The WTO Trap...........

John blueoval at 1SMARTISP.NET
Mon Jan 17 17:46:39 MST 2005

The WTO Trap
By William Norman Grigg
The New American, January 10, 2005

The World Trade Organization, a Geneva-based body
composed of foreign bureaucrats, will control our
nation's economic destiny unless we get out -- now!

A delegation of U.S. cotton farmers had their "day in
court" on December 13, seeking relief from a damaging
regulatory ruling. The "court" to which they made
their appeal was a dispute resolution panel of the
World Trade Organization (WTO), a 148-nation global
body headquartered in Geneva, Switzerland. The U.S.
cotton farmers were forced to appeal to the foreign
"court" because the U.S. government illegally ceded
part of our sovereignty to the WTO, and the farmers
have been caught in the repercussion of that action.

Last September, noted the December 7 Delta Farm Press,
a three-member WTO panel ruled that a number of
federal assistance programs for the cotton industry
are "prohibited export subsidies" that created
"significant suppression of world cotton prices in
marketing years 1999-2002, causing 'serious prejudice'
to Brazil's interests." This isn't to say that the WTO
uniformly bans all such subsidies. Article 13 of the
WTO Agreement on Agriculture allows national
governments to provide agricultural subsidies, but the
global trade body claims the authority to nullify any
subsidy it deems inappropriate -- and to levy punitive
fines and taxes to enforce its rulings.

As has been its habit, the Bush administration reacted
to the September decision by expressing resigned
disapproval -- and an eager willingness to abide by
the WTO's final decision. This left U.S. cotton
farmers to seek relief from the same foreign globalist
body that had issued the injurious decision. "We have
been preparing our defense," explained John Maguire,
senior vice president of Washington operations for the
National Cotton Council. "The U.S. Government is our
attorney in this case." What this means is that, "win"
or lose, the Bush administration would validate the
WTO's authority to regulate our nation's economic

This was neither the first, nor the most recent,
instance in which the WTO has issued a strongly
anti-U.S. ruling. In March 2004, the body ruled that
congressional legislation banning Internet gambling
violates the terms of the General Agreement on Trade
in Services (GATS). Described as a measure intended to
facilitate free trade in services, GATS is not an
agreement, or even a set of agreements. Instead, it is
an open-ended process in which hordes of anonymous
foreign bureaucrats review local, state, and federal
licensing and certification standards, and other
supposed impediments to the global free trade in
services. Through the GATS process, all of our
legislative processes are thrown open to challenge by
foreign governments.

Shortly after the U.S. presidential election, the WTO
issued what would have to be considered its most
dramatic ruling against U.S. interests. As summarized
by Newsday, a November 26 ruling "approved punitive
taxes long sought by the European Union and other
countries because of a law they say unfairly protects
U.S. steel companies and other industries." The law in
question, commonly known as the "Byrd amendment,"
authorizes the imposition of tariffs to protect
various industries from "dumping" -- that is to say,
the subsidized export of goods below production costs
as a way of driving U.S.-based competitors out of the

Under the Byrd amendment, formally known as the
"Continued Dumping and Subsidy Offset Act of 2000,"
money collected through the tariffs could be paid to
U.S. companies who file anti-dumping complaints. Over
the past three years, some $700 million has been paid
out. In response to a European Union complaint in
2002, the WTO ruled that the Byrd amendment was
"illegal." This is to say that a Geneva-based global
body, composed of foreigners who are not accountable
to U.S. citizens, presumed to exercise judicial review
over a law that -- whether considered wise or foolish
-- was properly enacted by Congress and duly signed by
the president.

The November 26 WTO ruling compounds that outrage by
authorizing the imposition of "punitive taxes" against
the United States. "While quite small initially,"
noted Newsday, "the level of punitive duties will be
reviewed each year and could rise sharply. The value
of the sanctions, on everything from sweet corn to
metals and textiles, hasn't been determined, but trade
officials estimated them at more than $150 million a

The WTO ruling clears the way for "the EU, Japan and
five other governments 
 to slap tariffs on American
 unless Congress repeals the so-called Byrd
amendment," noted the Bloomberg financial press
service. Surely President George W. Bush, a man
reviled by his detractors as a "unilateralist" and
hailed by his defenders as a stout defender of
national sovereignty, rejected this brazen assault on
our national independence and prosperity.

Guess again.

