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To: "Health Freedom, Codex Issues
Subject: WTO Demands Change in US Tax Laws: If Codex Reaches Completion- Vitamin Laws Will Also Be Forced to Change....
From: John Hammell
Date: Thu, 24 Jan 2002 12:12:06 -0500

IAHF List: (See statement below my comments by Congressman Ron Paul re the WTO forcing us to change our domestic laws) The WTO is now telling America we must change our tax laws. Due to pharmaceutical influence within their ranks, NNFA is lying to its members, claiming dietary supplement laws "can't be forced to harmonize to a finalized codex standard."

Like HELL they can't! The WTO can force us to do anything via their Dispute Settlement Panel, a star chamber proceeding that is rigged to kowtow to multinational corporate interests and via which every ruling made to date has gone against he public health, against the environment, and against individual rights. see The WTO can force us to harmonize to a Codex vitamin standard the same way the EU can force its member states to adopt an equally outrageous EU Vitamin Directive.

So why did Congressman Burton allow Karl Riedel of NNFA to lie in Court at the Codex Oversight Hearing last March when he said that Codex poses no threat to US domestic vitamin laws??? Why did Burton announce to his constituents on the air on the Stan Solomon radio show out of Indianapolis that he would hold a "fair oversight hearing" on the Codex issue, only to whitewash it and not properly address this issue?

Why did Burton ignore the letter sent to him by Congressmen Paul and De Fazio who told him that the Congressional Research Service told them all of our domestic laws are at risk of forced harmonization under threat of trade sanctions? (See click on spinning green disk to see gif file of letter from Paul/DeFazio to Burton). The only way a country can legally not be forced to harmonize to a codex standard is on a basis of safety, but NNFA has helped FDA to set us up by doing nothing to protest the false definition of vitamin safety represented by the pharmaceutically funded, heavily biased NAS paper "A Risk Assessment Model for Establishing Safe Upper Levels for Nutrients" See NAS paper and rebuttal, see SPS Agreement.

(Could it be that Burton caved to pharmaceutical pressure exerted by NNFA lobbying firm Parry, Romani, DeConcini and Symms to whitewash the hearing? Is THAT why Yetley from FDA was never pinned down with any tough questions despite the fact that she wrongly ignored Burton's signature in a letter telling her not to put the NAS paper on the table at codex? (See letters from congress)

Could it be that EHPM in Europe is endorsing the EU Vitamin Directive due to similar pharmaceutical influence within them? Could it be that NNFA is just as corrupt as EHPM by virtue of not paying any attention to conflict of interest problems within their ranks? Could it be that vitamin consumers world wide are being set up for genocide as corrupt politicians playing "dialing for dollars" look the other way, while only PRETENDING to protect us??? This sure is the case in the EU right now, and unless Americans wake up, we will soon have the same problem, because Burton whitewashed the oversight hearing on March 20, 2001. We have no protection." TARGET="_top">>

WTO Demands Change in U.S. Tax Laws

Many Americans already have grave concerns about the loss of sovereignty inherent in our participation in global government organizations like the UN and the WTO. Few understand, however, the extent to which Congress already capitulates to the globalists when it writes the laws that affect all of us.

Last week, the WTO appellate panel ruled that U.S. tax rules exempting some corporate income earned overseas from taxation constitute an "illegal subsidy." Incredible as it seems to liberty-minded Americans, the WTO and the Europeans are now telling us our laws are illegal and must be changed. It's hard to imagine a more blatant example of a loss of U.S. sovereignty. Yet there is no outcry or indignation in Congress at this naked demand that we change our laws to satisfy the rest of the world. I've yet to see one national politician or media outlet even suggest the obvious, namely that our domestic laws are simply none of the world's business.

The sad irony is that Congress already changed our corporate tax rules last year in an attempt to appease the Europeans, who had filed a complaint with the WTO about our treatment of corporate overseas earnings. The Europeans accuse us of "subsidizing" U.S. companies by not taxing every last penny of their foreign income. Yet virtually all European countries have what is known as a "territorial" tax system, meaning they do not tax their citizens and companies on income earned outside the country at all. By contrast, America has a "worldwide" tax system, which imposes tax on income earned anywhere. Even so, the WTO continues to accuse of us maintaining an unfair practice, setting the stage for Europe to seek billions of dollars in sanctions.

