Left Approach to China Trade: A Critical View

Stephen E Philion philion at hawaii.edu
Tue Mar 28 11:32:56 PST 2000

After the current anti-China strategy fails, hopefully when the labor movement is thinking about which way to go next, it will consider views such as this more seriously. I think Doug reported recently that there is considerable tension within the AFL-CIO about the 'yellow peril' strategy, so there is hope. Hopefully that will be kept in mind before all out attacks on the AFL-CIO membership as falling in line with this policy also. This month's Monthly Review has an article by Bill Tabb that makes solid arguments for why this strategy is likely to fail, as has David Bacon recently.


Subject: Left Approach to China Trade: A Critical View


By Barry Sheppard, San Francisco Bay Area

The demonstrations in Seattle against the World Trade Organization have rightly inspired activists in the labor movement. Many have commented on the coming together of youth and students concerned about the destruction of the environment and U.S. corporations imposing sweatshop conditions in their factories in what used to be called the Third World, with tens of thousands of trade unionists concerned with the loss of better paying jobs, the reduction of real wages, and increasing economic insecurity. The consciousness of most of these forces at this stage could be summed up as "anti-corporatism." The big corporations and banks are seen as dominating the world for their own greedy self-interests at the expense of the majority of humanity and the world in which we live.

But which way forward for this movement, if indeed it becomes a movement as we all hope it will, has become a burning question in practice. Key will be the struggle between two opposite political strategies. One is the road of American Firstism and U.S. protectionism, advocated by the AFL-CIO top bureaucracy, and by some ultra-right politicians such as Pat Buchanan. The counterposed strategy is international working class solidarity, which must include solidarity with the world¹s peasant masses and with the nations that are exploited by the imperialist countries.

At first sight, the answer would appear to be obvious for labor activists on the left: we are internationalists, opposed to U.S. nationalism. But it is not so simple. Disagreements have arisen over just what internationalism means in the context of this movement. The sharpest expression of these differences has been whether or not to join what has become the axis of the AFL-CIO¹s protectionist campaign, the drive to keep China out of the WTO and to prevent Washington from granting China normal trade status with the U.S. Some left labor activists say "yes" to this campaign. Others, like myself, say an emphatic "No."

Before discussing the particular case of China, let¹s recall some basic facts about the world. Fact number one is that the nations of the world are not equal. There are a handful of advanced capitalist countries, with a minority of the world¹s population, which not only exploit their own workers and small farmers, but suck super-profits out of the so-called "developing" countries as well. Since the early 20th century this system of national oppression and exploitation has been referred to as modern "imperialism," and the advanced capitalist countries as "imperialist."

The "Third World" doesn¹t consist of "developing" or "underdeveloped" countries, terms which imply that they will catch up with the imperialist countries sooner or later. A better term would be "super-exploited" countries, for the truth is that the gap between these countries and the imperialist ones is growing, not diminishing, as I am sure we all know from many sources. Within all countries, imperialist as well as super-exploited, the gap between the rich and the workers and peasants is growing. The neoliberal policies being promulgated domestically and internationally have exacerbated the situation.

After over a century of imperialism, the world has now 800 million hungry people, one billion illiterates, four billion in poverty, 250 million children who work regularly and 130 million people who have no access to education. There are 100 million homeless and 11 million children under five years of age dying every year of malnutrition, poverty and preventable or curable diseases.

Even Clinton admitted in a speech he made in September of last year that while the rich countries have been long burdened with overcapacity, including in the production of food, 40 million people die every year from hunger.

The WTO, the IMF, the World Bank and the governments of the imperialist countries are imposing ever worse conditions on the super-exploited countries. Due to imperialist policies, the Third World debt to the banks of the First World has ballooned to over two trillion dollars, from $567 billion in 1980 and $1.4 trillion in 1992. The spiraling debt has become a perpetual motion machine of money flooding away from the super-exploited countries, as recalculated interest payments dwarf the principal and new loans are needed to pay off a part of old ones. These debts are a club the imperialist countries hold over the super-exploited, forcing them politically to acquiesce to imperialist policies such as opening their economies to more imperialist ownership, slashing social spending, etc. Imperialist profits also flow to the advanced countries as a result of such investments. A third way the super-exploited countries are ripped off is through unequal trade. Even if there were really free trade, which there isn¹t, because the imperialist countries routinely erect their own trade barriers, the gap between the have and the have not countries would necessarily widen. This is because of the big gap in the productivity of labor between the imperialist countries and the rest, due to the difference in when these countries adopted the capitalist mode of production, but especially in the fact that the "First" world, those who became capitalist first, imposed on the others a stunted and distorted version of capitalism that made them dependent, at the mercy, of the "first" world. They were not and are not being allowed to develop into "normal" capitalist countries.

