The Militant (logo) 
   Vol.66/23            June 10, 2002 
 
 
Trade conflicts rise around U.S.
farm subsidies, steel tariffs
 
BY JACK WILLEY  
U.S. treasury secretary Paul O’Neill has confronted anger and opposition to the farm bill recently adopted by Congress at every stop of his two-week tour through Africa as a predatory trade assault on the semicolonial countries across the continent.

Washington’s imperialist rivals have also responded to the bill, as well as other protectionist measures aimed at defending U.S. capital against foreign competition, with formal complaints to the World Trade Organization (WTO) and threats of retaliatory measures.

The U.S. farm bill allocates $180 billion over the next 10 years, primarily to capitalist farmers and corporations. The bill’s aim is to reinforce the ability of a handful of agricultural monopolies to export food and fiber on the world market by undercutting competitors around the world.

"It is a terrible move that will hurt the whole of Africa," said Zambia National Farmers Union president Ajay Vashee. "Zambian farmers will be forced to produce goods at uncompetitive prices because the U.S. will be able to dump cheaper agricultural produce on the market."

"It is strange that Mr. O’Neill is in Africa talking about debt relief, giving with one hand and taking with the other," one South African senior official said.

Non-governmental organizations in Ghana told O’Neill they opposed the bill. They gave the example of how the country’s domestic rice industry was crushed when their own subsidies were removed under pressure from the IMF and World Bank, two imperialist financial institutions dominated by Washington. The country was subsequently flooded by cheap subsidized imports of U.S. rice, wiping out local growers.

The impact of such policies on a broader scale can be seen in reports issued by Oxfam International, which indicate sub-Saharan Africa’s share of world trade has fallen to 1.3 percent, just one-third of its level two decades ago.

African government officials expressed frustration with the free-trade/protective tariffs shell game played by Washington. The U.S. rulers, as in every imperialist country, have used "free trade" agreements to pry open markets in other countries to sell goods from U.S. manufacturers. They in turn have used tariffs to try to protect the profits of U.S. big business from being undercut by cheaper foreign goods. Subsidies benefit steel barons, agribusiness, and others in both domestic and foreign markets.

The governments of Brazil and China, as well as Washington’s imperialist rivals in Europe and Canada, have also spoken against the farm bill.  
 
Washington stands firm on steel tariffs
In spite of mounting pressure from its imperialist rivals and attempts to use the WTO to punish Washington, the U.S. rulers have moved forward with tariffs of up to 30 percent against steel imports.

In what the Financial Times of London called an "unprecedented" disapproval of U.S. taxes on steel imports and the farm bill, the managing director of the International Monetary Fund, director general of the World Trade Organization, and president of the World Bank issued a joint statement calling "any increase in protectionism... damaging."

On May 16, the governments of Japan, Norway, and South Korea joined European Union countries in calling for a WTO panel to rule on the "legality" of the U.S. levies. Brazil, China, New Zealand, Norway, and Switzerland have filed formal WTO claims. Days later Washington blocked the establishment of a panel until June 3. According to the WTO’s regulations, U.S. officials can stretch out the proceedings for another year and a half.

European Union governments responded to Washington’s stalling tactics with duties on U.S. exports that will take effect in June. Some $345 million in steel, textiles, and fruit are targeted. European Union-member countries and Japan plan to impose tariffs worth $364 million and $5 million respectively on a smaller list of U.S. goods. If the WTO panel rules against the United States next year, the EU will target a larger list of goods.

On May 22, the Chinese government imposed import tariffs of 7 percent to 26 percent on nine categories of steel after certain quotas are exceeded. Chinese trade officials said the move was unavoidable given Washington’s "provocation," claiming domestic steel companies have already lost some $1.2 billion in revenue since the U.S. levies were set. Big business in Japan and South Korea, which are major exporters of steel to China, have taken issue with Beijing’s steel tariffs.

Malaysia imposed its own 50 percent steel tariff in response to Washington in order to protect its domestic market from American steel trusts. Last November, the semicolonial governments in Egypt, India, and Pakistan complained that protective tariffs by the wealthy powers severely restricted exports of their products.  
 
Lumber fight with Canada continues
Living up to its promise in April, the U.S. International Trade Commission has imposed a 27 percent tax on imported Canadian wood. The U.S. Coalition for Fair Lumber Imports, a pressure group of the superrich lumber producers, claim the Canadian government charges lumber companies artificially low prices to cut wood on public land. The lumber coalition’s main demand is that the Canadian government charge the same as Washington to cut on public land or face indefinite tariffs. The Canadian government is appealing the tariff to the WTO and NAFTA.

Meanwhile, the tuna industry in the Philippines faced a one-two punch by the rulers in the United States and EU-member states. Canned tuna from the Philippines was slapped with a 24 percent tariff, while former European colonies in Africa, the Caribbean, and the Pacific are levy-free.

Under NAFTA, duties on canned tuna imported into the United States from Mexico will be lifted by 2008. Earlier this year, the House of Representatives voted to immediately lift tariffs on several goods, including tuna, from Ecuador and Colombia. However, tuna from the Philippines is subject to a 35 percent duty.
 
 
Related article:
A harsh lesson in Argentina
The capitalist nightmare unfolding in Latin America  
 
 
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