Joined: 18 Aug 2004
|Posted: Fri May 15, 2009 9:32 am Post subject:
|The Michigan Messenger
Secret trade pact between U.S., Europe could void local laws on chemical, gas storage
Bush administration had initially denied Michigan Messenger's Freedom of Information Act request on the negotiations, saying that it would violate national security
By Ed Brayton
|The Office of the U.S. Trade Representative under the Bush administration struck a secret deal with the European Union that could open up a door for foreign ownership of liquefied natural gas terminals and other dangerous chemical and energy facilities. The agreement could also create conditions in which federal, state and local regulations affecting those facilities could be challenged as barriers to international trade.
Details of the negotiations came to light after a Freedom of Information Act request by Michigan Messenger was denied by the Bush administration on grounds that the deal was “classified in the interest of national security pursuant to Executive Order 12958.” Michigan Messenger’s inquiry has lasted more than a year and involved a federal lawsuit seeking disclosure of the agreement. As a federal judge was considering the merits of the case, USTR declassified the document the week before last November’s elections. Trade law experts from Global Trade Watch, a division of the government watchdog group Public Citizen, assisted Michigan Messenger in the analysis of the agreement and in the federal lawsuit.
“It was important to get this document because it shows that the Bush administration was using the [World Trade Organization] process to sell out U.S. public safety and give foreign firms new rights and privileges here even as state authorities were trying to regulate these dangerous LNG facilities,” said Lori Wallach, a trade attorney and director of Global Trade Watch. “Now the public and state officials have the information to stop this proposal from becoming a new binding U.S. WTO commitment.” While the United States trade representative, who serves as a member of the president’s Cabinet, has the authority to negotiate such settlements, Congress still has a role to play. Wallach notes: “Congress does not have to [take action] per USTR, but Congress should. The bottom line is that someone has to demand a vote in Congress.” Wallach said she has spoken to many congressional Democrats who have not yet demanded that because they want to give the Obama administration an opportunity to review the agreement and take appropriate action. Former Dallas Mayor Ron Kirk was sworn in as Obama’s trade representative last month. Through the course of Michigan Messenger’s investigation, the office has refused comment.
The controversial agreement has its origins in an international dispute over Internet gambling. (emphasis added)
Over the last few years, the U.S. government’s attempts to restrict access to online gambling have prompted a series of disputes under the World Trade Organization treaty. Because the government has attempted to stop many forms of online gambling by offshore companies while allowing other forms of domestic online gambling, like state lotteries and horse racing, several nations, led by Antigua, have filed complaints that such laws violate U.S. commitments under the General Agreement on Trade in Services treaty. Those disputes led to the White House announcement in May 2007 that the United States would withdraw gambling services from its GATS commitments. Such a withdrawal allows other nations that lose business as a result in one sector to make other trade demands on the offending nation as compensation.
In December 2007, USTR announced that it had reached a settlement with the European Union in one such dispute, but it would not reveal the substance of that agreement. That prompted Michigan Messenger’s Freedom of Information Act request and the subsequent federal lawsuit to force the U.S. government to disclose the details. According to an analysis conducted by Global Trade Watch, the agreement opens up four markets to foreign companies that were previously closed under the U.S. government’s GATS “schedule of commitments.” During the lawsuit, Wallach filed a declaration with the court indicating that two of the market sectors being opened by the settlement — warehousing and storage and research and development — could pose serious problems for the nation if the settlement becomes part of the GATS treaty. Although agreed upon by the United States and the European Union, it cannot be formally adopted as part of the GATS agreement until other nations that asked for compensation reach similar agreements. It is the warehousing and storage sector that includes mention of the storage of oil, gas and chemicals. As Wallach said in her court declaration: “Not only are hazardous ‘tank farms’ for gas, oil, and chemicals covered by this commitment, but controversial liquid natural gas (LNG) facilities are also covered.” LNG facilities are controversial because of their high explosive power. A Lloyd’s of London executive in 2004 noted that an explosion in an LNG tanker “would have the force of a small nuclear explosion.”
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