Isles must not be bound by U.S. trade pact
By Rep. Roy Takumi
Without any public input, Gov. Linda Lingle committed Hawai'i to the Central America Free Trade Agreement, despite its negative impact and without any legislative oversight.
At first glance, it doesn't seem that state legislatures need to be involved in international trade agreements. After all, these agreements don't involve state law, right? Unfortunately, nothing could be further from the truth.
When Congress narrowly approved CAFTA, a six-nation expansion of NAFTA, by a one-vote margin in July 2005, an increasing number of state and local officials raised serious concerns about the impact these agreements have on the ability for states to make decisions on how to spend their tax dollars.
The dirty little secret about "trade" agreements like CAFTA is that they are not mainly about trade. Rather, these agreements contain hundreds upon hundreds of pages of international law on non-trade matters that mandate all levels of government to follow. CAFTA even has rules dictating how the federal government and some state governments, may spend taxpayer dollars.
Like other states, we frequently pass laws that use the state's significant purchasing power to promote worthy goals such as "buy local" laws, policies to prevent offshoring of state jobs and recycled-content laws. Under trade agreements like CAFTA, some of these common-sense policies could be considered "barriers to trade."
When the United States trade representative was negotiating CAFTA, governors, including Gov. Lingle, were asked whether they would volunteer their states to be bound by CAFTA's restrictive procurement policies. Most governors refused to do so after concluding that this would be giving up too much state authority. More recently, a bipartisan group of governors from eight states withdrew their support after initially agreeing to comply. Gov. Lingle was not one of them.
Her decision, which was made without public hearings held by the state Legislature, means that Hawai'i is bound to follow CAFTA's government procurement rules. Her commitment basically handcuffs state policymakers by limiting the procurement policies Hawai'i can adopt or maintain. For example, Hawai'i has a preference for purchasing paper made with recycled content. We also have a Hawai'i preference law to help local businesses. These sorts of "green" or "local" purchasing practices are prohibited under CAFTA.
Gov. Lingle's decision was more than a symbolic one. When CAFTA goes into effect, CAFTA countries will be empowered to challenge these types of state laws in the non-transparent and binding dispute resolution system that accompanies the pact. Hawai'i's attorney general and other state officials would have no standing before this tribunal and must rely on the federal government to defend any challenged state law. State laws that the panel determines are violations of the rules must be changed or perpetual trade sanctions are imposed. Additionally, the federal government is obliged to use all constitutionally available powers — for instance pre-emptive legislation, lawsuits or cutting off funding — to force a state's compliance with trade tribunal rulings.
I believe that Gov. Lingle acted outside of her authority when she unilaterally agreed to bind Hawai'i to the terms of international trade agreements; procurement policies are clearly a legislative function. At the federal level, Congress approves or rejects trade agreements negotiated by the executive branch. The Legislature should have this same right and responsibility to participate in the decision about whether the state should be bound to a foreign agreement.
The Bush administration is now working to expand the CAFTA model through negotiation of various new "trade" agreements with 27 additional countries. The state of Maryland has already enacted a state law requiring legislative approval of the state's procurement commitments in international trade agreements and declaring invalid prior commitments made by the governor.
We should follow suit — decisions regarding whether or not to subject Hawai'i's procurement choices to second-guessing by foreign trade tribunals ought to be made by the 76 members of the Legislature through public hearings and not solely by the governor.
Rep. Roy Takumi, D-Pearl City, is the sponsor of House Bill 1914, relating to public procurement, which would require legislative approval for any international trade agreements.