Localities Eye Global Trade role.(BUSINESS)

Article excerpt

Byline: Carter Dougherty, THE WASHINGTON TIMES

State and local officials are jumping into the national debate on globalization, led by an unusual state legislative committee in California that scrutinizes the effect of trade agreements on individual states.

Though the Constitution gives the federal government jurisdiction over international trade, this bipartisan group is worried that international trade deals threaten the American ideal of state sovereignty.

In California, state activism has centered on the Select Committee on International Trade Policy and State Legislation, headed by Sen. Sheila Kuehl, a Democrat from Los Angeles. The panel has taken aim at a provision of the North American Free Trade Agreement that allows companies to seek monetary damages from governments for violations of the 1994 pact.

Ms. Kuehl turned the committee into a platform for critics of NAFTA's "investor-state" dispute-resolution procedure after a Canadian chemical firm, Methanex, sued California in 1999 over a state ban on a toxic gasoline additive that was seeping into drinking water.

"It seemed to me that practically everything we do could be challenged under NAFTA," she said.

This view summarizes what many local elected officials of all political stripes from around the country feel is wrong with trade agreements. Free-trade advocates - including the Bush administration - say accords like NAFTA promote economic growth. But officials outside Washington worry that states are losing the power to chart their own destinies.

Whether the issue is environmental regulations, zoning and land-use rules, or antitrust laws, officials fear being hamstrung by agreements that are negotiated by the federal government, occasionally with their input, but without their consent.

This concern has created unusual alliances between Republicans and Democrats, all of whom want to protect state sovereignty.

Bev Perry, the Republican mayor pro tem of Brea, Calif., has joined the committee in trying to stop the NAFTA process from being incorporated into new trade agreements. She convinced the National League of Cities, which represents 130,000 elected officials, to complain to U.S. senators in March that the procedure could interfere with state action. …