Earth On Fire: Free trade, continued

No issue has roiled this year’s Democratic presidential contest more than free trade.

At a debate last week, Senator Bernie Sanders (I-Vermont) charged that during her tenure as a senator former Secretary of State Hillary Clinton “voted for virtually every disastrous trade agreement, which cost us millions of decent-paying jobs.”

In a previous column, I argued that the recent implementation of free trade agreements (FTAs) has shifted the energy-intensive production of goods to countries that lack stringent health, environmental and labor standards, in a process known as “race to the bottom.” These agreements have benefited multinational corporations and consumers in the developed world at the expense of a stable climate. Because of the word limit, I didn’t have the chance to fully explore the ways in which FTAs have contributed to skyrocketing greenhouse gas emissions. I will instead do so now.

In the aftermath of the Soviet Union’s dissolution nearly 30 years ago, a free trade frenzy seized Western diplomats, who pushed for the establishment of the North American Free Trade Agreement (NAFTA) in 1994 and China’s ascension to the World Trade Organization (WTO) in 2001. These accords transferred enormous power to multinational corporations by allowing investors to sue governments that had allegedly unfairly discriminated against foreign firms international court. Known as the “investor-state dispute settlement,” the use of this tactic in 2012 forced the government of Ontario to overturn  a previously passed law that mandated that the province source more of its electricity from renewable energy companies. In order to make the legislation more politically palatable, elected officials had required that a significant percentage of the equipment produced to comply with the law originate from Canadian suppliers, which the WTO found to violate Canada’s trade policy.

On the other side of the Atlantic, Vattenfall, a Swedish energy firm, sued the German government in 2009 for nearly $2 billion in damages for violating the Energy Charter Treaty. The state’s environmental minister, in response to significant local opposition and the increasing threat of climate change, had sought to delay the construction of a coal-fired power plant. Germany settled the suit with the company and obliged the local government to issue the contested permits for the facility’s erection. The plant began operating in 2014.

Numerous other examples of firms effectively forcing governments to abandon their clean energy policies abound. As the concentration of carbon dioxide in the atmosphere soars ever higher, we need to loosen the constraints on local and regional decision-makers so that they can respond to the urgent threat of global warming.

It’s for this reason Senator Sanders’ record and statements on the United States’ trade policy deserve far more praise than Secretary Clinton’s. The secretary’s full-throated support of NAFTA in the 1990s and the Trans-Pacific Partnership, one of the largest proposed FTAs in a generation, during her tenure at the State Department disqualify her as a climate champion.