BY DOUG JENNESS
The political forces within U.S. ruling circles favoring
more aggressive trade policies against capitalist competitors
in other countries are gaining momentum. This was pointedly
demonstrated by the March 17 vote of a big majority of the
House of Representatives to impose curbs on steel imports into
the United States.
Despite White House opposition to the bill, all but 13 Democrats voted for it; and even though the Republican leadership in the House opposed it, 91 Republican congressmen endorsed it. Chief sponsors for the "Steel Recovery Act," reflecting its bipartisan support, were Indiana Democrat Peter Visclosky and Ohio Republican Ralph Regula.
The editors of the Financial Times, a London daily, stated that the vote for steel import limits "is a warning shot that will be heard around the world. It does not mean the US is closing its market - yet. But it is a clear signal to Bill Clinton, and to America's trade partners, that they should prepare for trouble ahead."
Curtis Barnette, chief executive of Bethlehem Steel, said the House vote "is both symbolic and real. We are actively working with other steel companies and the unions to carry our message as forcefully as we can."
He was scheduled to press his case before the Senate Finance Committee on March 23. A similar bill, introduced by West Virginia Democrat John Rockefeller, is still being considered by the Senate. At this point it's not clear whether the legislation will get through the Senate, and even if it does, President Clinton's advisors say he will veto the measure. If signed into law the legislation would limit imported steel to the average monthly volume between July 1994 and July 1997. It would be up to the administration to decide whether to use tariffs, quotas, or voluntary restraints. In 1998 imports from Russia, Japan, and Brazil underselling U.S.-produced steel increased 33 percent.
Last month the Clinton administration said it would impose tariffs on products from Brazil and Japan for their "dumping" steel in the United States, and got agreement from the Russian government for voluntary restraints. This, however, was seen as inadequate by the steel barons and the legislators backing the stiffer import curbs.
Patrick Buchanan, the ultraright politician who recently announced his bid for the Republican nomination in the coming presidential election, hailed the House vote as "a powerful message to the White House that we must stand with American steelworkers against foreign regimes that kill their jobs and destroy their towns by illegal steel dumping." He added, "The day of economic patriotism has returned to America."
Steelworkers president: `America first'
In a similar nationalist vein, United Steelworkers of
America (USWA) president George Becker declared, "Steelworkers
and steel communities hold dear the notion that America's trade
policies should benefit Americans first. That may be a novel
idea in some quarters. But it was a winning idea today in
Congress."
Becker attributed the outcome of the House vote to the "Stand-up for Steel" rallies held around the country in recent weeks and to the tens of thousands of letters sent to legislators in Washington, D.C. This campaign to defend "American" jobs, conducted in collaboration with the steel bosses, has been the USWA officialdom's principal focus of activity for months and its program for fighting for jobs.
The Clinton administration and the Republican leadership in Congress also favor a more aggressive trade policy. However, they aren't tactically convinced that the right course is to confront their competitors with import restrictions that are against World Trade Organization (WTO) protocol and would likely lead to retaliatory measures that could escalate into all-out trade war.
"Once we start doing this with one industry, other industries will line up," Rep. David Dreier (R.-Calif.) stated. "It's very dangerous to move down this road of Smoot-Hawley quota protectionism," referring to the 1930 Hawley-Smoot Act that lifted U.S. tariffs to an all-time high and sparked a wave of retaliatory protectionist measures.
William Archer, Republican from Texas and chairman of the House Ways and Means Committee, put it this way: "The president's logic is clear. If the U.S. were to set up trade barriers now in our fragile world economy, we could have a much larger problem on our hands that would affect thousands more American jobs and threaten our economy." It would set a bad example, he explained to countries "whose leaders are under pressure to retaliate against American-made products."
However, during the House debate Rep. Dennis Kucinich (D.- Ohio) argued that even though the Clinton administration has not backed steel import restrictions, it has championed banana distributors. "Bananas did not build America," he stated. "Steel did. The administration cares more about bananas than about steel. Such a trade policy is, in a word, bananas."
Behind the banana war
Kucinich was referring to the seven-year trade conflict
between Washington and the European Union over European trade
restrictions on bananas produced in Central and Latin America
and distributed by U.S.-owned companies. Recently this dispute
has become very heated, and on March 3 the U.S. government
announced that it was taking steps to impose up to 100 percent
tariffs on more than a dozen European products.
This is in response to the EU's resistance to amend its banana-import rules to Washington's satisfaction. The products targeted, such as pecorino cheese and cashmere sweaters, will supposedly have greater impact on the European sellers than on U.S. buyers. The annual trade value of the goods is $520 million.
The background is that before 1993, companies in non-EU countries controlled 95 percent of the European banana market. That year tariffs were imposed on bananas not grown in former European colonies in the Caribbean, where European distributors dominate.
This left U.S. growers and distributors, whose bananas come mostly from Central and South American plantations - especially from Ecuador, Colombia, and Panama - in a difficult position. In the last six years U.S. companies like Chiquita and Dole have seen their European market plunge 50 percent. The banana plantations tend to be larger in Central and South America than the Caribbean islands, and production costs are lower, making bananas from these countries more competitive.
In 1997 the WTO ruled that the EU had to relax its tariff structure on bananas by Jan. 1, 1999. The changes made were unsuitable to Washington, which led to the March 3 retaliation. Even though bananas are a very small portion of the trade between the United States and Europe, this dispute has become heated because it's on the cutting edge of stepped up trade rivalry between capitalists on both sides of the Atlantic. Both sides are becoming more aggressive as price competition accelerates.
Other issues Washington is pressing on are the EU's ban on genetically modified food and hormone-treated beef, which is, in effect, a trade barrier to many U.S.-produced agricultural commodities. It is also upset over European subsidies to Airbus, Boeing's chief rival in the aircraft industry.
Neither the EU nor Washington are trying to dump the WTO at this point; rather each is attempting to shape it into an instrument that can be used to give legitimacy to its own trade demands, especially as they go into another round of world trade talks later this year.
Doug Jenness is a member of USWA Local 9198 in Roseville, Minnesota.