Asked about the ruling during a November 26 press
conference at his Crawford, Texas, ranch, Mr. Bush
replied: "We've worked hard to comply with the WTO.
It's important that all nations comply with WTO
rulings. I'll work with Congress to get into
compliance." After promising to defer to the global
body's supposed authority, Bush attempted to strike a
resolute pose, mewling: "We expect the WTO, as well,
to treat our trading partners as they treat us. And
that's why, for example, I filed [a] complaint on the
Airbus situation. We believe that the subsidies for
Airbus are unfair for U.S. companies, such as Boeing."
But this amounted to a tacit admission on Mr. Bush's
part that he expected the WTO -- once again, a body
composed of bureaucrats representing America's foreign
economic competitors -- to protect our nation's
Caught in the WTO Web

President Bush's enthusiasm for WTO-supervised global
"free trade" explains why "you could almost hear a
collective sigh of relief" from foreign capitals over
his re-election, stated the December 2 Christian
Science Monitor. "Because of the administration's
strong commitment to free trade, the United States
looks ready to push for even more international
agreements that trim barriers to commerce." But the
"free trade" agreements in question -- which include
the North American Free Trade Agreement (NAFTA), the
proposed Free Trade Area of the Americas (FTAA) and
Central American Free Trade Agreement (CAFTA), and the
WTO -- are not designed to bring about genuine free

Properly understood, free trade results when a
mutually beneficial exchange occurs between buyers and
sellers, unimpeded by government intervention. The
agenda being pursued by the Bush administration and
its foreign cohorts, by way of contrast, defines
attributes of national sovereignty as barriers to
"free trade" and seeks to destroy sovereignty. At the
same time, it builds a WTO-supervised global trade
regime. The result would be the loss of our national
independence and the delivery of our national economic
destiny into the hands of foreign bureaucrats who have
no interest in our continued prosperity.

It is reasonable to believe that measures like the
"Byrd amendment" and the cotton subsidies are poor
policy choices by the federal government. Certainly,
if the intent is to make U.S. exporters more
competitive, the rational approach would be to reduce
or eliminate the tax and regulatory burdens on those
industries, rather than binding them more tightly to
Washington through subsidies. But U.S. policies should
not be decided by an international bureaucracy. And as
we will shortly see, the logic of the misnamed "free
trade" agenda requires that our central government
manage trade according to the dictates of the WTO.

Our Global Neighborhood, the 1995 report of the
UN-aligned Commission on Global Governance, described
the WTO as "a crucial building block for global
economic governance.... The WTO and advanced regional
groups such as the EU [as well as the envisioned FTAA]
will increasingly be faced with the issue that will
dominate the international agenda in years to come:
how to create rules for deep integration that go way
beyond what has traditionally been thought of as

The WTO is intended to dictate the rules governing
regional trade pacts such as NAFTA and the proposed
FTAA. The European Union, on which the FTAA would be
modeled, regularly defers to the WTO's jurisdiction,
and -- as seen earlier -- the EU expects the United
States to do the same. Completion of the FTAA pact
would effectively compel our nation to submit to the
WTO. Chapter II, Article 3 of the most recent draft of
the FTAA states that signatory nations will comply
"with the rules and disciplines of the World Trade

The Constitution assigns to Congress the power of
regulating commerce with foreign nations, as well as
imposing taxes and tariffs. No provision of the
Constitution allows Congress to delegate that power to
any other element of the federal government, let alone
foreign multilateral bodies like the WTO. And it
should be remembered that economic integration, as the
Commission on Global Governance intimated, leads to
political integration and the loss of national
independence. Thus Congress' approval of U.S.
membership in the WTO was nothing less than an act of
betrayal that borders on treason.

A decade ago, Congress approved U.S. membership during
a "lame duck" session of Congress. This was brought
about through the bipartisan cooperation of
then-president Bill Clinton and Republican
congressional leaders Newt Gingrich and Bob Dole.

As Gingrich himself admitted in testimony before the
House Ways and Means Committee, approval of WTO
membership was nothing less than a "transformational"
moment, a fundamental alteration of our system of

   I am just saying that we need to be honest about
the fact that we are transferring from the United
States at a practical level significant authority to a
new organization. This is a transformational moment. I
would feel better if the people who favor this would
just be honest about the scale of change.... This is
not just another trade agreement. This is adopting
something which twice, once in the 1940s and once in
the 1950s, the U.S. Congress rejected. I am not even
saying that we should reject it; I, in fact, lean
toward it. But I think we have to be very careful,
because it is a very big transfer of power.

