Working for Change.com, March 7, 2002
Unfair Trade U.S.-Led Global Economic Policies are Behind U.S. Steel's Crisis
George W. Bush's decision to impose taxes of up to 30 percent on most imported
steel could spark a trade war with major European and Asian trading partners and
push consumer prices up, we're told. It also could -- and should -- spark a
much-needed national conversation about globalization and so-called "free trade."
Steel unions have been demanding a policy change in Washington for years.
last few months, they pulled out all the stops. Last December, members of the United
Steelworkers of America (USWA) camped out in the capital while workers and their
families lobbied their representatives. At the end of February, USWA was joined by
the Independent Steelworkers Union in sending workers from 12 states on hundreds
of buses, vans and planes back to D.C. to publicly raise their voices again, even as
hotlines set up in union halls around the country allowed members back home to call
the White House.
What were the steelworkers demanding? A 40 percent tariff on imported steel.
Thirty-one steel companies are currently in bankruptcy, threatened by cheap imports.
Before Bush's decision came down, some 600,000 steel workers stood to lose their
jobs and their health benefits for good. Presumably, a 30 percent tariff is almost what
the unions asked for. But is it the extent of what they need or want?
Critics of tariffs will argue forever that the problems facing U.S. steel
are intractable, a
product of bad management and authorless "global trends." Sure, there's has been
some bad management at some companies, but the rotten roots of the current crisis
reach way deeper -- in federal policies at home and abroad.
On Feb. 13, Leo Gerard, international president of the USWA, called on
government to break the "cycle of predatory practices employed by our trading
partners to undermine America's steel." The American steel industry "has been
devastated by unfair trade," said Gerard in testimony to the Senate Finance
Committee this February. (http://www.uswa.org/sra/gerardsenate021302.pdf)
The unfair trade he's talking about is the so-called "free trade" system
U.S.-dominated international financial organizations have forced upon the world. IMF
loans that come at the price of debt and austerity programs depress global prices by
pushing borrower-countries to produce cheap exports. "Free trade" policies like those
brought us the "Asian Flu" -- an economic collapse which hit Indonesia, Thailand,
Korea and the Philippines in the late 1990s, and spread to Russia and Brazil -- and
caused a crash in the demand for steel, as manic building booms slowed. Much of
the surplus then flooded into the U.S. market, a price depressant compounded by a
super-strong -- many would say overvalued -- U.S. dollar. The "strong" dollar
effectively subsidizes foreign imports relative to domestically produced steel.
"The Asian Financial Crisis, the collapse of the Russian economy, and the
flood of steel imports can all be attributed to the forces of free trade and
globalization," says steel-state Democrat, Dennis Kucinich. The same WTO
regulations which foster a race to the bottom in wages internationally make it difficult
for the United States to protect its industries -- even when, as Kucinich points out,
U.S. trade laws exist that could facilitate just that.
"Free Trade" is a kind of protectionism, after all. U.S. trade negotiators
persistently traded off the interests of workers and those who produce in the United
States in favor of investors, and those who want to outsource U.S. production to take
advantage of cheap labor elsewhere.
"Despite the label 'free trade,' the agreements have been mostly concerned
internationalizing the rights of U.S. investors to override national and local regulations,
particularly those that protect labor rights, human rights, and the environment," says
Jeff Faux of the Economic Policy Institute. Faux told the World Social Forum in Brazil
what a retired U.S. State Department official told him: "What you don't understand,"
said the official, "Is that when we negotiate economic agreements with these poorer
countries, we are negotiating with people from the same class. That is people whose
interests are like ours -- on the side of capital."
US influence over global policy protects some folks, just not workers.
there's the policy choice Washington continues to make in favor of
employment-based health coverage. That hurts workers and employers, both. Nearly
every other industrialized country has guaranteed national health insurance paid for
by tax revenue. In the United States, steel companies have to bear the costs not only
of current workers, but of retirees who've put in a life's work. There are about 150,000
active workers compared to around 600,000 retiree families. In his decision on tariffs,
Bush rejected the industry's request for a government bailout to pay coverage and
Bush wants to give little and get much. The White House is counting on
to vote "thanks for tariffs" this November -- and again in 2004. Bush's lead was narrow
or nonexistent last time in key, steel-heavy states, including Ohio, West Virginia,
Michigan, New York, Pennsylvania, as well as in Florida, where the largest proportion
of steel workers go to retire.
But if a probably short-lived trade tariff is all that comes of this hard-fought
steelworkers have little to be grateful for. What's needed is a reassessment of what
and who sets the terms of trade itself, and of U.S. policy decisions that should have
nothing to do with the WTO.
That's a bigger fight, and one that will need more of us in the tent city
the next time
the steelworkers decide to camp out.
Journalist Laura Flanders is the host of Working Assets Radio and author of Real
Majority, Media Minority: The Cost of Sidelining Women in Reporting. Her Spin
Doctor Laura columns appear daily on WorkingForChange. You can contact her at
Copyright 2002 WorkingforChange.com