China and the WTO

Louis Proyect lnp3 at
Wed Dec 8 10:53:57 MST 1999

[This was posted to PEN-L by Marty Hart-Landsberg, author of 2 excellent
Monthly Review books on Korea.]

Seeking to continue our discussion on the WTO and its aftermath, I am
getting concerned that the positive momentum of the Seattle activities may
well be endangered by progressive policy confusions.  Then again, it may
be a matter of media manipulation.

I refer to reports that seem to have certain progressive forces targeting
the vote on China as the logical follow up to the Seattle "victory."  An
example, a Wall Street Journal front page story (December 6, 1999)
entitled WTO's Failure in Bid to Launch Trade Talks Emboldens Protestors.
The article includes the following:

The talks' collapse left foes of free trade euphoric.  And they left
Seattle with a new energy, intent on fighting the Clinton administration's
next major trade goal: getting China in the WTO.  "China.  We're coming
atcha," yelled Mike Dolan, master planner of the Seattle protests, as he
celebrated the disintegration of the WTO ministerial meeting.  "There's no
question about it.  The next issue is China."

Later in the article there are quotes from Jeff Faux, president of EPI.
Faux says that critics worry that with China in the WTO it will be
"impossible to get labor and environmental standards" included into the
WTO.  And that is because China is a dictatorship and too big to push

Still later the article quotes Thea Lee, a progressive economist who now
works with the AFL-CIO, and more mainstream AFL-CIO leaders, as pointing
to the China issue and building to oppose it as the next big task.  One
example:  "The China vote is going to become a proxy for all of our
concerns about globalization," AFL-CIO spokeswoman Denise Mitchell said on

This is a very dangerous turn.  The fear about China is tied to the
continuing push on the part of the AFL-CIO leadership to reform the WTO by
adding a labor accord.  I am not surprised that they continue to push that
line.  But what I worry about is that other progressives and progressive
organizations might begin to have their focus turned in that direction.
Rather than capitalism, or even MNCs, or even the WTO as the enemy, we now
suddenly find that China is the enemy and that we need to keep it out of
the WTO so that we can preserve the potential for reform.  Very scary.

Coincidently, I happen to come across an article by an Economic Policy
Institute economist, Robert E. Scott, in the latest issue of the journal
Working USA.  Scott's article is entitled WTO Accession: China can wait.
In the article Scott argues that China should not be allowed into the WTO.
Why?  A major reason is that it has a state controlled economic system.
In fact, he specifically criticizes the country's economic controls as
when he says: "China's success in high-tech industries such as computers
and commercial aircraft is due in large part to a number of
market-distorting government policies, including requirements for
technology transfer to domestic firms, local context and offset
requirements, and import and foreign exchange licensing arrangements."
Later he says "The second structural problem (in dealing with China on
trade issues) is the dominant role played by China's state enterprises and
the power of the state and of leading government figures in limiting
market access and restricting access to foreign exchange."  All of these
interventions he finds unfair.  And no because they are used to rich the
few but because they are distortions that keep market forces from
balancing trade with the US.

He also says China should be kept out because it is a dictatorship.  And
it should be kept out because China's exports are targeted at the US.  And
finally it should be kept out because China's entry into the WTO will not
bring benefits to the US economy or US workers.

In the article he mentions that one of the ways in which China has
increased its high tech exports to the US is through the activities of
foreign direct investment.  He says: "As in the case of computers, the
United States exports parts and jobs to China's export platforms (foreign
owned factories within China that import parts and export finished goods)
and it gets assembled phones in return."  Scott sees this as China
dominating the US.  But while he criticizes China he never raises a word
about MNCs or global capitalism.

China, Scott says, should be allowed in the WTO, only if it agrees to
enforceable labor and environment standards.  And if it agrees to
quantifiable commercial benefits to US trade, meaning that China's imports
must go up and the US trade deficit must go down.  The latter must involve
China agreeing to appreciate its currency so that the deficit can be
reduced and to numerical targets in key product lines.  And finally the
WTO mechanism must be adjusted to allow the US to enforce these things.

Again the scary thing is that the EPI is a progressive think-tank and the
journal Working USA is a progressive journal.  But here we are making
China the big issue, and promoting as progressive, policies designed to
adjust the world so as to preserve capitalist market imperatives.  And all
in the name of protecting US workers.

The strength of the WTO movement was that for the first time in a long
time ordinary people began to see globalization for what it is, a
politically crafted, capitalist driven process.  This focus on labor
agreements and China as the next big issue to fight to preserve a "fair"
global economy is really a trap.  The Chinese government and the US
government and the Chinese elite and the US elite can fight this out.  I
do not think it is our major issue.  Our major issue is how to build upon
the awareness and energy generated by the WTO actions to create a real
anti-capitalist movement that operates on principles of international

I wonder what others think?  Do we need to intervene to keep the movement
on track?  Where are the confusions in the progressive movement that we
need to combat?  Or is this just a media attempt to confuse that does not
have to be taken seriously?

Marty Hart-Landsberg

Louis Proyect

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