The Stakes Have Rarely Been Higher
The Institute for Liberty (IFL) has come to the conclusion that ratifying the Law of the Sea Treaty is the most important property rights and wealth building step that America can take to maintain our leading superpower status and to exponentially grow our economy.
There has been a tremendous amount of disinformation about this treaty. In fact, just earlier this year, IFL thought we knew the truth about what was termed “LOST” and we signed a letter opposing ratification. We, like so many other conservatives, were given bad information.
In light of the facts, IFL dropped our opposition to the treaty and we are now leading the conservative charge for its ratification. I am meeting everyday with conservative grassroots leaders to ask them to join me in this imperative course correction and we are making a great deal of progress. Conservatives love to debate, but we hate to be misled. Given what we know now, the treaty’s appropriate moniker should be LOTS.
Trillions of dollars, global property rights for U.S. interests, critical navigation rights, and veto power over an international fund that could end up in adversarial hands is what is at stake. Ratifying the Law of the Sea Treaty will grow the U.S. economy while protecting our military and strategic interests around the world.
I am tired of losing out to China and Russia on the world stage. By not ratifying LOTS, the U.S. loses access to resources that lie in undersea regions that are outside of the current U.S. sphere of legal access – much in the same way that China and Russia are accessing oil that we have prevented ourselves from going after, now China and Russia are accessing vast amounts of rare earth minerals, and other critical minerals, that are essential to our economy and national security.
There Is a New Cold War
Russia and China, two of America’s most powerful strategic foes, are actively exploring the Arctic and Pacific for oil, gas and seabed mineral riches. The U.S. is not. Why? Because, Russia and China have ratified the Law of the Sea Treaty and the U.S. hasn’t. Without ratifying LOTS, the U.S. has no standing to apply for mining and drilling permits under international law.
Bottom line: there is a new Cold War taking place, and America is not winning. The seabed holds trillions of dollars of mineral resources. According to RT, a Russian/English news channel, Russian Foreign Ministry official Alexander Gorban last month stated his hope that “there will never be a “war for resources” – or an even “hotter” conflict – in the Arctic Region.” In the next breath, he then went on to reiterate that Russia is indeed "…trying to fight for the Arctic shelf…” Gorban is a close Putin ally and his acknowledgement that Arctic conflict is possible demonstrates the global stakes in play.
Russia is not alone in recognizing the value of the LOTS in the fight for global resource dominance. Five countries border the Arctic: Russia, the U.S. (via Alaska), Canada, Norway and Denmark (via Greenland). However, only one country is ineligible to mine or drill those resources -- the U.S. That’s because the U.S. is not a member of the international body that grants title, or property rights, to countries to engage in the exploration of seabed resources. That body is called the International Seabed Authority (ISA). Admittance into that body is accomplished via ratification of the Law of the Sea Treaty.
China is also utilizing LOTS and the ISA to aggressively pursue the wealth of the Arctic. According to a report by Elisabeth Rosenthal in the New York Times last month, “The Arctic has risen rapidly on China’s foreign policy agenda in the past two years,” said Linda Jakobson, East Asia program director at the Lowy Institute for International Policy in Sydney, Australia. So, she said, the Chinese are exploring “how they could get involved.”
China is already playing the role of the Russia of the Pacific. Right now, China is exploring U.S.-based mineral claims in the Pacific and there is nothing the U.S. can do about it. China is acting within the framework of international law and the U.S., because we have not ratified LOTS, has no standing in the International Seabed Authority to challenge China’s abuses.
Another concern about Russia and China centers on rare earth minerals which are found in abundance in the seabed. The U.S. requires an incredible number of military products for which rare earth minerals are essential. Those products have historically been manufactured here in the U.S., and ought to be. The U.S. also faces a serious munitions problem: today, a tremendous number of our bullets are manufactured in China…meaning that if we find ourselves cross-wise with the Chinese, they can cut off our supply of bullets.
When it comes to high-end military hardware, it is essential that America be self-reliant, not reliant on China and Russia for the minerals needed for our own defense products and national security.
Over 160 nations have ratified the Law of the Sea Treaty during the past 20 years. The U.S. now stands alone with Iran, Venezuela, North Korea and sad smattering of third world and disreputable nations in turning our backs on the greatest opportunity for wealth creation available on the globe today.
In doing so, the U.S. is not losing jobs and economic opportunity to BRIC nations and the rest of the world, we are surrendering them.
The Senate still has time to act to ratify LOTS and to set things right. This is the most important economic agenda item the Congress can take up – and they can still do it before the end of the year. With one vote, the United States Senate has the power to unleash staggering economic growth and jobs creation.
