The capitalists in the United States are preparing to march with their goods and investment through the opening they judge this pact has made.

They hope to profit in the short term, and over time to overturn the gains of the Chinese revolution.

Washington's preparations for the WTO summit have stumbled badly as the governments of a number of countries announced in the last week that they may not attend. They include the "leaders of Japan, Brazil, the European Community, and several developing countries," according to the New York Times. Disputes have arisen over specific questions of trade, and over the agenda that will guide the talks.

In the countdown to Seattle the U.S. rulers' demands that the European Union end agricultural subsidies have proved increasingly contentious. Paris is particularly incensed. France is the second-largest exporter of agricultural commodities, trailing only the United States, and the French capitalists fear the impact of competition with their more productive North American rivals. "Longtime [WTO] members, like France, are convinced that the United States is using its economic rise and unchallenged global power to draft rules that play to the strengths of American industry," reported the New York Times article.

Deep conflicts, especially among the powerful imperialist countries of Europe, North America, and Japan, threaten to derail the WTO summit and the round of extensive trade negotiations it is supposed to initiate

In the United States, the trade deal with China has been the focus of the attention of the big business media and of the forces that are organizing protests outside the WTO meeting. Trade union officials, environmental groups, and others have increased the anti-Chinese pitch of their calls for action in the wake of the agreement, which includes Washington's commitment to back the Chinese government's application for WTO membership. AFL-CIO president John Sweeny called it a "trade deal with a rogue nation."

Ultrarightist presidential candidate Patrick Buchanan also scored the agreement as "capitulating to Beijing at the expense of working American families, and for the benefit of transnational corporations." He and his "Buchanan brigades" plan to be in Seattle for the protests.

The organizers of the anti-WTO actions falsely point to the WTO and other international bodies as the cause of unemployment, environmental destruction, and infringement on national sovereignty." Their political trajectory promotes economic nationalism and American chauvinism, pointing away from the international solidarity working people need, and away from an understanding that Washington is the biggest enemy of working people in the United States and beyond.  
 

Capitalists' goals in trade deal

The debate today over trade with China stems from tactical divisions within the U.S. ruling class. The capitalist rulers differ over what stance will most effectively serve their mutually agreed-upon course: to seek the reestablishment of capitalism in the world's most populous country. Capitalists in the textile industry are prominent in the minority in their class who strike a "dissonant note" in opposing the pact, says the New York Times. Special tariffs for their industry will be phased out by the year 2005. Many union officials share their support for protectionist measures which penalize foreign competitors. The majority of the U.S. rulers, however, clearly back closer economic relations with China. The rulers argue over how best to blackmail and pressure Beijing; all agree that such tactics are necessary.

The U.S. rulers consider that they "lost China" in the years immediately following World War Two, when the Peoples Liberation Army made up of Chinese workers and peasants defeated the U.S.-backed Kuomintang forces of Chiang Kai-shek. In the following years, says Socialist Workers Party National Secretary Jack Barnes in Capitalism's World Disorder: Working-Class Politics at the Millennium, "The workers and peasants eliminated imperialist pillage and expropriated the emerging capitalist class in both agriculture and industry. These conquests made possible China's centralization as a modern nation," despite the Stalinist character of the leadership of the Communist Party of China. See ad on front page and excerpt on page 13.)

Washington and the other imperialist powers in Europe and elsewhere remain implacably opposed to the revolution and its gains. They have subjected it for long periods of time to diplomatic freezes, economic sanctions, vitriolic propaganda, and military threats.  
 

Businesses eye huge Chinese market

The "wide-ranging deal" on trade with China signed November 16 "has received a generally favorable response from foreign governments and corporations," wrote James Kynge, Beijing correspondent for the Financial Times on November 19. "[They are] excited over the wealth of opportunities that it opens up in the world's largest potential market." Under the deal, Beijing agreed to open up significant areas of the Chinese economy, including telecommunications and banking, to greater penetration by capitalist investors. Washington in turn pledged to support Beijing's application for membership to the WTO

Among the U.S. politicians who have gained most prominence as prospective presidential candidates in the elections next year, only Republican conservative figure Malcolm Forbes and Reform Party hopeful Buchanan have opposed the deal. The big-business press has, by and large, supported it. "The trade agreement between Washington and Beijing... is a desirable step," wrote William Pfaff in the International Herald Tribune on November 18.

