Vol. IV, Bulletin No.21.                                                        November 19, 1999 

Clinton Administration's Deal with China on WTO

Putting a Red Face on the Global Economy

"Two thirds of Americans oppose more free trade with China until it improves human and religious rights, according to a Reuters poll, revealing widespread opposition to the U.S. Administration's last ditch bid for a trade deal with China."
That was the lead paragraph of a November 10 Reuters news article reporting on a survey of 1,001 likely voters polled by Zogby International from November 6 to 8. "It is a staggering message," said John Zogby, president of the polling company. "It sends a message to the U.S. trade representative [then negotiating in Beijing] that it's certainly not all systems go."

At a Beijing press conference on November 15 the U.S. trade representative, Charlene Barshefsky, and China's foreign trade minister publicly signed a voluminous trade agreement designed to smooth China's entry into the World Trade Organization.  Ms. Barshefsky, described by the New York Times reporter as "clearly exultant," called the agreement "absolutely comprehensive," covering "all goods, all services, all of agriculture, [plus] a variety of rules with respect to import surges, technology transfers, state trading enterprises, dumping, investing, subsidies, and other issues."  (But not worker rights or any other form of human rights, apart from the rights of U.S. investors and business firms.)

Exuding Euphoria from Beijing to Washington and New York

No copy of the agreement was available. For its actual contents, Beijing reporters had to rely on a U.S. Embassy press release and Ms. Barshefsky's brief oral summary at the press conference. The next day, the page one reports in both the Washington Post and the New York Times reflected Ms. Barshefsky's euphoria about the agreement. In their background stories, both papers were silent about the negative public opinion revealed in the Zogby poll, as they had been when the poll's findings were released a few days earlier.

(For the text of the U.S.-China agreement, check the Website of the United States Trade Representative at http://www.ustr.gov/agreements/index.html. As of the date this issue of HRFW was posted, the text of the agreement signed November 15 was not available.)

Despite its close ties with the White House, the China deal apparently caught the AFL-CIO leadership by surprise. In a brief November 15 statement President John Sweeney attacked the agreement as a "grave mistake." In unusually sharp language he said:  "It is disgustingly hypocritical of the Clinton White House to invoke the need to 'put a human face on the global economy' while prostrating itself in pursuit of  trade deal with a rogue nation that decorates itself with human rights abuses as if they were medals of honor."

In a separate statement James P. Hoffa, general president of the International Brotherhood of Teamsters, said: "The inclusion of Communist China in the WTO is a slap in the face not only to workers in America but also to their counterparts in China." (For the full statement, see http://www.teamster.org/99news/nr_991115_1.htm.)

China Ignoring 'Even the Most Basic Rules of the World Community'

The Sweeney statement also made these points:

"At a time when WTO rules protecting worker and human rights and the environment are yet unwritten, this agreement undermines that possibility and squanders a chance for the WTO to achieve the legitimacy it and other international institutions lack among people around the world.

"By continuing to persecute dissenters, to imprison labor leaders and worker activists, and to export goods produced by child and slave labor, China shows it has no interest in playing by even the most basic rules of the world community.

"The agreement reached this weekend would deal away our democratic principles and most cherished values and we will fight it."

AFL-CIO views on China and the WTO are much more fully explained in "Making the Global Economy Work for Working Families," a speech Sweeney gave November 19 at the National Press Club in Washington.  It is available on the AFL-CIO Website at http://www.aflcio.org/publ/speech99/sp1119.htm

The Wishful Thinking of Human Rights Watch

Sharing the Administration's and the media's euphoria, the New York-based Human Rights Watch promptly welcomed the U.S.-China agreement as "good for trade but also for human rights and the rule of law." Furthermore, according to Human Rights Watch:

"Over the long term, China's membership in the WTO could increase pressure for greater openness, more press freedom, enhanced rights for workers, and an independent judiciary." (See November 15 press statement at http://www.hrw.org/press/1999/nov/china1115.htm.)
Endorsements of such warmth and expectations of such breadth deserve to be grounded in some kind of evidence. Unfortunately Human Rights Watch, widely respected for relying on facts, does not provide any.

Let's analyze the evidence from among countries that are members of the WTO and its predecessor organization, the General Agreement on Tariffs and Trade (GATT). In which ones has WTO/GATT membership contributed to the countries' progress, or lack of progress, in human rights and the rule of law?  In which ones has that membership helped create "greater openness, more press freedom, enhanced rights for workers, and an independent judiciary"?

Taiwan? Certainly it has made great progress in both trade and human rights in recent decades. But Taiwan is not a WTO member, and (because of mainland China's objection) is not allowed even into the ranks of the WTO's 37 "observer governments." So point one: if it is so inclined, a country can make remarkable progress in trade and human rights without the advantages of WTO membership.

Scanning the WTO/GATT Record in 134 Member Countries

Next, look down the ranks of the 134 WTO members listed on the WTO Website at http://www.wto.org/wto/about/organsn6.htm and also of the 128 "contracting parties to GATT" at http://www.wto.org/wto/about/gattmem.htm.  Try to identify countries on those lists that have found WTO/GATT membership, over the long or short term, conducive to human rights and the rule of law, press freedom, worker rights, and an independent judiciary.

Burma?  Pakistan? Singapore? Congo? Cuba? They are, all of them, long-term WTO/GATT members, veterans that illustrate point two: that WTO membership is not --repeat not--some magic formula for making converts to human rights and the rule of law.

