The Militant (logo) 
   Vol.66/No.7            February 18, 2002 
 
 
Washington sharpens its trade weapon
(feature article)
 
BY JACK WILLEY
The U.S. ruling class has continued its course of taking advantage of its economic and military dominance to advance its trade interests against its imperialist rivals in Britain, France, Germany, Japan, and elsewhere. Washington has become increasingly aggressive in imposing tariffs against imports under the pretext of "anti-dumping" laws, at the same time as it gives billions of dollars in tax breaks to U.S. companies to boost their competitive position.

The U.S. rulers are also taking a tough stand against a number of semicolonial countries on a range of goods from agricultural products to textiles and steel.

Conflicts between Washington and its imperialist rivals have arisen over a bill approved by Congress soon after the September 11 events. The defense legislation allows the Air Force to spend as much as $20 billion over 10 years in leasing 100 Boeing 767 jets to replace the current fleet of airborne fuel tankers.

European Union (EU) officials accused Washington of applying subsidies to the aerospace giant that give it an edge over its rival, Airbus. They pointed out that the deal had not been opened to competitive bidding and that Boeing's commercial operations are in fact underwritten by large government-funded defense and space operations--the fuel tanker plan being the latest example. Airbus is a consortium put together by the British, French, German, Italian, and other imperialist powers in Europe.

Several U.S. politicians and aerospace industry executives fired back, charging that Airbus receives state subsidies through government loans. In an effort to take some heat out of the dispute, the Air Force command announced that they may consider a tender by Airbus. Although the latter claims that it can lease the aircraft for 40 percent less money, the Air Force had shown no interest in giving the contract to a foreign competitor. A Boeing spokesman said that the government will simply use the Airbus offer to win some concessions from the Chicago-based company.

On January 22, in the latest round of punitive measures against the U.S. capitalists' competitors, the U.S. International Trade Commission imposed about $500 million in tariffs on enriched uranium imports from four EU-member countries. The duties were set at more than 32 percent for Eurodif, the French government-controlled supplier, and at more than 2 percent on shipments by Urenco, a British-German-Dutch consortium.

Washington claims the uranium companies are "unfairly subsidized" and that France's exports were sold at an "unfairly low value." The trade commission said the United States Enrichment Company--the only U.S. producer of enriched uranium--will gain up to $100 million in additional profits from the tariffs.

Washington is also considering slapping tariffs of up to 40 percent on steel imports to protect the U.S. steel trusts' home market. The move has not met with unanimous consent in the U.S. ruling class. Major corporations that heavily use steel in their products banded together in the Emergency Committee for American Trade have launched a counteroffensive to fight the tariff increases. They say the tariffs and quotas would cost U.S. companies that use steel up to $34 billion over four years.  
 
U.S. rulers lecture Tokyo
Despite these moves, U.S. Treasury secretary Paul O'Neill lectured the Japanese government about protectionist measures on January 23 during a visit to Tokyo. Addressing the continued decline of Japan's economy, the second largest in the world, O'Neill spoke against moves to let the yen fall in relation to the dollar.

"The weight of historical evidence shows that those who have tried to fix underlying economic problems with protectionist measures--and I count artificially depreciating the yen as one of those--actually weaken their own economy," he said.

A depreciating yen allows Japanese companies to gain a competitive edge for their exports by making them cheaper on the world market. At the same time the currency's decline increases the cost of imports into Japan. The yen has dropped 10 percent against the dollar since November.

The January 24 Financial Times of London expressed one of Washington's concerns, stating that "in the worst scenario, a series of competitive devaluations by other Asian countries could trigger a flood of low-priced exports to the U.S."

The government in south Korea has also accused Tokyo of tacitly approving the decline in the yen's value. This is a particularly sensitive question as Japan is Seoul's second-largest trading partner next to the United States. The Korea Trade-Investment Promotion Agency said south Korean exporters are losing out to Japanese manufacturers as a result.  
 
Agricultural products
Washington is also waging trade wars on agricultural and fishing products on behalf of the giant monopolies that control the buying and selling of food and fibers. It barred imports of sugar from Mexico while flooding its southern neighbor with low-cost corn syrup. And import duties on garlic have gone through the roof, boosting its price on the U.S. market.

To the north, while most of the $1.3 billion in trade that crosses the border between the U.S. and Canada every day remains duty-free, the two countries are in the midst of trade disputes over lumber, steel, wheat, and tomatoes. Eighty-seven percent of Canada's total exports go to the United States.