Had Gingrich's professed reluctance been rooted in
principle, rather than a case of rhetorical
posterior-protection, he could easily have held up
approval of the WTO until after the new Congress
convened. But he and his co-conspirators (no other
word is adequate) were desperate to thwart careful
deliberation of the proposal by the new Congress,
which was loaded with freshman members leery of
entanglement in multilateral bodies.

In any case, Gingrich accurately recounted the history
of the WTO and its aborted predecessor, the
International Trade Organization. Previous efforts to
subordinate the U.S. to a global trade body had come
to naught precisely because Congress was able to
exercise its deliberative function. The WTO's backers
didn't intend to allow our country a third chance to
escape the WTO trap.
Another House that Hiss Built

In the aftermath of World War II, a coterie of
international elitists proposed a constellation of
multilateral economic organizations to supplement the
United Nations: the World Bank, the International
Monetary Fund, and the International Trade
Organization (ITO). In 1947, a delegation of U.S.
diplomatic officials attended a conference in Havana
intended to finalize the framework for the ITO.

Acting as chairman for the U.S. delegation to the
Havana Conference was none other than Alger Hiss --
the notorious Soviet agent who, along with Soviet
official V.M. Molotov, had co-written the UN Charter.
Hiss also served as secretary-general for the UN's
founding conference in San Francisco. Critics of the
UN have long described that disreputable body as "The
House that Hiss Built"; the ITO was, in large measure,
the work of the same treasonous architect.

Although the Senate approved U.S. membership in the UN
with only two negative votes in 1945, by 1947 public
opinion regarding globalist institutions had shifted
significantly, and Congress had followed the public's
lead. Congressman Bertrand Gearhart (R-Calif.)
described the Hiss-led delegation at Havana as
"boatloads of smug diplomats, all-wise economists 

experts, theorists, specialists and whatnots, sailing
gaily from our shores to barter away 
 the little
factory in Wichita, the little ship in Keokuk."

When the final draft of the ITO pact was presented in
March 1948, it met with insurmountable resistance from
both Congress and the public. Although the ITO
agreement was depicted "as a charter to 'free world
trade,'" it was actually "a charter for trade
control," noted George W. Malone (R-Nev.). "The result
of its adoption would have been socialism, on a global

Across the party divide, former Congressman Samuel B.
Pettingill (D-Ind.) agreed with Senator Malone.
Pettingill opposed the ITO "because it is part and
parcel of international socialism, one-worldism, and
the slow surrender of American sovereignty." The
General Agreement on Tariffs and Trade (GATT), which
the ITO was intended to enforce, "calls for a vast
complex of multilateral negotiations with many nations
in a sort of world super-legislature where we have one
vote," continued Pettingill. "Once wrapped up in this
spider web, it will be difficult indeed to recapture
any independence of action."

Business groups also spoke out in opposition to the
ITO. "The entire document reflects an excessive
acceptance of economic planning," protested the U.S.
Chamber of Commerce. The National Foreign Trade
Council warned that "if the United States subscribes
to the charter it will be abandoning traditional
American principles and espousing, instead, planned
economy and full-scale political control of
production, trade, and monetary exchange. The charter
does not reflect faith in the principles of free,
private, competitive enterprise."

Not surprisingly, although two attempts were made to
secure congressional approval for the GATT accord, the
ITO charter was never presented to Congress for

But for the Global Power Elite, "no" doesn't mean "no"
-- but rather, "not yet." The same globalist,
socialist body that had previously been decisively
rejected was renamed the World Trade Organization and
secured approval in 1994 -- thanks to the timely help
of globalists in the Republican Party's leadership
"Pincers Movement"

The WTO and the United Nations, wrote Senator Malone
in his prophetic 1958 book Mainline, are two arms of
"a pincers movement 
 both on the domestic and on the
international scene." One arm of that pincers was
political -- the steady entanglement of our nation in
international alliances and multilateral bodies,
particularly the UN. The other arm was economic --
created by the Trade Agreements Act of 1934, in which
Congress ceded to the Executive Branch the power to
control our nation's trade policy.

Because of the 1934 act, wrote Malone, "the business
and the enterprise of individuals now were considered
in close connection to the policies of the State. The
State would assist them in the expansion of their
markets. Government would negotiate the channels of
trade." In brief, "the State would determine trade,"
and the president, not the Congress, would exercise
that power.