The solution to the WTO complaint is obvious- we should stop taxing foreign income altogether. Surely the Europeans could not object if we changed our system to more closely resemble theirs. After all, the IRS should not be taxing activity outside the U.S. anyway- it's outrageous that American citizens are actually less free than the socialist Europeans when it comes to income earned abroad. Prominent members of the Republican congressional leadership have stated they would prefer a territorial tax system, and I intend to hold them to it by introducing legislation that will end the taxation of foreign income.

This latest affront to our sovereignty makes it clear we must get out of the WTO if we hope to avoid further international meddling in our domestic affairs. The WTO is not about free trade, but rather government-managed trade that benefits certain corporate interests. The Constitution grants Congress, and Congress alone, the authority to regulate trade and craft tax laws. Congress cannot cede even a small part of that authority to the WTO or any other international body, nor can the President legally sign any treaty which purports to do so. The Founders never intended for our nation to become entangled in international trade agreements, and they certainly never intended to have our laws overridden by international bureaucrats. Congress may not object to being pushed around by the WTO, but the majority of Americans do.

WTO Foments A Trade War

by Llewellyn H. Rockwell, Jr.

[Posted January 22, 2002]

In an awful, but not unexpected, ruling on a long-standing dispute between Europe and the US, the World Trade Organization says that the US must stop permitting US exporters to set up foreign subsidiaries that save as much as 30 percent in taxes they would otherwise pay. Now the US must either raise taxes by eliminating loopholes or face massive new sanctions that will seriously harm our export sector.

In the complaint, the EU said that US tax breaks constitute an unfair subsidy, and the WTO agreed. Of course, by the same logic one might also argue that every American citizen is unfairly subsidized by enjoying more tax loopholes as compared with people in more-socialist states in Western Europe.

There's been a lot of talk recently about foreigners who hate our prosperity and civilization, and seek ways to inflict violence in retaliation. Well, here's another case in point, except these are not swarthy Islamic terrorists; they are diplomats and statesmen on nobody's list of suspicious characters.

If the duties are imposed, what will get hit? The short list include cereals, aircraft and spacecraft, iron and steel, nuclear reactors, boilers, mechanical appliances, electrical machinery, clothing and footwear, aluminum, tools, toys, paper, wood, books and newspapers, and wool and cotton. In short, just about the entire US export sector.

Just what we need: a trade war to follow a hot war, the combination of which could do to the US economy what the Air Force did to Afghanistan. Something or somebody needs to do something quick to avoid it, but the only option that anyone is discussing is the one the WTO seems to be calling for: raising taxes on US exporters.

How does it happen that this shadowy international bureaucracy can tell the US to raise taxes? Why is an international arbiter which is ostensibly devoted to promoting free trade now imposing on the US a choice between trade war and socialism? What got us into this mess?

The trouble began nine years ago, when the debate began on creating a World Trade Organization as a corollary to the IMF and World Bank--the additional institution that the folks who gave us Bretton Woods tried but failed to create after World War II. International trade is one of those glorious institutions of the market economy that needs no central regulatory agency, so good sense tells us that the attempt to erect a kind of regulatory dictator spells trouble.

No surprise that Bill Clinton was all for the World Trade Organization, but so was most of corporate America. Who was against it? Many people on the left who are against all world trade, and also a small group of principled free traders from the Mises Institute and the Competitive Enterprise Institute, who warned that a WTO would eventually try to pull some racket like this. It was obvious enough from the WTO's expansive charter.

The Mises Institute, for example, argued that the WTO could become an "enemy of free trade" and bring about "more trade litigation, reprisals, and disputes than the present system," and that it would "use its global powers to promote a big-government philosophy of full employment, demand-side fiscal management, sustainable development, and wealth redistribution." (The Free Market, February 1994)

But on the other side was a huge range of naive pundits who believed that the path to freedom and free enterprise lay in the creation of another layer of world bureaucracy. They said the WTO would bring about free trade by restraining governments from imposing protectionist policies.

These people promised that the WTO's powers to do harm were nil but (implausibly) its powers to do good were immense. They said that its teeth would never be used to harm the US but (implausibly) always to harm the US's competitors.

They said that the bureaucracy would violate no one's sovereignty, while completely forgetting that the agency might not always be under the political control of the United States, and that the US Congress is always looking for an excuse to increase taxes and regulations.