There have been some troubling Ailinsky-esque tactics at play by those who would rather raise money from, and get their names in front of, the grassroots conservative movement – by spreading disinformation -- than acknowledge that this particular treaty is not like others, and is actually critical to U.S. national security interests and to rebuilding our badly damaged economy.
Here are the most common ways that conservatives have been misled about the facts of this treaty, along with the facts that the conservative movement needs to know in order to help in this urgent course correction:
Myth: Ratifying the treaty does not benefit the US.
Fact: The opposite is true. Ratifying this treaty benefits the U.S. more than any other nation. Once ratified, the U.S. receives the largest Exclusive Economic Zone (area where the U.S. and only the U.S. can mine and drill the seabed) and also gives the US 100% veto power over all ISA funding disbursements.
Myth: Ratifying the Law of the Sea Treaty will create a United Nations bureaucracy.
Fact: Not true. Ratifying the LOTS creates nothing. Ratifying the treaty will give the United States a seat on the already-formed International Seabed Authority. The International Seabed Authority has existed for over 20 years. The ISA is the international authority that grants exploration and mining and drilling permits to all nations. The ISA also creates clear, legally binding, protocols for ships while navigating foreign waters. This is long established, current international law. The U.S. opting not to join the ISA does nothing except prevent America from receiving mining and drilling permits, while also creating a gray area legally for our military and for U.S. companies when dealing with waterways belonging to foreign nations. That is why every U.S. business association, including the US Chamber of Commerce and the National Association of Manufacturers, and every sitting military leader of a U.S. Command – including the Secretaries of the Army, Navy and Air force and the Chairman of the Joint Chiefs of Staff - supports the treaty’s ratification.
Myth: Ratifying the treaty will create a tax on US businesses.
Fact: Wrong. The treaty creates U.S. property rights for vast mineral and oil wealth. The ISA simply grants permits to countries to mine and drill for resources thereby giving companies and countries title – something vital to the very foundation of property rights. One cannot hold a property right if one does not first have title. Once title is granted and resource development takes place, certain Reagan amendments go into effect. Ronald Reagan fought for certain mineral rights for the U.S. and he got them in the 1994 amendments to the treaty. That’s why Reagan’s former Chief of Staff, James Baker, supports ratifying the LOTS. Just as with any other resource development project, there is a royalty schedule: no royalty payments of any kind for the first five years of resource development and after five years the royalties cap at 7%. Right now, Russia, China and 161 other countries are eligible to exploit global resources, enrich their nations, fill the ISA coffers with royalties, and then direct ISA expenditures around the world. Once the U.S. ratifies the treaty, we would be granted 100% veto power as to how all ISA resources from all countries are allocated. That is why Condoleezza Rice endorses the treaty – the U.S. pays up to 7% for just our country, but we get veto power over 100% of the ISA coffers for every royalty from every country. That means zero global mineral and oil wealth payments from anywhere in the world going to rouge states. The only way the U.S. can accomplish this is by ratifying the Law of the Sea Treaty and taking our seat at the ISA.
Myth: Ratifying the treaty will erode U.S. sovereignty.
Fact: False. Ratifying the Treaty does not give one ounce of U.S. power to any other nation or to the United Nations. In fact, the opposite is true. Once the U.S. ratifies the Law of the Sea Treaty, America has 100% veto power over all other ISA expenditures and activities. Once we join the ISA, the U.S. can assert our sovereign will over every other nation – unilaterally. Put another way, if the Law of the Sea Treaty is ratified, the ISA will be forced to ask U.S. permission for all expenditures. Right now, the power vacuum created by America’s absence in the ISA is being filled by Russia and China – an extremely dangerous proposition. Also, Russia and China certainly did not ratify this treaty in order to erode their own sovereignty. If Russia’s and China’s leaders are smart enough to ratify this treaty while preserving their national sovereignty, the U.S. can certainly do the same.
Myth: Ratifying the treaty will give aid and comfort to U.S. enemies.
Fact: The opposite is true. Ratifying LOTS and joining the ISA will strengthen national security. By NOT ratifying the treaty, Russia, China and other U.S. adversaries are in control of the ISA and they control where ISA funds flow. Conversely, if the U.S. ratifies LOTS, then the U.S. will have 100%, unilateral veto power over all ISA funding and can prevent resources from flowing to America’s enemies. That is why every single Republican Secretary of State dating back to the treaty’s inception supports ratification – from Henry Kissinger forward. Among the most vocal in support of the treaty’s ratification are Condoleezza Rice and her Senior Advisor John Bellinger III. Rice and Bellinger fought for Guantanamo Bay and the holding of terror detainees indefinitely, they defended water-boarding on behalf of the U.S. and the White House. Nobody can accuse them of ever once supporting anything that would give aid and comfort to America’s enemies or rouge states. They unequivocally support ratification of LOTS and U.S. admission to the ISA – because ratification strengthens US national security.
