03/30/2006 Global Trade Negotiations Threaten State Powers

Thursday, March 30, 2006


Global Trade Negotiations Threaten State Powers

Every state and local official should be paying more attention to the global trade talks at the World Trade Organization, since local power to regulate services such as health care, mass transit and a range of other public services are on the chopping block.

New proposals in a part of global trade law known as the General Agreement on Trade in Services could give global corporations the right under international law to challenge a host of state and local regulations, as Public Citizen details in this background piece:

If hotel services are bound under GATS, a state or community that halts beach-front development for environmental purposes could be challenged by a foreign hotel or construction firm even though the policy applies to domestic firms also.

[S]ome governments' requirements that elder care or childcare services be non-profit entities are forbidden. For example, in the U.S., the state of Rhode Island prohibits for-profit hospital operators. Under the GATS, a government's maintenance of any of these policies in a service sector covered by GATS would be subject to a WTO challenge.

Under GATS, government spending could not favor locally-based businesses over multi-national corporations and even regulations that indirectly benefit local firms over foreign companies could be struck down under international law. For example, a local recycling law could be struck down if it would be harder for foreign firms to comply than for domestic firms. And under proposed GATS rules, privatization of public services would become essentially a one-way decision, since governments would be barred from subsidizing public services where private firms already operate -- potentially chilling a whole range of health care and public transit initiatives.

To help local officials and advocates understand the GATS, Public Citizen has established the GATS Directory, where you can type in a service sector and see proposals under discussion. For example, if you choose government Procurement, you can further explore a list of areas, including Passenger Transport: Interurban Regular Transport, which explains:

[M]unicipally owned public transit systems may have to be opened up to competition from private foreign service providers to meet market access obligations.

[P]ublic school bus services could be seen as being in competition with private providers on a regional basis.. By committing school bus transportation, the United State s may be undermining the ability of local governments to supply this service rather than contracting it out to private, potentially foreign operators.

There's a whole lot more and the effect on local government powers could be revolutionary.And you won't be surprised to find out that Wal-Mart is trying to manipulate the global trade talks to undermine local regulation of its big box stores. Under a GATS proposal supported by the company, local and state officials would not be able to limit the size and height of buildings, locations or operating hours for retail stores.

Essentially, global trade talks have become a new venue for corporate lobbying, where state and local governments could wake up the next day to discover that home rule and state government powers have been sacrificed in the name of "free trade." Make no mistake, global trade talks are no longer about tariffs or traditional obstacles to trade; they are a new parliament of unelected federal officials beholden to global multinationals and an extreme privatization ideology.

More Resources


Fighting Predatory Lending

Wisconsin Governor Jim Doyle is hinting interest in signing legislation to deregulate the rent-to-own industry. The bill passed Wisconsin's conservative legislature and is now awaiting the signature of Doyle, who as Attorney General opposed similar bills.

Luckily, not all Wisconsin legislators are letting it move forward without a fight. Bipartisan advocates are pushing forward to maintain checks on this predatory industry:

Those opposing the bill include two unlikely allies Democratic Attorney General Peg Lautenschlager and conservative Republican Sen. Glenn Grothman of West Bend, who had scheduled a press conference together for today prior to a scheduling conflict.

"I think the rent-to-own industry is the most predatory type of retail outlet in the state - worse than check-cashing and auto-title loans businesses. They enter into contracts with people who expect to wind up owning the merchandise, but the retailer itself knows that seldom are people able to make all the payments," Grothman said today.

As with most predatory industries, the rent-to-own community protects itself in Wisconsin and other states with large campaign contributions.

In Oregon, advocates ranging from religious communities to unions to foodbanks are coming together this fall to crack down on pay day loan scams that target low-income workers and military families. As they've found, these issues are extremely persuasive and popular, but the best chance to advance them is often at the ballot, where the industry can't buy off the decision-makers.

More Resources


Rethinking the Ways We Vote

The 2000 election sparked an interest in electoral reform. Paired with a rising tendency among voters toward self-declared independence from the two major parties and a new wave of reforms have started growing in popularity across the country. In statehouses and in voting booths, reforms are moving forward to give Americans more real options at the polls.

Instant Runoff Voting

In use in San Francisco; Burlington, VT; and Ferndale, MI, Instant Runoff Voting (IRV) is among the fastest-spreading voting reforms in the nation. The concept is simple. Rather than selecting a single candidate, voters rank their choices. When the ballots are tallied, election officials first count only the top choice of each voter. Candidates who received too few voters to be considered honest contenders get eliminated from the counting and the "runoff" begins.

