Why do international trade agreements supersede policies put in place by top lawmakers?

New decisions are more often than not taken as final within the bureaucratic structure of the United States Government. Whether an executive order is penned by President Obama or the Supreme Court hands down a verdict, the power that rests with those officials makes that decision a law. The lengthy steps taken to achieve that result are there to prohibit anyone other than those officials from impacting that law.

Basic constitutional law labels federal decisions as the law of the land. Any judgments that depart from these decisions are just plain null or unenforceable. However, when the U.S. enters into international trade agreements, that sovereignty and precedence set by federal decisions is violated. The problem with these multi nation agreements is that when decisions are made by acting leaders, they are not always final.

Take for example the North Atlantic Free Trade Agreement, a 20 some year old, Clinton-era pact that proposed trade benefits for North American countries. NAFTA was sold as a job creator, by outsourcing menial jobs and replacing them with higher manufacturing and service sector opportunities. While this hasn’t been the case, this isn’t the part of NAFTA that I find my damaging. Rather the ability of fellow NAFTA nations and investors to make claims against governments, egregiously limits a state’s autonomy and prevents them from establishing precedent.

The part of the NAFTA agreement that allows investors and nations to make these claims is known as chapter 11. Under chapter 11, companies can and have sued for decisions made by a nation that impacts their business. For example Canada was sued by the U.S. based Ethyl Corporation for making the highly toxic substance MMT illegal. What’s worse is Canada lose the case quickly settling out of court for thirteen million. A statement by Barry Appleton, Canadian Lawyer for Ethyl Corp, sums up the power of chapter 11:

“It wouldn’t matter if a substance was liquid plutonium destined for a child’s breakfast cereal. If the government bans a product and a U.S.-based company loses profits, the company can claim damages under NAFTA.”

While the U.S. has never lost a NAFTA case, it is fast approaching a long and expensive battle against energy giant TransCanada. President Obama rejected a TransCanada pipeline late last year, citing the environmental impact of the pipeline and the minimal impact the pipeline would have on the economy. The Canadian company had a quick response, filing the suit and saying they “had every reason to expect its application would be granted.”

If the U.S. ends up losing the case led by a NAFTA tribunal, the impact goes well beyond financial costs. By allowing a set of international trade lawyers to determine the credibility of a U.S. president’s decision, we erode our government’s ability to make laws and protect public health, the economy, and the environment.

While the U.S. is currently well-connected within the NAFTA framework and it is virtually impossible to remove ourselves, this debacle is able to at least teach current U.S. politicians and leaders about the problems with international trade agreements. The Trans Pacific Partnership is currently under review by lawmakers and would have the same problems that NAFTA presents our country. By allowing a corporation to override our laws, we present an image of our nation focused on profit rather than protection.