"Business groups" would join the White House to "win approval in Congress," reported the New York Times. But congressional approval is "not a foregone conclusion," warned the British business weekly the Economist, noting that "Protectionist and anti-Chinese sentiments are widespread on Capitol Hill." Beijing has also yet to gain the agreement of 24 or more governments represented in the 135-member WTO before it can join the organization.

Businessmen in the United States hope to make quick profits out of the trade concessions pried open by Washington. "U.S. Investors Salivate Over Chinese Stocks" ran a headline in the New York Times on November 18. Stephen Roach, the chief economist at Morgan Stanley Dean Witter, stated in a cautious assessment that "The telecom area will be a real opportunity immediately." He noted that "Throughout most of the 1990's, the Chinese economy, which is about $1 trillion in size, has been growing at about 10 percent a year. This year it will grow around 7 percent, and it could expand at an 8 or 8.5 percent rate in 2000."

This growth, and the sheer size of the Chinese population and potential market and workforce attracts some capitalists. In one of a number of passages dealing with developments in China in Capitalism's World Disorder, Barnes speaks of the "bourgeoisie's dream of the great miracle—a billion Chinese consumers and value-producers." The prospect, however utopian, of a billion mouths drinking Coca Cola, munching hamburgers, and wearing, driving, and consuming other U.S. brands strikes the capitalists with almost irresistible force.

Massive internal changes are driving the growth in the Chinese economy, Barnes notes. "As recently as the opening of the 1980s," more than 90 percent of the population lived in rural areas. Barnes describes the "gigantic migration from the countryside to the cities that is unfolding." That migration totaled 100 million people by late 1998. "In search of a livelihood," says Barnes, "millions of toilers from the countryside in China continue to head... toward the factories and manufacturing establishments large and small.... Workers face low wages, extremely long hours, and often appalling health and safety conditions."

In the Special Economic Zones, concentrated in the south of China, "the Japanese, U.S., and other capitalists investing in China think they have died and gone to heaven. They have most of the rights of capitalists, but the state 'handles' the workers for them," says Barnes, referring to the Stalinist regime and its party, police, and military apparatus. "In the medium term," he remarks, "these conditions will permit a relatively rapid economic expansion."

Trade, however, between China and the United States remains modest. In 1997 U.S. firms exported more than $20 billion worth of goods to Taiwan, a country of less than 22 million people, almost twice as much as they shipped to China, a nation of more than one billion. Commerce between the United States and Mexico is worth far more in both exports and imports.  
 

Hopes to boost 'market reform'

The U.S. rulers plan to wield the trade agreement as a weapon against the economic and social relations that still mark China, and that flow from the revolution and its accomplishments. They hold out hopes that the deal can boost the market "reforms," and encourage the "reformers" in the Chinese bureaucracy. Stephen Roach, in the above-cited interview, said "it really is a watershed event for Chinese economic reform." William Pfaff in the International Herald Tribune wrote, "This agreement reinforces China's political reformers, led by Prime Minister Zhu Rongji."

An editorial in the November 20 Economist stated, "The central question... is whether Chinese Communism will be strengthened by membership of the WTO—as China's leaders must hope—or be ruined by it."

Reginald Dale, a columnist in the International Herald Tribune. described the capitalist rulers' "gamble" on November 23. "At best," he wrote, "WTO membership will hasten the economic reforms China has pursued for the past two decades and .... [bring] China closer into the fold of market democracies..." The big business media uses terms like "democracy" and the "rule of law" as euphemisms for capitalist social relations, or the direct exploitation of China and its working people by finance capital.

"At worst," continued Dale, "it will lead to political upheavals in China and breed enmity toward capitalism, leading to serious new tensions between Beijing and Washington."  
 

Washington tightens military ring

While the U.S. rulers believe they can make progress in undermining the workers state with their consumer goods and huge economic power, they are also welding a tighter military ring around China. President Clinton has given the green light to the development of an antimissile system frequently called Theater Missile Defense. The White House will decide whether to deploy these missiles, still in the early testing stages, next summer. U.S. military planners have openly discussed stationing them on the soil of Washington's Asian allies, including south Korea, Japan, and Taiwan. Beijing has protested these moves, as has Moscow.

