The Emerging Global Constitution: Why Local Governments Could Be Left Out

By Schweke, William; Stumberg, Robert | Public Management, January 2000 | Go to article overview

The Emerging Global Constitution: Why Local Governments Could Be Left Out


Schweke, William, Stumberg, Robert, Public Management


Unrecognized by most state and local policymakers and managers, there are changes looming in the global legal environment that could profoundly limit the autonomy and policy discretion of subnational governments in the United States. The most far-reaching of these changes would make it more difficult for state and local governments to serve as "laboratories for democracy," places where future national policies are explored and tested in virtually every sector of governance before they are replicated on a national scale. Areas possibly threatened include banking regulation, economic development, government purchasing, consumer protection, working conditions, health and medical insurance, and environmental law.

The agreements, in fact, empower such multilateral bodies as the World Trade Organization and a new set of international courts and dispute resolution systems to rule on the legality of state and local laws concerning expenditures, procurement, regulation, taxation, licensing, and ownership. Policies found in conflict with these agreements must then be terminated, or trade sanctions and monetary compensations will be imposed.

Critics and proponents have described these changes in a variety of ways, including an "undebated amendment to the U.S. Constitution," "a bill of rights for investors," "a threat to sovereignty," "a level playing field for free trade and foreign investment," "a slow-motion coup d'etat," "an evolution in governmental sovereignty," and "a corporate-rule treaty." Whether the agreements are largely good or bad for state and local governments and their citizens, two facts are certain:

* To date, state and local officials have had little to say about these changes and little input into the negotiations.

* In the year 2000, the pace of negotiations will quicken on a variety of fronts that will reach further into the local domain.

Thus, the stakes are high in crafting this new global legal framework. These agreements change the balance among federal, state, and local governments; private and public sectors; and social and economic values. They force those who create or manage government programs in a variety of areas to worry about whether their activities conflict with international law. And they demand that state and local officials become parties to writing the fine print in these trade and investment liberalization agreements.

This article seeks to provide local government managers with an overview of these issues and to answer these questions: What are the most important current and looming negotiations, and what are they about? What is causing this movement toward a global economic constitution? How large a change in our federalist system of government is this likely to be?

Also, what government functions are likely to be most affected? Are any real, live programs being challenged by international bodies like the World Trade Organization? How is the U.S. government trying to protect these activities? Is there a flaw in this approach? How might city and county managers and other state and local officials get involved in this policy making and better shape the looming global agreements?

What Is the Shape of Things to Come?

The past director of the World Trade Organization (WTO) describes the new framework as an economic constitution, while trade scholars say the framework is designed to limit the powers of subnational government in countries with a federal system.

In fact, several existing WTO agreements already limit state and local purchasing power and economic development practices. In addition, NAFTA includes a chapter that empowers foreign investors to sue national governments if federal, state, or local policies nullify investors' expectations of future profits. All of these agreements could be dramatically expanded by international negotiations now in progress. Figure 1 gives an overview of how the negotiations could affect the powers of state and local government, and the following remarks expand on individual entries in the chart. …

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