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Vol. 73/No. 12      March 30, 2009

 
Capitalist crisis sparks
protectionist measures
(front page)
 
BY BRIAN WILLIAMS  
With world trade in its biggest decline in 80 years, protectionist measures by Washington and other imperialist powers are on the rise.

President Barack Obama's administration is conducting a review of "free trade" agreements former president George Bush had negotiated with the governments of South Korea, Colombia, and Panama, said Ron Kirk, Obama's U.S. trade representative.

The move reflects the growing protectionist course being taken by Washington as competition sharpens among the imperialist powers for control over raw materials, markets, and cheap labor sources. Protectionist policies can lead to trade wars and are counter to workers' interests.

In mid-February Obama signed into law the $787 billion "stimulus plan." It contains "Buy American" provisions requiring that these funds go toward purchasing U.S.-made products.

Soon after, Congress passed a $410 billion spending bill that among other things eliminates a pilot program allowing Mexican truck drivers to cross the border to deliver goods. Responding to defend its markets, the Mexican government announced March 16 that it would place tariffs on $2.4 billion worth of U.S. exports, covering 90 U.S. industrial and agricultural products.

The North American Free Trade Agreement (NAFTA), signed by the U.S., Mexican, and Canadian governments in 1993, gave Mexican truckers access to border states in 1995 and nationwide in 2000. Washington has refused to implement this provision.

The trade agreements with South Korea, Colombia, and Panama, which Congress has not yet approved, eliminate tariffs, allowing U.S. companies greater ability to sell their goods at prices local industries and farmers in these semicolonial countries cannot match. But with the deepening economic crisis, some of these pacts no longer seem advantageous to the U.S. capitalist rulers.

One example is the U.S.-Korea Free Trade Agreement, which could be the biggest such trade agreement Washington has undertaken since NAFTA, reports Business Week. Under this pact South Korea's 8 percent tariff on all U.S. vehicles would be removed. Washington would phase out over 10 years a 25 percent U.S. tariff on pickup trucks and end its 2.5 percent import tax for smaller Korean cars.

Last year Korean auto companies, including Hyundai and Kia, sold 700,000 cars in the United States while GM, Ford, and Chrysler sold only about 7,000 vehicles in Korea. About 90 percent of car imports into South Korea are from European and Japanese competitors.

This "just simply isn't fair," said Kirk at his Senate confirmation hearing March 9, adding that Washington was "prepared to step away" from the U.S-Korea trade deal.

Since 2004 Washington has banned the import of Chinese poultry products despite an agreement that year for both countries to resume trade after it was briefly suspended following an outbreak of bird flu. Over the same time the U.S. rulers greatly expanded their poultry exports to China, up to nearly 4 million tons. This accounts for more than 75 percent of China's total poultry imports, according to China Daily.

A provision in the recently passed $410 billion federal spending bill extends this U.S. trade ban by blocking any of these funds from being used to import poultry products from China.

Trade conflicts between Washington and governments within the European Union are also heating up. In response to the EU's ban on importing U.S. beef containing hormones, the U.S. government in January imposed 100 percent tariffs to take effect in April on 45 food products made in Europe. The tariff for Roquefort cheese is raised to 300 percent. The EU announced March 12 that it is imposing steep duties on biodiesel fuel imported from the United States.  
 
 
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