Consider these famous last words:

Jerry R. Junkins, CEO of Texas Instruments: "The fact is that WTO cannot change U.S. law; only Congress can do that . . . We want stronger rules--we will benefit from them. The WTO was set up to make sure other countries cannot cheat . . ." (Washington Times, November 29, 1994)

Bill Frenzel, special adviser to the National Association of Manufacturers: "The budget issue should not be an issue at all . . . Commerce needs rules and stability. The United States is the biggest trading nation in the world and needs" the WTO. (Washington Times, November 29, 1994)

Joe Cobb, Heritage Foundation: the WTO is a "major step toward more open trade to the benefit of all trading nations. . . . There are no sinister new powers for successful litigants to enforce the dispute settlement panels's decisions. . . The GATT agreement, and the WTO it creates, seems well structured to keep economic freedom dominant over the interest-group political pressures that compete to influence governments." (Backgrounder, "A Guide to the New GATT," May 25, 1994)

Claude Barfield, American Enterprise Institute: "A close examination of the new WTO and its power reveals that the organization has little more institutional authority [than Gatt] . . . In the future, neither new WTO rules nor dispute settlement panel decisions will automatically become binding upon the United States." (Washington Post, June 26, 1994)

William F. Buckley, Jr., syndicated columnist: Under the WTO, "it is all but inconceivable that foreign nations would gang up to force trade sanctions against the United States." (Orange County Register, August 17, 1994)

Brink Lindsey, The Cato Institute: "The WTO still cannot force a country to change policies or laws that violate its rules, but its rulings highlight practices that rob consumers of the freedom to trade." (Regulation, Volume 20.1, 1997)

Joe Cobb, again: "Does the WTO have any power over the United States that could undermine U.S. sovereignty? None whatsoever." (Journal of Commerce, November 28, 1994)

William Kristol, Weekly Standard: The WTO is "an historic free trade agreement and a big nut-plus for both the American economy and free-market principle." (Memo, Project for the Republican Future, November 30, 1994)

Bryan Riley, Citizens for a Sound Economy: "By enforcing already-established trade rules, the new WTO stands to primarily benefit the United States. .. . [A]s long as the WTO fulfilled its mandate to enforce rules designed to promote trade, individual freedom would gain a powerful ally against protectionist trade barriers worldwide." (Issues and Answers, August 20, 1994)

Virginia Postrel, Reason Magazine: "The treaty does not force the U.S. government to do or not do anything--neither GATT nor its proposed World Trade Organization has an army. . . . With the new treaty, and its predecessor, national governments bind themselves to respect the right of their citizens to trade." (Journal of Commerce, August 29, 1994)

Washington Times: "Understand this about the WTO. It has absolutely zero power--none, nada--to change US laws. . . . The biggest reason to support [the WTO] is to expand individual liberty." (Editorial, November 30, 1994)

Washington Post: "It is abroad, and especially in Europe, that the art of disguising protectionism as health standards has been brought to it highest level. Much of the language in the WTO's rules is the result of outraged protests by American exporters, who will at least get a weapon against this abuse." (Editorial, December 1, 1994)

Yes, I know it is impolite to actually hold people accountable for their past opinions, but so be it. These were the voices that paved the way for the US to enter into the WTO, which is now attempting to make the US choose between international conflict and higher taxes. Instead of creating the free-trade utopia we should all favor, it is now creating the legal conditions that will bring about trade war in the midst of a terrible recession.

The advocates of the WTO were convinced that if somehow we could give lots of power to a bureaucracy, this bureaucracy would behave exactly the way they hoped it would. Reminds one of what Mises said: "Nobody every recommended a dictatorship aiming at ends other than those he himself approved. He who advocates dictatorship always advocates the unrestricted rule of his own will."

What to do now? It's true that the WTO cannot literally force the US to raise taxes. There's always the option that Congress could throw a wrench into the WTO's gears by lowering corporate taxes across the board, thereby eliminating the alleged subsidy of current tax loopholes. When the news of this amazing event appears in the European papers, many Eurocrats will cough up their morning cappuccinos. It will also be a cold day in Hell.

Llewellyn H. Rockwell, Jr., is founder and president of the Ludwig von Mises Institute and editor of Send him email at Also, see his Daily Articles Archive.

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