1.1                             A resolution 
  1.2             memorializing the President, Congress, and the 
  1.3             Governor to ensure that international trade agreements 
  1.4             respect the traditional authority of state and local 
  1.5             governments to protect the public interest. 
  1.6      WHEREAS, the Minnesota legislature supports the benefits of 
  1.7   fair trade for local economies; and 
  1.8                             <b>BACKGROUND</b> 
  1.9      WHEREAS, the United States Trade Representative (USTR) is 
  1.10  negotiating with 34 countries in the western hemisphere to 
  1.11  extend the North American Free Trade Agreement (NAFTA) to those 
  1.12  countries, thereby creating a Free Trade Area of the Americas 
  1.13  (FTAA) that would eliminate barriers to trade, investment, and 
  1.14  services, while creating a single set of trade rules among 
  1.15  member countries; and 
  1.16     WHEREAS, the USTR negotiated the World Trade Organization 
  1.17  (WTO) General Agreement on Trade in Services (GATS), which went 
  1.18  into effect January 1, 1995; is currently preparing for 
  1.19  negotiations, due to begin June 30, 2002, to expand GATS 
  1.20  coverage and relinquish additional local regulatory authority; 
  1.21  and is anticipating the possible beginning of WTO negotiations 
  1.22  on investment and procurement; and 
  1.23     WHEREAS, trade agreements pertaining to services, 
  1.24  investment, and government procurement constrain the exercise of 
  1.25  state and local government authority to protect the health and 
  2.1   welfare of its citizens; and 
  2.2      WHEREAS, the traditional local authority of state and local 
  2.3   officials to develop and implement necessary policies for their 
  2.4   constituents must not be jeopardized by provisions of the FTAA; 
  2.5   and 
  2.6      WHEREAS, the USTR has declined to hold local hearings to 
  2.7   inform the public about the potential impact of the FTAA and 
  2.8   GATS negotiations on local communities; and 
  2.9      WHEREAS, the National League of Cities, National 
  2.10  Association of Counties, Council of State Governments, National 
  2.11  Conference of State Legislatures, and National Association of 
  2.12  Attorneys General have all adopted resolutions or otherwise 
  2.13  taken positions similar to the concerns expressed in this 
  2.14  resolution; and 
  2.15       <b>SUBSIDIES, TRADE IN SERVICES, AND PUBLIC PROCUREMENT</b> 
  2.16     WHEREAS, the FTAA chapter on subsidies includes subsidy 
  2.17  rules that potentially conflict with state or local lawmaking to 
  2.18  promote economic development; and 
  2.19     WHEREAS, the risk of conflict between proposed FTAA and 
  2.20  GATS rules on trade in services and state or local law is 
  2.21  relatively high because over 75 percent of the economy is now in 
  2.22  the service sector, and many services are regulated or provided 
  2.23  by state and local governments, including programs designed to 
  2.24  assist disadvantaged areas; and 
  2.25     WHEREAS, under GATS, WTO members will be making requests of 
  2.26  other WTO members to weaken state and local regulation of 
  2.27  services, including regulations relating to quality of services 
  2.28  and environmental protection, in order to open up domestic 
  2.29  markets to foreign corporations; and 
  2.30     WHEREAS, the risk of conflict between proposed FTAA 
  2.31  procurement rules and state or local law is relatively high 
  2.32  because over two-thirds of public procurement in the United 
  2.33  States occurs at the state and local level, including programs 
  2.34  designed to assist disadvantaged areas; and 
  2.35                      <b>INVESTMENT AGREEMENTS</b> 
  2.36     WHEREAS, foreign investors have already used the provisions 
  3.1   of NAFTA's investment chapter to challenge core powers of state 
  3.2   and local governments including, but not limited to, regulatory 
  3.3   power to protect groundwater, the power of civil juries to use 
  3.4   punitive damages to deter corporate fraud, the ability of states 
  3.5   to invoke sovereign immunity, and decisions by a local 
  3.6   government to deny a zoning permit for construction of a 
  3.7   hazardous waste dump; and 
  3.8      WHEREAS, the FTAA investment chapter creates foreign 
  3.9   investor rights that potentially conflict with traditional local 
  3.10  land use decision-making ability; and 
  3.11     WHEREAS, the FTAA investment chapter affects state and 
  3.12  local powers including, but not limited to, zoning, protection 
  3.13  of groundwater and other natural resources, corporate and tribal 
  3.14  ownership of land and casinos, law enforcement by courts, public 
  3.15  services, and sovereign immunity; and 
  3.16     WHEREAS, the FTAA investment rules deviate from United 
  3.17  States legal precedents on takings law and deference to 
  3.18  legislative determinations on protecting the public interest; 
  3.19  and 
  3.20     WHEREAS, the FTAA investment rules do not safeguard any 
  3.21  category of law from foreign investor complaints including, but 
  3.22  not limited to, laws passed in the interest of protecting human 
  3.23  or animal health, environmental resources, human rights, and 
  3.24  labor rights; NOW, THEREFORE, 
  3.25     BE IT RESOLVED by the Legislature of the State of Minnesota 
  3.26  that it respectfully memorialize the Administration, Congress, 
  3.27  and the Governor of Minnesota as follows: 
  3.28     (1) that the Administration and Congress should consult 
  3.29  with state and local officials prior to negotiating any 
  3.30  provisions of the FTAA or GATS, to ensure that trade negotiators 
  3.31  do not undermine the scope of state and local governmental 
  3.32  authority under the Constitution, while assessing the impact of 
  3.33  a proposed agreement on state and local laws and future 
  3.34  lawmaking authority, and, when necessary, providing general 
  3.35  exceptions to safeguard state and local sovereignty and protect 
  3.36  effective state and local programs and initiatives; 
  4.1      (2) that the Administration and Congress preserve and 
  4.2   respect the traditional powers of state and local governments by 
  4.3   requiring that United States negotiators of international 
  4.4   investment agreements do all of the following: 
  4.5      (i) either exempt state and local governments from the 
  4.6   scope of future investment agreements or exclude 
  4.7   investor-to-state disputes from investment agreements; 
  4.8      (ii) ensure that international investment rules do not give 
  4.9   greater rights to foreign investors than United States investors 
  4.10  enjoy under the United States Constitution; 
  4.11     (iii) ensure that international investment rules do not 
  4.12  undermine traditional police powers of state and local 
  4.13  governments to protect public health, conserve environmental 
  4.14  resources, and regulate fair competition; 
  4.15     (iv) ensure that all proceedings are open to the public and 
  4.16  that all submissions, findings, and decisions are promptly made 
  4.17  public, consistent with the need to protect classified 
  4.18  information, and that amicus briefs will be accepted and 
  4.19  considered by investment tribunals; and 
  4.20     (v) provide that an investors' home government must consent 
  4.21  to the investors' claim against their host government, if 
  4.22  investor-to-state disputes are retained; and 
  4.23     (3) that the Governor of Minnesota not consent, opt-in, or 
  4.24  otherwise voluntarily relinquish any powers of the state or of 
  4.25  local governments of this state, without first consulting with 
  4.26  the Minnesota Legislature and with local governments. 
  4.27     BE IT FURTHER RESOLVED, that the Secretary of State of the 
  4.28  State of Minnesota is directed to prepare and transmit copies of 
  4.29  this memorial to the President and Vice President of the United 
  4.30  States, the United States Trade Representative, the Speaker and 
  4.31  Clerk of the United States House of Representatives, the 
  4.32  President and Secretary of the United States Senate, each 
  4.33  Senator and Representative from Minnesota in the Congress of the 
  4.34  United States, and to the Governor of Minnesota.