Governor John Baldacci scored points with Maine international labor advocates this week when he withdrew Maine from the procurement sections of two US trade agreements, the Panama free trade agreement and the Andean free trade agreement (which involves Columbia, Peru, and Equador). The withdrawal means Maine will not benefit from purchasing deals established under the agreements, but will also not be bound by the rules of the agreements, which could force states to purchase from companies with poor labor standards.
The agreements, which have not been enacted yet, would affect trade between the US and the contracted countries in a manner similar to Cafta, the Central American Free Trade Agreement which eliminated tariffs and other trade barriers between the US and five countries in Central America. Bush heavies strong-armed Cafta into final passage in the House last year. Supporters of Cafta and other similar trade policies say they will improve export opportunities for US businesses, create jobs in the US, and provide more affordable goods to American consumers.
But Baldacci apparently believes Maine has more to lose than to gain from these two agreements.
In a March 20 letter to Ambassador Rob Portman, United States Trade Representative, Baldacci writes that our state's procurement rules, which include using buying recycled paper, purchasing fuel-efficient cars, and prioritizing local suppliers, would be threatened by the stipulation in both agreements that states avoid creating any "unnecessary obstacle" to trade.
"This constraint could presumably prohibit the state of Maine from adopting or enforcing its current preferences because such preferences could be seen either in purpose or effect as creating obstacles to trade."
What does that mean? Here's a likely scenario: Say Maine awards a state contract to a local business over an international one because of concerns about labor practices or quality of service at the international company. Under the rules of these trade agreements, the international company could cry foul, citing "obtacles to trade," and sue Maine for breaching international trade rules.
A press release from Matt Schlobohm, coordinator for the labor advocacy group the Maine Fair Trade Campaign, calls Baldacci's letter "excellent."
"It means that the sneaky trade rules on government purchasing will NOT apply to Maine," writes Schlobohm.
Baldacci urged Portman to include states more when federal trade policies are drafted and negotiated.