Wayward Trade Organization

By Joel D. Joseph

The World Trade Organization sounds like a good idea: an international organization established to enforce the rules of international trade. There should be an international organization that levels the playing field and makes every nation play by the same rules. All nations should have the same, or at least a minimum, environmental laws. Fair trade should not give an unfair advantage to a country that allows widespread pollution from industries. Similarly, slavery and forced labor should not be allowed. Child labor should be policed worldwide. But the WTO does not enforce any of these rules.

The WTO has gone off on tangents of its own that do little to advance free and fair trade. In late May of this year a panel of the World Trade Organization tentatively found that the US law known Country of Origin Labeling Act (COOL), violates WTO rules. COOL requires fruit, vegetables, meat and poultry sold in the US to be labeled for its country or origin.

The WTO tentative ruling infringes on the rights of US consumers to know where products are made. This right was passed into law by the US Congress and signed by the President of the United States. A WTO panel of three unelected judges is attempting to override the will of the elected representatives of the US.

Canadian and Mexico cattlemen challenged COOL before the World Trade Organization. The WTO does not have permanent judges to decide such disputes. It appointed three private individuals on a panel to decide if the US law was a barrier to free trade. These three men are: Christian Haeberli, Manzoor Ahmad and Joao Magalhaes. All three have extensive experience in international trade matters.

Christian Häberli, a Swiss citizen, works as a Senior Research Fellow at the World Trade Institute of Bern University, Bern, Switzerland. Häberli earned a Ph.D. in African Investment Law and a degree in Theology in Bern (2009). He was a trade negotiator for Switzerland. Magalhaes was a former WTO staffer and is now a private trade consultant. João Magalhães, a Portuguese citizen, worked for the Institute for Training and Technical Cooperation and is also a private trade consultant . Mr. Ahmad is Pakistan's ambassador to the WTO.

So three private citizens, three trade consultants, a Pakistani, a Swiss and a Portuguese, will decide whether a law passed by the US Congress and signed into law by the of President of the United States is legal under WTO rules. My mother would have said, "Who Appointed them God?" The answer is that the unelected head of the WTO appointed them.

The Canadian and Mexican cattlemen claim that the US Congress was not trying to inform consumers about the source of meat; it was trying to create barriers to trade. Because of illnesses transmitted by cattle, like mad-cow disease, consumers and grocery stores have a right to know where their meat comes from. How else can we remove tainted meat from the shelves? The country of origin labeling act is not a trade barrier, it is clearly a consumer protection law.

Under the US Constitution, no foreign organization can overrule US law unless it is done according to a treaty passed by two-thirds the US Senate (Article Two, Section Two, Clause Two). The US did not join the WTO by a treaty and therefore the complaint of Canadian and Mexican cattlemen should be thrown into the trash bin where it belongs.

The WTO panel will probably rule against the US. Small nations like to do that. The US will appeal and will probably lose again. Then Canada and Mexico will be allowed under WTO rules to punish the US. Let them try! We run trade deficits with both of our neighbors. They have much more to lose than we do. We can increase duties in response to Canada and Mexico's "punishing" duties. Because of absurd ruling like this, the WTO and NAFTA will self-destruct and the US will be better off without them.

Joel Joseph is a Constitutional lawyer and chairman of the Made in the USA Foundation. He blogs at madeusafdn.blogspot.com.

From The Progressive Populist, August 15, 2011