At the same time conflicts have grown between the governments of China and Taiwan. Beijing claims Taiwan, where the defeated counterrevolutionary forces fled after the victory of the Chinese revolution in 1949, as part of its territory. When tensions rose in 1996 Washington demonstratively sent a naval ship into the Taiwan Strait in support of Taipei.

Three days after trade negotiators signed the trade pact, the FBI claimed to have found "new evidence suggesting that China may have stolen information about the most advanced U.S. nuclear warhead." The police agency was forced to retreat from charges of espionage it leveled at Beijing earlier this year after it failed to provide any evidence.

As part of the propaganda blitz against Beijing the U.S. rulers point their finger at the Stalinist government's denial of labor and democratic rights. A layer of politicians and union bureaucrats attack Washington for not doing so more strongly.  
 

Opposite of working-class solidarity

This is the opposite of organizing solidarity with the many workers and peasants in China who are beginning to organize to defend their rights. In fact the cannier imperialist investors fear the response of workers in China to the layoffs and other attacks that will accompany deeper capitalist investment. "Foreign competition is expected to eliminate more than 10 million jobs on China's farms, in its auto factories and in other sectors over the next five to 10 years," wrote John Pomfret in the Washington Post the day the pact was signed. Chinese agriculture would suffer especially from the imports of cheaper U.S. products, he reported.

"Even without foreign competition, angry workers and farmers have protested often enough to put the Government on edge," wrote Erik Eckholm in the New York Times.

The union tops have backed Washington's foreign policy throughout the postwar decades, and share Washington's hostility towards the Chinese revolution. On the whole, they stand with those politicians who want to isolate China more on the international stage, and place Beijing under more diplomatic, economic, and military pressure.

While the rulers in the United States are willing to invest substantially in China, things stand differently with the workers states of Eastern Europe and the former Soviet Union. They aim to reintroduce capitalism there as well, but their methods are not marked by the same illusions. The rapid transformation of relations between town and country that stands behind China's relatively rapid economic growth already occurred decades ago in those countries.

There, as Jack Barnes wrote in "U.S. Imperialism Has Lost the Cold War," a 1990 resolution of the Socialist Workers Party published in the Marxist magazine New International No. 11, "Despite relatively rapid initial industrialization and urbanization in a deformed and degenerated workers state—the more rural the economy at the outset, the longer this period can be—the rate of labor productivity growth peaks and decelerates toward economic stagnation and irreversible crisis. This is a law of development of these states." The resolution explains that "The average annual rate of economic growth in the Soviet Union, for example, peaked at roughly 6 percent in the 1950s and steadily slowed to the point of an absolute decline by 1989, just before the Stalinist regime collapsed."  
 

Contrast with Russia, Eastern Europe

In place of economic growth, there is economic decline. In an editorial titled "The Ragged March to Markets" the New York Times listed the performance of a number of countries east of Germany in the period since the late 1980s, when one Stalinist regime after another shattered under the blows of working people's protests and resistance. "Poland's economy," the editorial said, "is 20 percent larger than it was a decade ago. The economies of Slovenia, the Czech Republic and Hungary are about as large today as they were in 1989." But, the editors note, "Ukraine's output is 60 percent below its 1989 level; Russia's economy has been cut in about half. Incomes in Kazakhastan and Moldova are falling from already low levels."

The consequences of this continuing crisis for working people are horrifying. Almost half the population in Russia live below the official poverty line. Average life expectancy in Russia for men plummeted from 64 years in 1990 to 57 in 1995. Following the downfall of the Stalinist regimes, events rapidly showed that there would be no capitalist investment boom in these countries.

At the heart of the problem for the capitalists lies the manifest lack of what former President Richard Nixon described as a "management class" in a 1992 article stating that Washington could not claim to have won the cold war. In reality, it is the capitalist class that is absent. Even after decades of misrule by Stalinist thugs and bureaucrats, who aped capitalist economic methods and shut working people out of politics, the social relations that weave through these societies are different than those that prevail under capitalism. And when investors do start to impose their demands, they confront a working class that is determined to hold onto its social rights, including the right to some sort of education and employment.

