NH Procurement Fact Sheet
Gov. Benson, Trade Agreements, and New Hampshire Procurement Policies
On November 18, 2003, Governor Benson sent an official letter to Robert Zoellick, the US Trade Representative (USTR), authorizing the USTR to include New Hampshire's procurement policies in five trade agreements that were being negotiated. Legislators and fair trade activists have questioned the Governor's actions based both on constitutional authority and the policy implications of tying state procurement policies to trade agreements.
What are state procurement policies?
State procurement policies are the terms by which governments purchase goods and services. Governments can develop procurement rules that promote public policy goals such as consumer protection, economic development, environmental protection, public health, and proper management of taxpayer dollars.
Which trade agreements are involved?
Gov. Benson's letter specifically authorized the USTR to offer access to the state's procurement market through: CAFTA (the Central American Free Trade Area, which includes Guatemala, Honduras, El Salvador, Nicaragua, and Costa Rica); FTAA (the Free Trade Area of the Americas, which includes 34 countries-every country in the western hemisphere except Cuba); US-Australia; US-Morocco; and US-SACU (South African Customs Union, which includes South Africa, Botswana, Lesotho, Namibia, and Swaziland).
What is the status of these agreements?
As of Nov. 18, none of these agreements were finalized and public; Gov. Benson committed New Hampshire to abide by policies that had not yet been written.
Since then, however, the US has completed agreements with Morocco, Australia, and Central America . New Hampshire is listed in the sub-federal or regional government sections of the agreements' annexes on government procurement. The Australia agreement was approved by Congress in July. Morocco was approved by the Senate in July. CAFTA has not yet been brought before Congress. The US-SACU agreement and the FTAA are still under negotiation.
What do trade agreements have to do with government procurement?
By tying procurement to trade policy, federal and state governments are agreeing to a set of conditions which would apply to all companies that want to bid on contracts. Any policy which is out of line with these conditions can be challenged as an unfair trade practice.
For example, under CAFTA, the following policies could be challenged as "barriers to trade:"
- "No off-shoring" laws and other local development policies aimed at keeping state dollars paying in-state wages or giving preference to goods produced in New Hampshire or the United States.
- Bans on goods made in sweatshops or by child or slave labor.
- Bans on goods made under repressive regimes.
- Prevailing wage policies and project labor agreements for construction projects.
How would this be enforced?
If a foreign country complains that NH procurement policy violates a trade agreement, it can take a complaint before an international trade tribunal, which would meet behind closed doors. The federal government, not the state, would represent New Hampshire before the tribunal. The tribunal, not NH legislators, would have the final say over NH procurement policy. The federal government would be required to use its authority to enforce the tribunal's decision.
What current New Hampshire procurement polices are affected?
It does not appear that any current NH procurement polices violate CAFTA. Legislators have, however, considered procurement policies that give priority to call center work done in the United States or for work done in parts of New Hampshire targeted for job creation. Legislators are planning similar bills for the 2005 session.
Does Gov. Benson have authority to set procurement policies?
Governor Benson unilaterally made the decision to bind NH to CAFTA and the other agreements. He did not consult the Legislature or Executive Council, nor did he inform the public. Under the NH Constitution (Part Two, Article 83) and established NH public policy, the Legislature, not the Governor has the jurisdiction over trade.
What have other states done?
Twenty-one states have bound their procurement policies to CAFTA. Seven other state governors initially made a commitment to CAFTA but have since withdrawn their state procurement policies from CAFTA.
What's the timetable for action?
The President has signed CAFTA, but Congress not voted on the agreement. There is still time to remove New Hampshire from the agreement. Once Congress acts, New Hampshire can remove itself from the treaty only with the permission of Congress and every other country that agrees to CAFTA.
What actions have happened?
On September 9, six New Hampshire legislators asked Attorney General Kelly Ayotte to investigate whether Governor Benson's action was constitutional. As of September 28, she has not responded.
What can I do?
- Write to the Attorney General. Tell her you share the concerns of the legislators about the Governor's authority to commit New Hampshire to the provisions of international trade agreements. Write: Kelly Ayotte, NH Department of Justice, 33 Capitol Street, Concord, NH 03301. Telephone (603) 271-3658. Fax (603) 271-2110.
- Write to Governor Benson. Ask him to remove New Hampshire from the procurement provisions of CAFTA and other trade agreements. Write: Craig Benson, Governor, State House, 107 N. Main St., Room 208, Concord NH 03301 . Telephone: (603) 271-2121. You can e-mail the governor from his web-site at: http://oit.nh.gov/goveforms/comments.asp
- Talk to your State Representatives and Senator. Tell them you support the legislators who are questioning the Governor's action. To find out who is your legislator, go to: http://www.gencourt.state.nh.us/ie/whosmyleg/
For further information, contact:
Arnie Alpert, American Friends Service Committee-NH, aalpert@afsc.org or (603) 224-2407
Mark MacKenzie, NH AFL-CIO, solidarity@nhaflcio.org or
(603) 623-7302.
September 29, 2004
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