The president, in turn, was given the means to
surrender that authority to foreign bureaucrats. And
that betrayal has been carried out by a succession of
presidents from both sides of the narrow partisan
divide. As Malone warned more than four decades ago,
"That power is now being increasingly invested in
international groups, and removed from our Nation's
control." As President Bush's deference to the WTO
illustrates, that body is rapidly assuming control
over our nation's economic destiny.

The ideological bent of the WTO can be inferred by a
brief examination of its director-general, Thai career
politician Supachai Panitchpakdi. As Thailand's deputy
minister of finance, Mr. Panitchpakdi "introduced the
value-added tax system [and] laid the foundation for
the establishment of the country's Export-Import
Bank," notes his official vitae. As chairman of that
country's International Economic Policy Committee, he
led the campaign for ratification of the WTO and
"ensured his government's full and faithful
implementation of its obligations" under that body.

As a graduate student at the Netherlands School of
Economics (now Erasmus University), Panitchpakdi was a
protégé of the late Jan Tinbergen, a Dutch physicist
who won the 1969 Nobel Prize for economics. Tinbergen,
a resolute socialist and advocate of central economic
planning, donated his supposed expertise to the League
of Nations in the 1930s and became an unofficial
adviser to numerous non-aligned socialist governments
following WWII. As a socialist, recalls an official
Erasmus University bio, Tinbergen firmly believed that
optimal economic and social conditions can be achieved
by rational government policies. In later years he
applied these ideas to the economic world order, but
to his disappointment his proposals met with little

Tinbergen passed away in 1994, shortly before the U.S.
joined the WTO. It's fair to assume that, were he
alive today, he would feel a measure of satisfaction
over the unfolding WTO-administered global trade

Panitchpakdi's term ends next August. The odds-on
favorite to replace him is Pascal Lamy, a French
official who has the support of the European Union.
Lamy, "a French Socialist, will compete for the
coveted Geneva seat in a race that -- at this stage --
looks likely to include a Brazilian, a Mauritian, and
a Uruguayan," noted a December 13 Reuters report.

Get Us Out -- Now!

But why should America's economic fortunes be placed
in the hands of any foreign body, headed by any
foreign official of any ideological background? The
American colonists who withdrew from the British
Empire fought a war rather than allow a distant,
unaccountable parliament to claim the power in
principle to impose taxes. Under the emerging global
trade regime, the WTO is actually imposing punitive
taxes against the United States, with the acquiescence
and support of both the president and Congress.

This need not continue. Under U.S. law, every five
years (including this year) any member of Congress can
introduce a "privileged resolution" to end U.S.
membership in the WTO. Such a resolution must be
brought to the floor for a vote within roughly three
months of being introduced; it cannot be bottled up
indefinitely or killed in committee.

Five years ago, Rep. Ron Paul (R-Texas) took advantage
of this provision to force the full House to vote up
or down on whether to get the U.S. out of the WTO.
"[U.S.] membership in the WTO actually is illegal,
illegal any way we look at it," Rep. Paul advised his
colleagues in a 2000 speech on the House floor. "If we
are delivering to the WTO the authority to regulate
trade, we are violating the Constitution, because it
is very clear that only Congress can do this. We
cannot give that authority away. We cannot give it to
the President, and we cannot give it to an
international body that is going to manage trade in
the WTO. This is not legal, it is not constitutional,
and it is not in our best interests."

"It is not up to the World Trade Organization to
decide what labor laws we have, or what kind of
environmental laws we have, or what tax laws,"
continued Rep. Paul. Other countries "can toss their
own sovereignty out the window if they choose. I
cannot tell China or Britain or anybody else that they
should or should not join the World Trade
Organization.... I can, however, say that the United
States of America ought to withdraw its membership and
funding from the WTO immediately."

Rep. Paul's 2000 measure calling for U.S. withdrawal
from the WTO was lopsidedly rejected by a vote of 56
to 363. But now that the WTO has begun treading on
U.S. sovereignty, the result of a new vote to withdraw
from the WTO could be radically different -- if enough
informed Americans apply pressure on their congressmen
to put America first.

Readers are encouraged to ask their congressmen to
support a resolution calling for U.S. withdrawal from
the WTO. Click here for information on how to contact
your own U.S. representative and senators.

© 2004 is a Campaign of
The John Birch Society • Privacy Policy

Scott Darby
Darby700 at
Stop the FTAA--the biggest threat to our soverignty

More information about the Rushtalk mailing list