Myth: Ronald Reagan wouldn’t ratify this treaty.
Fact: Ronald Reagan’s Chief of Staff James Baker III supports the treaty’s ratification and he says that this version of the Law of the Sea Treaty is the version that Reagan fought for himself. Baker says that Reagan fought for the mineral rights contained in the treaty and that the mineral rights section is where Reagan’s objects rested – Reagan did not see “backdoor tax” or “sovereignty” boogiemen in LOTS or in the ISA. Hear from Baker yourself. In this video you can watch him talk directly about Ronald Reagan and Law of the Sea Treaty during his remarks of August 26, 2012 (between the time marker 35:29 – 36:32)
Myth: This treaty is an environmentalist ploy.
Fact: False. This treaty is backed by the US military; by the mining, oil and gas industries; by manufacturers; by the defense industry; and, by every living Republican Secretary of State and by every Republican president – essentially, this treaty is backed by everyone the environmentalist community loathes, sues and pickets. The supporters of this treaty are amongst the most vocal critics of so-called “global warming” and have fought the Kyoto Protocol tooth and nail. This treaty is about trillions of dollars of US wealth creation, hundreds of thousands of American jobs, and about the national security benefits that arise from the 100% veto power the U.S. gains over all other nations via ratification.
Myth: U.S. companies can explore mineral claims without ratifying the treaty and joining the ISA.
Fact: False. This is the issue of property rights, which is of tantamount importance in forging political stability and global prosperity. Right now, U.S. business’ mineral claims are imperiled because of our inability to participate in the International Seabed Authority. If other nations can lay claim to these regions, and have the lawful backing of the treaty and the ISA, then our businesses can legally be forced off these claims. U.S. businesses cannot subject themselves to a potential taking scenario where once that have developed a resource, it is taken by China or Russia.
Myth: Conservatives have never supported any treaty or international policy framework that mirrors the Law of the Sea Treaty.
Fact: Conservatives laud the work of Peruvian economist and political scientist, Dr. Hernando DeSoto, who theorized about why states with strong property rights protections are economically prosperous and politically stable. DeSoto talks about the importance of "clearing title" in his research. He writes quite favorably about the settlement of the American West, in which territory acquired by the United States was parceled out by the federal government, who in turn, cleared title to the to those parcels in order to secure settlement. And while the state governments could have done this themselves when they transformed from territories to states, they decided to send that title clearing and parceling responsibility to the federal government.
Had they not, chaos would have ensued, and the West would not have been settled.
That is, in essence, what the Law of the Sea Treaty does. It puts the responsibility for clearing title and parceling out the commons in the hands of the International Seabed Authority, allowing for a strong framework of property rights to give interested parties the certainty to make their investments.
The use of property rights to inform public policy problems isn't limited to land and conservatives are working on certain projects to prevent degradation of commonly-held resources by applying the principles of private property rights within the oceans. Building on the work of the Competitive Enterprise Institute and other libertarian organizations, IFL has been involved in the effort to apply private property rights to species conservation and replenishment. The work of former CEI Scholar Michael D'Alessi on oceanic fishery conservation has led to the creation of the Catch Shares program, which IFL has worked on in its "FairestCatch.org" initiative. In that effort, federal agencies are responsible for working with fishing councils to create private property rights in oceanic fish stocks-essentially parceling out the fish that can be caught and clearing title to those fish.
That effort has been supported by current CEI scholars, Montana's PERC, and libertarian environmentalists throughout the nation.
The Law of the Sea Treaty takes the same underpinnings from DeSoto’s work and conservative work on fishery issues and applies it to deep sea mining, and oil and gas exploration.
Ratification of the Law of the Sea Treaty is long overdue. With millions out of work, and an exploding deficit, ratifying this treaty is something the U.S. Senate can get to work to accomplish by the end of 2012. It is a critical step toward putting America back on a path to financial prosperity and to ensuring American exceptionalism.
LOTS prevents the U.S. from losing more ground to the Chinese and the Russians. It will generate trillions of dollars and create a tremendous number of jobs. It protects our national security. The concerns that Reagan had were fixed at his request, and according Reagan’s own Chief of Staff, James Baker, this is the treaty that Reagan negotiated and would have wanted ratified. It promotes the conservative principle of private property rights.
It’s time to ratify the Law of the Sea Treaty.
Andrew Langer is the president of the Institute for Liberty. The Institute for Liberty is an organization dedicated to promoting American exceptionalism around the world. It is currently involved in projects focused on promoting free trade and global prosperity, as well as using conservative principles, like private property rights, to address the world’s most challenging problems.
Originally published in Real Clear Politics, 28 November, 2012.