This gap in the productivity of labor means that when products are traded on the world market between the imperialist countries and the super-exploited ones, the hours of labor exchanged are far from equal. In fact it takes more and more hours of labor in the over-exploited countries to produce the raw materials needed to buy one tractor, for example. While there is some high tech investment in the poorer countries by imperialist concerns, this generalization remains true overall. Moreover, the wages in those countries are very low in dollar terms due the difference in labor productivity, and to massive unemployment. An aspect of this massive unemployment has been the driving of hundreds of millions of peasants off the land because they cannot compete with low-cost agricultural products from the West. Another aspect of the displacement of the peasantry has been reorientation of farming to the needs of the world market, as happened with the Shah of Iran¹s "green revolution" that expanded production of pistachios and other products for the world market, a process that included the destruction of small farms. These landless peasants stream into and around the cities of the Third World, seeking jobs that are very scarce. One need only think of the slums of Bombay, Mexico City, Teheran, etc. Imperialist and local capitalist investments in these countries cannot meet the demand for jobs.

So what trade policy would help reduce the gap between the rich and poor countries, even without the overthrow of imperialism on a world scale? There are two sides to the question. The first is that the super-exploited countries need protectionist measures of their own, to allow their industries to develop in the face of competition from the advanced countries. Otherwise, the gap will grow.

The other side is that the imperialist countries should end all tariffs and quotas on goods from the over-exploited countries, especially concerning goods these countries can produce competitively because they do not require massive capital investment and are labor intensive, such as textiles and garments.

These two trade policies should be complimented by cancellation of the debt the super-exploited owe the super-rich.

In the longer run, trade between the advanced countries and the poorer ones should be based not on world market prices, which are largely determined by the labor productivity in the advanced countries. Rather, world trade should be based on exchange of equal hours of labor. This would help the over-exploited countries build up their economies and improve their labor productivity. Cuba succeeded in forcing the USSR to move in this direction, a fact which is expressed in the assertion by bourgeois apologists that the USSR "subsidized" Cuba. The adoption of such a policy, however, would probably take the victory of the socialist revolution in one or more of the advanced capitalist countries.

Of course, the imperialists are pressing in exactly the opposite direction from eliminating tariffs on goods from the poor countries, and allowing those countries to implement protectionist policies. They are demanding that the poor countries open their markets, while maintaining protectionist policies for the imperialist countries. A United Nations Development Program report in 1992 (and things have gotten worse since) put it this way: "20 out of 24 industrialized nations are generally more protectionist than they were ten years ago and their protectionism is exercised largely to the detriment of developing countries . . . Overall, we can estimate that world market restrictions cost developing countries approximately US$500 billion a year. Those $500bn in losses are equivalent to around 20% of the global GDP of developing countries and represent seven times the amount such nations currently allocate to spending on priorities related to human development." A good case in point is Latin America, where protectionist measures were put in place by many nationalist governments. One need only think of Argentina and Mexico. In addition to protectionist tariffs to protect local industries, there were substantial sections of nationalized industries protected from imperialist ownership. Under the whip of imperialist dominated international competition, and debt owed to the imperialist banks, Mexico and Argentina are privatizing like mad, including allowing imperialist investment in former nationalized industries. And they have been forced into accepting cheaper imperialist goods. This has been good for some sections of the local capitalists, at least while the "Asian flu" can be kept at bay, but it has been a big setback for the living standards of the masses.

It is in this context that we have to view the proposal by the AFL-CIO brass that the WTO should erect tariff barriers against countries where there is child labor, low wages, etc. Why is there child labor and low wages in the over-exploited countries? Because of imperialist exploitation, of course! Because of this exploitation, many families in the over-exploited countries cannot survive without their children working. And wages in these countries cannot match in dollar terms wages in the U.S. This call is phony through and through. It is merely an attempt to make more palatable the real demand of the AFL-CIO bureaucracy: more protectionism against the poor countries. What the AFL-CIO should be doing instead is building solidarity with workers and farmers in those countries as they fight for the right to organize to better their conditions. Calling on the imperialists to bar goods from those countries has nothing to do with solidarity with workers in those countries, but will punish them! To bar the importation of goods into the U.S. from the poor countries with child labor and low wages will mean more child labor and lower wages. The talk about child labor and low wages is just a fig leaf. And coming from the most powerful imperialist country, it is obscene! We should reject with contempt this protectionism for the richest country in the world.