Someone, please help: select some other countries on the WTO/GATT lists and check out their human rights history as summarized in the State Department human rights report (http://www.state.gov/www/global/human_rights/hrp_reports_mainhp.html) or in some other reliable source, such as the Human Rights Watch's own annual report (http://www.hrw.org/worldreport99/).

WTO/GATT membership must have helped advance human rights and the rule of law somewhere, but where?

Pinning Hopes on a Chinese Gorbachev

"If Everybody Bought One Shoe: American Capitalism in Communist China" is the title of a book published in 1989. Its author, Graeme Browning, described how foreign businessmen were dazzled by the potential of China's consumer market:

"China has a population of more than one billion people. Western businesses look at those raw numbers and begin to dream wild dreams. Imagine selling a billion bottles of aspirin, a billion cans of deodorant, a billion boxes of detergents! Wags have taken this argument to the extreme: Two billion feet? Think how much money we'd make if everybody bought one shoe!"
Now, ten years later, despite the disillusionment suffered by some U.S. corporations in the interim, China's huge market potential continues to dazzle. After all, China now has 1.3 billion people. Imagine selling l.3 billion pairs of sneakers!  Avarice, individual and collective, goes a long way towards explaining the anxious corporate collaboration with a regime still dedicated to Socialism. But it does not fully explain the U.S. government's whole-hearted "engagement" in that partnership.

Strategic thinking still plays some part in shaping U.S. foreign policy, and in the case of China it pins a great deal of hope on one man: Premier Zhu Rongji, who took office in March 1998, widely hailed in the U.S. media and governmental circles as a crusading reformer. Some have even imagined him as "China's savior," someone who could play the role that Mikhail Gorbachev did in weakening the Communist Party in the Soviet Union. In that light, the U.S.-China WTO deal is seen (by the New York Times, for example) not only as being "a major victory" for Zhu but as strengthening his hand in opening up China's economic system and, by implication, its political system too.

Here some sober thought is in order, and for that we are indebted to the Economist of London. In an editorial written before the November 15 agreement, the Economist provided a cautionary note, which is worth quoting in full:

"It will be well...to remember the ways in which Mr. Zhu, in many ways an admirable man, is not different from his colleagues. He does not believe in free choice and unfettered markets. He does not believe in the privatization of the biggest 'strategic' enterprises--a policy state newspapers say would be 'suicidal' for the economy and the Party--but pins his faith, like the other social engineers who run China, in 'scientific management' to reform a dominant state sector.

"He does not believe, as far as is known, that the crackdown on the Falun Gong is too harsh. He does not believe that Taiwan has the right to determine its own future.  He is, in other words, a product of the Communist bureaucracy, albeit an original one for being decisive. But if you believe that China's root problems lie with the Communist Party itself, and with its primary goal of staying in power, then Zhu Rongji will never be your man."

My comment: China's entry into the WTO, if successfully engineered by Zhu on the Chinese side, will guarantee China further access to international markets, Western credits and investment, and modern technology, and thereby reinforce the Party's primary goal of staying in power. 

Dollars for Dictators--Billions Now, More to Come

More and more U.S. trade and investment dollars are flowing to the authoritarian countries of the developing world and away from those that are democratic. That is the alarming trend disclosed in a report titled "Dollars and Democracy, the Post-Cold War Decline in Developing Democracies' Share of Trade and Investment Markets."

The report, issued by the New Economy Information Service (NEIS), reveals that democratic countries' share of developing country exports to the U.S. (excluding oil) fell from 53.4% in 1989 to 34.9% in 1998.

"It is ironic that although the triumph of democracy ten years ago helped trigger the global economic boom, the developing democracies have benefited least from trade and investment," said David Jessup, NEIS executive director. "If the trend continues, foreign purchasing and investment decisions by U.S. corporations may inadvertently undermine the chances for survival of fragile democracies."

The People's Republic of China benefited greatly from this shift, more so than any other country except Mexico, according to the NEIS analysis. In 1998 the United States paid $69 billion to China for imports of manufactured goods, an increase of more than 600% over 1989. As result, China' market share of goods imported into the United States from all developing countries was 21.5% in 1998, compared with 10.5% in 1989.

(The latest data: During the first nine months of 1999, the United States imported $59 billion in goods from China, $8.2 billion  in September alone, mostly in toys, games, and sporting goods.)
The New Economy Information Service is a non-profit organization which explores the effects of rapid economic change on working life, families, and communities. See its Website at http://www.newecon.org/D-Dpress.html for its "Dollars and Democracy" report.  The NEIS Website is highly informative on a wide range of social and economic issues, including the WTO, with impressive documentation and links to original sources. 

Happy Birthday, ICFTU, And More Power to You!

There's a time to celebrate, and a time to agitate. Trade union leaders from all five continents will make time for both in Seattle later this month and early next:

To strengthen its case to the WTO, the ICFTU staff in Brussels has just issued a 90-page study titled "Building Workers' Human Rights into the Global Trading System."  It warns that, without enforceable global rules on worker rights, "the labor market in the global economy will become nothing more than a vast shopping mall for transnational corporations, with countries forced to cut their costs to bargain-basement levels." The text is available on the ICFTU Website at http://www.icftu.org.

You'll also find there background material about the ICFTU's eventful half century--and why its many achievements, past and present, are cause for celebration by everyone, union member or not. The AFL-CIO is honoring the ICFTU with the 1999 George Meany/Lane Kirkland Human Rights Award.

Human Rights for Workers: Bulletin No. IV-21, November 19, 1999
Robert A. Senser, editor
Copyright 1999
hrfw@senser.com. (Send e-mail)

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