Opponents find new ammunition just in time for House trade debate

WASHINGTON—As the House of Representatives prepares to take up President Barack Obama's trade plans in June, opponents have found new ammunition from an unlikely source: the World Trade Organization.

The global trade body in Geneva set off a scramble on Capitol Hill last week when it sided with Canada and Mexico in a dispute over the U.S. country-of-origin meat-labeling law, saying it put foreign competitors at a disadvantage.

Congress passed the law in 2002, responding to demands by consumers who wanted to know where their meat came from. But hoping to stave off sanctions, the House Agriculture Committee voted quickly last week to scrap the labels for beef, chicken and pork.

With Obama now pushing for a new 12-nation Pacific Rim trade pact, critics fear that other U.S. laws could be jeopardized by a new international tribunal that would be created to resolve disputes.

“We should expect similar results,” said Rep. Rosa DeLauro, D-Conn., one of Obama's leading trade critics.

Rep. Mike Thompson, D-Calif., said he worries that his state's air and water laws could be at risk if they're challenged by Asian businesses as trade barriers.

And Sen. Elizabeth Warren, D-Mass., said that even the federal minimum wage could face a legal challenge from foreign corporations.

Trade backers say that's all very far-fetched, but opponents are ready to take advantage of the WTO ruling and hope it will steer more votes their way.

Lori Wallach, director of Public Citizen's Global Trade Watch, said the WTO ruling “could not have come at a more inconvenient time” for Obama.

And Arthur Stamoulis, executive director of the Citizens Trade Campaign, a coalition of farm, labor, environmental, consumer and human rights groups, said the ruling shows how global trade rules “are being rigged against domestic producers and consumers alike.”

While the fallout has sparked plenty of anger, Obama and his trade allies say opponents are using scare tactics and that there's no reason to worry that U.S. laws would get overturned under the new trade pact, known as the Trans-Pacific Partnership.

They note that previous U.S. trade agreements have included rules for settling disputes—they're known as the “investor-state dispute settlement” process, commonly called ISDS.

The debate is part of a larger argument over whether to give the bill fast-track status, which would set the rules of debate for the Trans-Pacific Partnership after it's submitted to Congress for approval. It would prohibit members of Congress from filibustering or amending the trade pact, making it easier for Obama to get it passed.

Sen. Orrin Hatch, R-Utah, chairman of the Senate Finance Committee, said the ISDS process allows companies to challenge unfair or discriminatory treatment in binding arbitration instead of going to ordinary courts.

He said “it would be a shock” if the trade pact did not include such a process, because the U.S. has routinely demanded the language in trade deals.

“It is only in the overly hyperbolic and borderline fictional world of political debate that ISDS provisions impact the lives of everyday people,” Hatch said.