We should also note that the AFL-CIO tops themselves have been complicit over the years with the CIA -- not in helping workers and farmers in the Third World but in smashing their unions in the name of anti-communism! Sweeny and company claim they¹ve changed their spots. We¹ll see. They are active in Indonesia, saying they are there to help build unions. Will they support class struggle minded unionists? Or are they more likely to support the kinds of unions they lead in the U.S. ­ class collaborationist ones? If the latter, those unions in Indonesia would be expected to act in the framework imposed by imperialism.

Take the example of the Union of Needletrades, Industrial and Textile Employees (UNITE) officials. They are lobbying for higher tariffs on garments from the Third World, supposedly to fight against sweatshops and low wages there. But barring those goods does exactly nothing to help workers in those countries to improve their conditions. This protectionist campaign is being waged in the context where Washington uses its dominance to impose 3,000 tariffs on clothing and textiles brought into the U.S.

The countries of sub-Sahara Africa ­ Black Africa ­ are among the poorest in the world. At a time when these countries are ravaged by AIDS, and 290 million Africans ­ more than the entire population of the U.S ­ are living on a dollar a day, UNITE has "united" not with the African garment workers, but with the U.S. garment employer¹s organization, the ATMI, to block a law Congress is considering to allow these countries to export clothing to the U.S. duty free ­ instead of the current 17 percent import tax. Even some Republican politicians apparently have more human solidarity than the leaders of UNITE.

We should note that UNITE is a major financial backer for student anti-sweatshop groups. These students are motivated by idealism and can easily be won to an internationalist perspective. They have already shown that by aiming their fire against U.S. corporations who super-exploit their workers in the Third World. The opposition to the WTO in Seattle is further evidence. And discussing the WTO, the IMF, and so on leads directly to a discussion on capitalism and imperialism, which can and should lead to socialist, internationalist, conclusions. Recently I spoke before a group of students, many who had been in Seattle, studying the WTO at the University of California at Berkeley and found receptive ears. But while the young people who have been attracted to this movement come to it in solidarity with the working people of the Third World, they are also naïve. Will the UNITE leadership win them over to their chauvinist views and slogans? Perhaps, if we don¹t present any alternative.

Another argument the labor tops use in defense of protectionism is that U.S. jobs are at stake. Capitalists can threaten their workers that they will build plants in countries with lower wages if the workers won¹t accept the bosses terms. And in fact the imperialists have built plants all over the world, in other imperialist countries as well as in over-exploited countries. They do so to be nearer potential markets, to take advantage of lower wages, and for other reasons. This cannot be stopped by raising tariff barriers. Calling for protectionism can seem to be a way to protect American jobs, but it isn¹t. It is a substitute for really fighting for jobs here, by calling for a reduction in the workweek with no reduction in pay, a massive public works campaign to improve deteriorating infrastructure and poor housing, etc. But that would mean waging a fight, including on the political level, which is not on the agenda of these "leaders."

Moreover, to wage such protectionist campaigns makes it appear that the problems workers face here are due to other countries, and not due to our own capitalist class, the way the capitalist system works, and the capitalist government. It puts workers in the position of defending "our" company or "our" American industry, against the world, including the workers of the world. A recent newspaper of one UAW local supporting the AFL-CIO anti-China campaign called for putting "U.S. jobs first!" This cuts across what is needed, international working class solidarity.

The China Question

Before the Seattle demonstrations, the Steelworkers union threatened to symbolically dump some Chinese-made steel in the harbour. I don¹t know if they actually did this. But they have been waging a campaign against imports of steel from China and other countries, charging them with "dumping" steel on the U.S. market. Just before the Seattle demonstrations, a full-page ad was run in the New York Times and possibly other papers I didn¹t see. This ad, calling for protectionism for the U.S. steel industry, was signed by various steel magnates ­ and the head of the United Steelworkers!

Every capitalist firm will "dump" their goods ­ try to undercut the prices of competitors ­ if necessary and it makes economic sense. Steel from China, Russia, and other countries presently has the price advantage of a strong dollar, so their prices can be lower in dollar terms.

The AFL-CIO¹s anti-China campaign is straight-out protectionism, designed to protect "our" industries from competition from this source. The campaign is being waged under the fig leaf of "human rights" etc., but that is what it is. This campaign appeals to still-existing anti-communism, the "threat" of "Red China," and the racist fears of the "yellow horde." It occurs in the midst of a major anti-China campaign of the right wing, a campaign that is also backed by the White House, although with more moderate language. Chinese-Americans have recognized the racist character of this campaign in their raising of concerns about the "spy" charges against the Chinese-American scientist Wen Ho Lee, and the anti-Chinese witchhunt atmosphere around the case. The U.S. still has China in its nuclear gun sights, and is once again playing the Taiwan card for all its worth. Clinton has given the green light to the development of an anti-missile system which the Pentagon has openly discussed stationing in south Korea, Japan and Taiwan. While the White House hasn¹t decided yet whether to deploy it, just the testing of the system is an open threat to China.

