Unfair Trade: U.S.-Led Global Economic Policies are Behind U.S. Steel's Crisis
Published on Thursday, March 7, 2002 by WorkingforChange.com
Unfair Trade
U.S.-Led Global Economic Policies are Behind U.S. Steel's Crisis
by Laura Flanders
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. In the 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 the 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 that 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 resulting 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. (www.house.gov/kucinich/action/trade.html)

"Free Trade" is a kind of protectionism, after all. U.S. trade negotiators have 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 with 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." (http://epinet.org/webfeatures/viewpoints/global_strat_labor.html)

US influence over global policy protects some folks, just not workers. And then 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 pension costs.

Bush wants to give little and get much. The White House is counting on steelworkers 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 struggle, 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 laura@lauraflanders.com

Copyright 2002 WorkingforChange.com