Ballots whose top choice has been eliminated are now counted for voters' second choice. Candidates continue to be eliminated until a winner is elected. Under this system, voters are free to pick a third party candidate who most accurately fits their belief and also have a fallback major party candidate. Under this system, as proponents proudly point out, a winning candidate has to win a majority.

Instant Runoff got its name because it approximates two-round "runoff" elections experienced around the country, but it does it at a lower cost and with higher turnout by combining all of the elections into one.

Burlington only recently made the move to IRV, but already the locals are crowing about its success. And Vermont may take Instant Runoff statewide soon. Such a move would go a long ways in a state whose Congressional delegation has two Independents and whose state politics includes a strong third party -- the Progressives.

Proponents of IRV go so far as to claim that strong IRV elections make candidates more likely to be positive, as they'll want to be ranked high by their opponent's supporters. Opponents, though, like to argue that IRV only makes third parties into stronger voices for progressive ideas while still making it unlikely to elect third party leaders. Additionally, truly competitive three and four way elections can bring about strange impacts under the IRV system.

Fusion Voting

In use in New York for years, and with an historical presence in all fifty states across the country, fusion voting, also known as cross-endorsement, is making a comeback. Fusion allows candidates to seek the endorsement of multiple parties, allowing a single individual to run on the ballot with support from Democrats and Republicans and the Working Families Party and Progressives...or whatever support they can build into a coalition.

When voters choose a candidate, they also have the freedom to choose a party. So, for example, in New York, voters often have the chance to pick a winning candidate while supporting the Working Families Party, a strong third party that operates exclusively through fusion. In many cases, support on the Working Families Party line is significant enough to make the difference between victory and defeat, giving candidates good reason to reach out to the Working Families Party and address their agenda. Their hard work has led Republicans to lead the fight on issues like fair share health care.

Fusion Voting is headed for the ballot this fall in Massachusetts and organizers in Oregon are giving it a shot at both the legislature and on the ballot. Fusion voting is already legal in seven states: Arkansas, Connecticut, Delaware, Idaho, Mississippi, New York, South Carolina, South Dakota, Utah, and Vermont. Only New York and Connecticut actively use the process.

Proponents of fusion voting point to it as the greatest success story of any third party in America. Critics say that it prevents third parties from growing and leaves them dependent on the two larger parties.

Adjusting Voters to Reform

One of the biggest concerns when states consider moves to new options like fusion voting or instant runoff is confusion among voters. Especially with changes in voting technology, ensuring that voters understand new voting methods can be a challenge. At least one state considering fusion voting is unlikely to run into much confusion. Recently, we highlighted Oregon's universal vote-by-mail system. Oregon consistently has high voter participation, even on ballot issues that have a tendency to clog the ballot, with 30 issues or more in any given election. Vote-by-mail gives voters a chance to deal with ballot changes on their own time, outside the pressure of the voting booth. As such, it might be a good first step for states pondering reforms to open up the democratic process.

More Resources

More Resources

Global Trade Negotiations Threaten State Powers

Public Citizen: Stop the GATS Attack
National Conference of State Legislatures: Letter to US WTO Negotiators
MediaTradeMonitor: GATS articles
AFL-CIO: Executive Council Statement on GATS

Fighting Predatory Lending FTC Study Finds Lack of Protection for Rent-to-Own Customers
Federal Trade Commission "
Payday Loans = Costly Cash"
Our Oregon Payday Loan Fact Sheet
The State PIRGs Predatory Lending: Rent-to-Own
Washington Monthly: "Renter beware -- fraud in rent-to-own business"

Rethinking the Ways We Vote

Fusion Voting
Maine Citizen Leadership Fund Fusion Voting
New Majority Education Fund Fusion Voting
Working Families Party Fusion Voting

Instant Runoff Voting
FairVote Instant Runoff Voting
FairVote IRV in Your State

Progressive States

In Today's Dispatch:

Valuing Families

Fighting Predatory Lending


Rethinking the Ways We Vote



Sign Up

Eye on the Right

In the ongoing War on Reality, Rep. Debra Maggart, a rightwing Tennessee legislator, claims to "have seen evidence that homosexual couples prey on young males and have, in some instances, adopted them in order to have unfettered access to subject them to a life of molestation and sexual abuse." Real child abuse exists in places like Mississippi's foster care system, overseen by Haley Barbour, a darling of the radical right. So is Rep. Maggart raising any red flags over Mississippi? It sure doesn't sound like it.


Progressive States' policy department is looking for interns for Summer 2006. We're looking for students interested in public service with experience in policy advocacy or community organizing. For details, visit the Jobs & Internships Page.


Please shoot me an email at if you have feedbacks, tips, suggestions, criticisms, or nominations for any of our sidebar features.

Matt Singer
Editor, Stateside Dispatch