Recently, the Open World Conference, whose backbone was the Organizing Committee for a Workers International, was held in San Francisco. One person there who had a literature table was from an outfit called "State Department Watch." Most of his literature was directed against China, opposing China¹s inclusion in the WTO and opposing U.S. trade with China. He apparently had many good people bamboozled, as many labor activists were hobnobing with him. I was able to talk with him, and explained my views. Under some goading, he became angry and he blurted out his real position. He said that China was a threat to the U.S. because of its "billions" of people ready to spill out and dominate the world. He didn¹t use the words "yellow peril" but his meaning was clear enough. I asked him about his position on the major Presidential candidates, and he said that Buchanan was the only candidate speaking to the issue. He wasn¹t ready to say openly that he would vote for Buchanan, but lamely said he hoped a major party candidate might take a "good" stand against China.

I think the most hypocritical of all the "left" arguments on why we should be opposed to China being able to trade with the US and other countries is that we must do this in order to punish China for its ruling bureaucracy¹s trampling on human rights and workers¹ rights. Never in the darkest days of Stalin¹s terror did anyone who considered themselves revolutionists, including the staunchly anti-Stalinist Trotskyists, ever call on the U.S. not to trade with the USSR. Quite the opposite.

First, there is the hypocrisy of singling out China for such treatment, when the AFL-CIO never proposed such a "remedy" for Suharto¹s Indonesia, Pinochet¹s Chile, Mobutu¹s Zaire, Franco¹s Spain, Batista¹s Cuba, Rhee¹s south Korea, Chaing Kai shek¹s Taiwan, Somosa¹s Nicaragua, or the regimes of the Greek, Brazilian, Argentinan, Uruguayan, and Guatemalan colonels, and so on and so on.

The bigger hypocrisy is to look to the U.S. as world disciplinarian and protector of human and labor rights. Didn¹t Washington support all of the above regimes, and helped put in power most of them? Didn¹t Washington atom bomb Hiroshima and Nagasaki, and initiate the atomic arms race ­ weren¹t these actions detrimental to human rights? How many hundreds of thousands ­ millions -- of Koreans and Chinese did the US kill and maim in the Korean war? Doesn¹t the destruction of two million Vietnamese say anything about human rights? Didn¹t the USA keep millions under the heel of the Jim Crow system, and still oppresses Blacks and other minorities? Are the other imperialist powers any better? Why call on these forces to protect human and workers¹ rights in China or anywhere else? And why does anyone think that trade boycotts and blockades and high custom duties by the imperialist powers will improve human rights anywhere? They raise and lower trade barriers only in their own interests, and are for "free trade" one day and for "protectionism" the next, or sometimes for both on the same day.

The anti-China campaign strengthens Washington¹s hand in negotiations with China about trade. The agreements reached with China just before the WTO conference were spelled out by a State Department communique released November 15 of last year. These are some of the unequal trade positions the U.S. forced China to agree to:

*China will reduce custom duties on average from about 22% to 17%, and from 85% to 20% on imported cars.

*China agreed to progressively increase quotas for importing cereals, rice and cotton, and agreed that an important part of these imports could not be distributed by the state.

*China will do away with the state monopoly on soy oil.

*China will stop state support of exports.

*US firms will have new access to banks, insurance companies and telecommunications.

*US exporters to China have the right to control distribution of their goods.

*Concerning textiles, the USA and China agreed to take measures to prevent disorder on the markets after the elimination of quotas -- which Washington takes to mean that China should erect no barriers to the free flow of USA made products, while the US has the right to stop made in China products coming into the US.

This is an unequal treaty in the most elementary sense of the term. If workers in China organize to oppose these terms, we should give them all-out support. But such workers would not be demanding that China not be allowed to trade with the US, but that the terms of trade be more equal. Our demand on the U.S. government should be exactly the opposite of what the AFL-CIO is saying. Instead of trying to block Chinese goods from entering the U.S., we should be for ending all trade barriers for such goods. Instead of opposing trade with China, we should attack the unequal terms of trade Washington seeks to impose on China. As against Washington¹s demands on China to further open its markets to US goods -- which is the other side of the protectionist coin -- we should defend the right of China and all over-exploited countries to protect their own industries.

The "don¹t trade with China!" slogan is not just wrong, it is reactionary. It pits US workers against Chinese workers. It cuts across the only road forward for those who want to oppose imperialist globilization -- the international solidarity of all the workers and oppressed. Globilization is here to stay. The only question to be decided in struggle is globalization by whom and for whom.

Barry Sheppard is member and steward in IAM at SFO _________________________________________________________ Enlighten your in-box. http://www.topica.com/t/15

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