Last year, the U.S. government imposed 32 percent tariffs on Canadian softwood lumber. Canadian officials say that the measures have harmed an already weakening economy and forced mills to shut down. Sawmill closures have pushed thousands of people out of work.

Just months ago the U.S. Commerce Department placed "anti-dumping" duties on greenhouse-grown tomatoes from Canada, an industry that exported 224 million pounds of tomatoes to the U.S. last year. One British Columbian company faces a 34 percent tariff and most others a 24 percent levy.

The U.S. rulers are now threatening penalties on Canadian wheat and steel. They will make a final decision February 15 on whether to impose duties on durum and spring wheat. The North Dakota Wheat Commission marketing director Jim Peterson has charged Canada's wheat board with using "monopoly powers" to engage in "price undercutting" and with offering other indirect subsidies to farmers.  
 
Fishy pretext to curb Vietnam's exports
Meanwhile, Washington continues to put the squeeze on countries oppressed by imperialism. A recent example is the move to severely restrict fish imports from Vietnam. Vietnamese companies have captured 20 percent of the domestic catfish market in just four years, selling "basa" fish at lower prices. While the basa fish looks and tastes like catfish, Congress temporarily forbade Vietnamese importers from labeling it as such. The Senate may make the ban permanent under an upcoming farm bill--a move that could potentially slash Vietnamese imports into the country.

Catfish farming has expanded in the last decade as small capitalist ventures have tapped into this lucrative niche market. The Department of Agriculture has encouraged many working farmers struggling to make ends meet to convert their rice or soybean fields into fish farms. Having done that, they are forced to compete with the larger ventures. In the U.S., 120 million pounds of catfish fillets are consumed each year. In the state of Arkansas alone, the industry made $750 million dollars in 2001.

Brazilian foreign minister Celso Lafer issued a sharp warning to Washington over the future of the Free Trade Area of the Americas (FTAA) pact in mid December after provisions disadvantageous to Brazil's capitalist rulers began to come to light.

"If the American position in light of the 'fast track' is going to be extremely restrictive in relation to Brazilian products that are competitive for export," he said, "the Brazilian counteroffer will be equally restrictive." Lafer was referring to the "fast-track" authority granted U.S. president Bush in negotiating trade agreements. The bill granting this power was touted as giving Bush the ability to present trade agreements to Congress for straight yes-or-no votes. The legislators would supposedly lose the ability to make amendments.

It turns out, however, that the bill requires Bush to obtain Congressional approval before reducing tariffs on nearly 300 products, most of them agricultural. They include some of Brazil's most important exports, such as sugar, soybeans, and orange juice.

Brazil's president, Fernando Henrique Cardoso, said that the United States "has recently passed fast-track for FTAA negotiations, but with conditions which, if they are taken to the letter, mean that there would be no FTAA."

These measures coincide with Washington's preparations to pass a $175 billion 10-year subsidy program for the largest capitalist farmers and agricultural businesses in the United States.

Noting moves by the European Union to cut subsidies to farmers on the continent, an article in Barron's reported that "major agriculture-producing nations [that] took a more aggressive stance in the WTO [World Trade Organization] ministerial talks last November in Qatar...are now pressing the U.S. on its own agricultural protectionism. Brazil's agricultural minister, Pratini de Moraes, said Brazil won't take part in discussions for a Free Trade of the Americas until the U.S. reviews subsidies to its farmers. Brazil is considering filing formal complaints with the WTO over U.S. protection of its soybean and cotton industries."

A recent USDA report on subsidies drew the ire of agribusinesses by presenting the fact that most such payments go to the wealthiest farmers.

Washington again showed its hard-nosed approach to trade competition from its "allies" during a January visit by Turkish Prime Minister Bulent Ecevit. A January 17 article in the Wall Street Journal stated that "despite its importance as a potential ally against Iraq, Turkey joined a lengthening list of anti-terror allies that have come away empty-handed trying to win trade concessions from the U.S."

Ecevit had little to show after urging Washington to open up its markets to Turkish steel and textile imports. Instead, Washington said it would urge the International Monetary Fund to loan the country more money. On February 4 the IMF announced a $16 billion package of loans for Turkey, deepening its debt bondage to U.S. imperialism.  
 
 
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