The Stalinist rulers in Beijing will prove equally unable to maintain economic growth past the initial burst of modernization and migration, and will face the same kind of crisis and resistance that unseated their counterparts in Eastern Europe and the former Soviet Union. But the period of rapid growth is not yet spent in China. For the moment, capitalist investment in the Chinese economy far exceeds that in the other workers states. Capitalism's World Disorder notes that "In 1996 China was the recipient of $45.3 billion of foreign direct investment. That accounted for some 40 percent of all investment in plant and equipment that year in the Third World combined, and was a billion dollars more than the total foreign direct investment in eastern Europe and the former USSR as a whole for 1990-96."

Washington's policy towards Russia and the majority of the Eastern European countries contains the same ingredients as its policy towards China; as much as possible, it uses trade, investment, diplomatic, and military relations as weapons to weaken the workers states. But Washington has turned the military screws tighter in Europe than in Asia.

Having conducted several bombing campaigns and come to the brink of infantry invasion in Yugoslavia, Washington now has thousands of troops in Bosnia, Kosova, and Macedonia. In April of this year, NATO approved The Clinton administration's initiative and added Poland, the Czech Republic, and Hungary to its membership lists. The alliance's line was moved eastward to the borders of the former Soviet Union, despite Moscow's protests. "What logic would dictate that we freeze NATO's eastern edges where they presently lie," said U.S. secretary of state Madeleine Albright, celebrating the decision.

The White House has decided to develop its antimissile "defense" program over the Kremlin's objections. Like Beijing, Moscow recognizes that the missiles potentially give the Pentagon a first-strike nuclear edge for the first time since the 1950s, when the Soviet Union developed nuclear weapons as a measure of defense and deterrence. As part of the NATO alliance and after the test of strength in Yugoslavia, Washington also dominates European military affairs more than it does Asian.

Socialist-minded workers today stand with China and the other workers states in their conflict with the imperialist powers. They defend its revolutionary gains regardless of the Stalinist character of its leadership, in the same way that workers defend their unions under attack by the bosses and their government, in spite of the officialdom. On that basis, working people will be stronger to carry out the political revolutions that are required to overthrow bureaucratic misrule and install a regime that represents workers and working farmers.  
 

A nationalist, chauvinist campaign

The various forums and political actions that will occur outside the meeting of the World Trade Organization in Seattle, in contrast, have at their center defending Washington's "national sovereignty."

"The World Trade Organization has been granted spectacular powers," read a full-page advertisement placed in the November 22 New York Times by a group of 20 environmental groups. "The WTO is already among the most powerful, secretive, undemocratic and unelected bodies on Earth.... Here's the trade-off: Nation-states and their citizens sacrifice their democratic rights. Corporate interests gain them." The ad called on readers to join the protests in Seattle.

"National boundaries are more important to the bourgeoisie today than at any time in history," says Barnes in Capitalism's World Disorder. "Forget the hoopla about European unity, the North American Free Trade Agreement, the World Trade Organization, and the United Nations. To the most powerful ruling families of world finance capital, borders are becoming more important, not less.

"Why? Because national boundaries mark off two things the capitalist rulers need in order to maximize their wealth and protect it in face of rising competition"—currencies and the home base of the bourgeoisie's armed forces.

The WTO, the International Monetary Fund (IMF), and other such institutions are not all-powerful, supranational entities. Rather they register the relationship of forces among the major imperialist powers such as Washington, London, Paris, Berlin, and Tokyo, as well as codifying the unequal relations between these powers and the semicolonial countries of Asia, Africa, and Latin America.

What is the World Trade Organization? Washington took the lead in establishing the organization's predecessor, the General Agreement on Tariffs and Trade, which inaugurated the WTO four years ago. The WTO serves the interests of the "great" imperialist powers as they wrestle with each other for a bigger share in the domination and exploitation of the Third World It also registers the outcome of the trade conflicts between the big imperialist powers.

The focus on the WTO casts Washington in the role of victim instead of criminal. The WTO has no existence independent of the mighty imperialist powers. Even its budget, a puny $75 million, gives a clue to its real weight. The WTO serves as an adjunct to the exploitation of working people by the capitalist system, not a separate and higher form of it.

Similarly the International Monetary Fund (IMF)—which is justly hated by toilers throughout the Third World for the austerity policies it takes the lead in demanding in exchange for loans--does not stand above nation states. It acts on behalf of Washington and the other imperialist governments, and the capitalists they represent, helping to perpetuate the debt slavery of the semicolonial countries and transfer wealth into the coffers of the ruling families in the biggest capitalist centers.

