service is not “ commercial” (i.e. charges a fee) “competitive” (i.e. there is a competing private sector provider) GATS aim: privatize public services

18. GATS targets all government measures GATS targets all government measures rules policies laws subsidies regulations court decisions

19. GATS limits what laws we can pass Will likely prohibit measures that are “more burdensome than necessary” for foreign companies or give an advantage to local companies Measures would have to be the “least trade restrictive” possible Would prohibit government from setting conditions on awarding contracts except those necessary for product quality or supplier capability

20. Sample MN Laws at Risk Prevailing wage Corporate subsidy reform reporting and wage standards Corporate feedlot restrictions Electricity rate regulations HMO non-profit requirement Cost clean-up requirements for pipeline spills Many other environmental, labor, and corporate accountability laws

21. These new trade agreements threaten our jobs and basic labor standards …

22. New Trade Deals and Construction Workers GATS and FTAA could: –undermine prevailing wage laws –undermine union wages and jobs –undermine project labor agreements

23. Prevailing wage threatened Would likely be judged “more burdensome than necessary” for foreign construction firms Prevailing wage laws could be attacked for going beyond what is necessary to ensure service quality or supplier capability

24. Project labor agreements threatened Agreements that require union labor could be prohibited Would likely be judged to go beyond what is necessary to ensure quality, or be the alternative that is least restrictive to trade

25. Temporary Foreign Workers New GATS rules will almost certainly make it easier to import temporary foreign construction workers “[GATS negotiations are now] addressing issues that were previously considered to be untouchable due to their political sensitivity (e.g. visa and immigration procedures)” -- high ranking WTO official

26. India’s Proposal Service workers (including construction workers) could work in other countries under “GATS visas” Companies would not even have to follow the country’s minimum wage laws WTO internal memo: India’s proposal is getting “serious attention” from U.S., the European Union, and others

27. GATS workers as indentured servants GATS visa workers would have few rights or protections Workers who tried to form or join a union could find themselves fired or deported As proposed:

28. New Trade Deals and Public Workers GATS and FTAA could: –Could require many public services to be opened to bid by private foreign companies –Public employees would have to compete with these foreign service corporations to try to keep their own jobs

29. So, What public services are targeted?

30. Water Services Water collection, purification and distribution Waste-water treatment Many of these services are now provided by municipal water districts and staffed with union public employees

31. This continues a corporate push to control water supplies

32. The World Bank estimates a fully- privatized global water market is worth $800 billion a year

33. Rebecca Mark, former CEO of Enron’s Water Division, said she would not rest until she had: “fully privatized the global water market.”

34. Enron worked closely with the Bush administration to define U.S. goals for GATS Surprise …

35. Waste Management Services Waste management is also targeted under GATS GATS will likely allow foreign firms to bid on municipal sanitation and incineration work – areas already under heavy pressure from privatization.

36. Air and Water Protection Services Protection of ambient air and climate GATS will likely allow foreign firms to bid on the work currently done by the U.S. Environmental Protection Agency (EPA), state Pollution Control Agencies (PCAs), perhaps even OSHA.

37. Environmental Protection Services Protection of biodiversity and landscape GATS targets for privatization services that include work done currently by the National Parks Administration, U.S. Forest Service, Bureau of Land Management, and state Departments of Natural Resources

38. Transportation Services Urban mass transit and other transportation services GATS could allow foreign firms to bid on mass transit services – buses, trains, metro mobility, etc. It may even include school bus transportation.

39. Education Services Higher education, adult education and various training services Currently negotiations are underway to cover all education beyond secondary school.

40. New Trade Deals and Postal Workers GATS and FTAA could: –mandate privatization of postal services –undermine prevailing wages under the Service Contract Statutes

41. Postal services targeted Both the European Union and the United States are specifically seeking to include postal services under GATS rules

42. So, What specific postal services are targeted?

43. Europe wants open to bid … the clearance sorting transport and delivery of “addressed written communications on any kind of physical medium.” “addressed written communications on any kind of physical medium.”

44. United States is targeting express delivery services that are subsidized by government monopolies -- like those provided by the USPS. This is only what we know so far.

45. With both the U.S. and E.U. targeting postal services … it is likely that GATS will cover many USPS services. With both the U.S. and E.U. targeting postal services … it is likely that GATS will cover many USPS services.

46. And, this means: USPS services covered by GATS will be open to bidding by private foreign companies.

47. But that’s not all … Since GATS and FTAA will also likely prohibit governments from setting conditions for awarding contracts except those necessary for product quality or supplier capability…

48. The Service Contact Act would almost certainly not meet this test. The Service Contract Act mandates prevailing wages for certain services – this goes beyond ensuring product quality or supplier capability.

49. Democracy at Risk. The new trade agreements challenge fundamental concepts of democratic government and national sovereignty. And they threaten to put many key public services under corporate – not public – control.

50. Let’s look at a hypothetical case … Assume GATS rules are already in place This is how the new trade agreements might undermine democracy in local communities…

51. A couple of years ago, U.S. Filter tried to take control of New Orleans’ water system.

52. 65% of New Orleans voters signed a petition demanding public control of their water. Citizens fought back. But … They thought they had won. They thought they had won. The Water and Sewerage Board rejects U.S. Filter’s bid. And the coalition secures a requirement that any future privatization effort must be put to a public referendum.

53. This is what democracy is supposed to look like.

54. But one day, a few months after the new GATS takes effect in 2006, the City of New Orleans receives a letter …

55. … on behalf of U.S. Filter …

56. … by its parent company Vivendi.

57. … is a French-based multi-national corporation and one of the world’s largest private water companies. Vivendi …

58. … is also one of the “water barons” criticized for providing poor service at a higher cost to consumers in their African and Latin American water privatization schemes.

59. Dear City of New Orleans: You are obliged under the provisions of GATS to consider U.S. Filter’s bid to operate the New Orleans water system. This decision cannot be put to a citizen referendum. Very truly yours, Vivendi Their letter says,

60. New Orleans seeks help. It asks for an opinion from the U.S. Trade Representative’s Office.

61. The U.S. Trade Representative replies: New Orleans must allow U.S. Filter to bid. If they refuse, the U.S. must use all means at its disposal to force compliance – or else face huge penalties.

62. US Filter submits a bid and it is the low bid – under GATS New Orleans must accept it. New Orleans complies. It doesn’t matter that New Orleans’ law requires a citizen referendum. It doesn’t matter that New Orleans citizens want to retain control over their water.

63. This was fiction. But if GATS rules are adopted as currently envisioned, this fiction could become all too real.

64. In the 1990s corporate free- traders began their assault on workers and our democracy. Now they are stepping up the attack.

65. What can be done? Build awareness –educate your membership –write opinion piece or letter to editor –write article for local newsletter Contact Congress –write Congress about specific issue –encourage your organization or local elected officials to contact Congress Make it an election issue –put question on candidate screening –talk to local elected officials about local impacts Mobilize people nationally –prepare for November Miami rallies