A good example is the so-called bailout of Mexico following the collapse of the peso at the end of 1994. In return for a promised $50 billion in "loan guarantees" brokered by Washington and the IMF, the U.S. rulers wrested agreement from the Mexican government to deposit the country's oil export revenues in the Federal Reserve Bank of New York before being transferred to Mexico—or seized in the event of a loan default. The U.S. Treasury took a whopping $580 million in interest payments from the Mexican government in just two

A much larger international organization, the military pact the North Atlantic Treaty Organization (NATO) is also "not an organization" so much as "the registration of a certain relationship of class forces" says Barnes in Capitalism's World Disorder, discussing the "diverging interests" of NATO's members.

At Seattle, the imperialists will jockey for advantage against the Third World and against each other. When it suits them in their trade tussles, they will wave alternatively the banners of "free trade" or fair trade, labor rights, and the environment.  
 

Opposing 'sweatshops' abroad and at home

Many of those leading the protests take up these themes, urging Washington to place restrictions on trade with countries where there is a substantial level of child labor or where wages are particularly low, for example. Leaders of the Union of Needletrades, Industrial and Textile Employees (UNITE) have led a campaign targeting sweatshops in other countries. At the same time, they do nothing to counter the proliferation of sweatshop conditions in the garment and other industries in the United States itself.

Their anti-sweatshop campaign runs completely counter to the necessary work of organizing and leading the struggle of workers, whatever country they happen to be living in. UNITE policy director Mark Levinson said November 17 that the trade pact taking Beijing a step closer to WTO membership was "an outrage.... Once a country as big as China is in the WTO that may forever doom the WTO as a forum where progress can be made on labor rights."

The officials organize campaigns against foreign sweatshops not as part of organizing workers in struggle, but in an appeal to capitalists and their paid politicians to implement protectionist measures they hope will preserve the jobs of their dues-paying members.

The anti-sweatshop campaign has gained the approval of Thomas Friedman, a senior columnist in the New York Times who in March announced in a major feature in the newspaper a key lesson for the imperialists of their experiences in Russia and Eastern Europe in the post-Cold-War years. "The hidden hand of the market will never work without a hidden fist .... called the United States Army, Air Force, Navy and Marine Corps," he wrote.

In his column on November 21, Friedman claimed that working conditions in Sri Lankan textile plants will improve because "in today's global economy Sri Lanka must tie itself to Western retailers to survive.... There are still plenty of sweatshops [in Sri Lanka]," wrote Friedman, "and the Seattle protesters should go after them."

The Teamsters Union officialdom is running a similar campaign against the supposed "NAFTA Threat to Highway Safety." The North American Free Trade Agreement (NAFTA), like the WTO, has aroused protests from union leaders and others. Washington has used the pact to increase the exploitation of Mexico's human resources and national patrimony. The Teamsters officials' campaign opposes the "border [being] open to unsafe Mexican trucks and unqualified drivers."

These campaigns against sweatshops abroad, unsafe trucks, and to defend the environment provide grist to the mill of Washington's foreign policy. They are examples of economic nationalism. Their opposition to a "powerful and secretive"—and nonexistent—WTO strikes similar themes to the politics of political figures on the ultranationalist right, like Patrick Buchanan. "By bringing China into the WTO," wrote Buchanan after the announcement of the trade pact, "the President ... turned his trade portfolio over to global bureaucrats."

The opposition of such rightists to international bodies like the WTO reeks of international conspiracy theories, in which anti-Semitism plays a key role. Such "theories" were used to inspire reactionary gangs that dealt out violence to workers' organizations. In the case of the fascist movements of Italy and Germany, to name two examples, the organized workers movement suffered terrible defeats.

"Labor needs to chart an independent working-class course," argued Chris Rayson, Socialist Workers Party candidate for the November 2 election for the Port Commissioner of Seattle, in an October 26 article published in the Seattle Post-Intelligencer. "Instead of... protests against the WTO, it must champion international solidarity and back working-class struggles against U.S. bosses." Rayson called for the cancellation of the imperialist-held "debt of third world nations that is squeezing workers and peasants, destroying any chance for progress and development."  
 
 
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