NAFTA, APEC and monopoly 'free trade'

By Sam Marcy (Dec. 2, 1993)

The current struggle in the United States over free trade can perhaps be better understood when seen in the perspective of the Civil War. At that time, the South was solidly in favor of free trade. The North was even more in favor of protectionism.

The South needed cheap manufactured commodities of all sorts. It could get them from Europe at cheaper prices than it could from Northern manufacturers.

U.S. industry was then in its infancy. British manufacturing was galloping ahead and its goods could be sold in the U.S. at cheaper prices. It was therefore only natural that the North would put up a struggle for protection of its industries. The South was equally concerned at getting manufactured goods at lower prices from abroad.

A great deal of the political struggle that preceded the Civil War rotated around these issues.

Now, more than 130 years later, the Clinton administration is trying to use the strategy that the South used in relation to the North. It is trying to break down protectionism in relation to the less developed countries, and in particular to the countries of the Pacific Rim.

If we reduce what appears to be a very complex struggle among the U.S., Japan, China and the Pacific Rim countries to its lowest common denominator, the issue is still the same, except that the U.S. is now trying to palm off its excess capitalist production on many of the smaller, dependent countries, often the most oppressed.

In the very early days of the United States, tariffs and duties were imposed primarily to raise revenue to finance the government's expenditures, which aided the infant industries of the U.S. Later, however, these same practices were directed at holding back a flood of cheap manufactured goods from abroad that otherwise would have undermined the progressive growth of U.S. industry.

In the epoch of monopoly capitalism, all of these devices are calculated to bolster monopoly superprofits and envenom national strife. They play a regressive role.

In the present era, the Clinton administration is using a variety of stratagems to bolster its economic position in the world, but also with a view towards its strategic military hegemony. This latter point must not be forgotten.

The passing of the NAFTA agreement by the House of Representatives and the just-concluded conference in Seattle of 15 so-called Pacific-Rim countries are being ballyhooed as great advances for free trade.

But aren't they really a form of protectionism? Both events exclude so many other countries. They're not open to everyone on a global scale. What's free about them?

The NAFTA agreement among the U.S., Canada, and Mexico excludes almost all of Latin America — particularly Cuba, the target of more than 30 years of U.S. economic blockade.

Exclusion, not inclusion

The principal aim of both these U.S. efforts is not to include others but to exclude its imperialist rivals, especially the Europeans. The European Community, of course, has its own free trade bloc, whose aim is to keep the U.S. and Japan out. Japan, on the other hand, has no visible bloc of supporters in Asia other than those gathered together by Washington, which itself claims the whole Pacific Rim.

The conference in Seattle of Asia-Pacific Economic Cooperation produced a vast avalanche of publicity. What was the objective of this APEC conference so far as the U.S. is concerned? It was to create a bloc with these east Asian countries, a powerful "economic community" whose total productive capacity would rival even the European Community.

And — should it surprise us? — the leader of such a bloc of Asian countries must be none other than the U.S.

As an Asian entity, the bloc of course includes China and Japan. But for undisclosed reasons, it does not include Russia, the most formidable economic entity remaining from the former USSR. Is this because the Yeltsin government is not interested in it or prepared to participate? But Russia represents a huge chunk of the world economy. It indicates that Russia is in a deep economic crisis and is therefore not capable of participating under present conditions.

What's the real problem?

As was repeated over and over again, the APEC bloc can be goaded into becoming a premier industrial giant.

The all-important objective of the conference is to create an area that will be an even greater source of capitalist production. Clinton stresses that this new bloc will spur growth.

But production is not the problem.

Capitalism's most important progressive aspect has always been that it can stimulate rapid growth. Clinton is talking as though there's something wrong with these nations and they can't produce. That's not so. Even back at the time of the Communist Manifesto (1848), Marx wrote that "The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together."

The big problem under capitalism is the realization of profit within the framework of capitalist production.

Neither Clinton nor any of the others address themselves to this basic problem. Rather, they try to hide it while pointing the finger in other directions.

In the eyes of capitalist economists, the principal barriers to production are high tariffs, import duties, taxes and the like. But these are merely superficial evidences of a deeper malady: the contradiction between the private ownership of the means of production, which is in the hands of a small minority who appropriate the products of labor, and the social character of production, which is carried out by the vast majority. The workers produce everything.

The biggest barrier to production, Marx explained, is not import duties, taxes, tariffs and the like, although they may slow down or accelerate the circulation of capital here or there. It is capitalism itself, because capitalist production leads to overproduction and crisis.

In the struggle of capitalism against the feudal system, however, the abolition of tariffs and taxes played a most significant role in developing capitalist production. This was especially important when goods had to pass through several provinces and feudal duchies, each with the right of taxation in their territory.

Who was there and who wasn't

If Japan truly becomes integrated into this Asia-Pacific bloc, its objective will be entirely at odds with that of the so-called five tigers: Taiwan, south Korea, Singapore, Hong Kong and Malaysia. Japan, no less than the U.S., wants them to remain as sources of superprofit. Unless that is available, their productive capacity is useless to Japan or any other imperialist power.

Japan's presence in this group is in crying contradiction to the objective of these smaller countries.

The question of Korea loomed large at the conference, even though the Democratic Peoples Republic of Korea was excluded. No one can avoid the constant drumbeat in the media identifying the DPRK as an area of possible attack by the U.S. In the absence of such an attack, what Washington really is concerned with is whether it can open up north Korea for the extraction of imperialist superprofits. The DPRK is under siege, much as Cuba has been.

Why was China in this conference? After all, it is still a workers' state, based on the ownership of the means of production by the Chinese government.

China was there not so much because it wants to be a part of this great productive community. The real objective of China is to thwart Japan and the U.S. from dominating all of Asia, and particularly this group of countries.

The U.S. objective is to get a firm and incontestable foothold in that part of Asia, something it has not fully achieved as yet. Once that is obtained, it can strike out anywhere in Asia. All the more, therefore, is Japan opposed to the establishment of this U.S.-dominated bloc from one point of view, while China is against it from another point of view.

It is not at all clear that the U.S. objective of welding them into a solid bloc is possible, in view of the centrifugal forces within the grouping.

Nevertheless, it appears that the U.S. has engaged in a tremendous public relations project and presented Clinton in his most presidential aspect. The press forgot all the pejoratives hurled at him early in his administration, so that during the conference he looked like a veritable Caesar of the Pacific. But now that the conference is ended, it appears he may be nothing but a sawdust Caesar. The centrifugal forces are far too significant and a great deal of the talk coming out of the conference is nothing but hyperbole.

Clinton's attack on New Deal

Such a vast and significant move toward expanding U.S. imperialist domination requires a monumental effort to reorganize the political relationships between capital and labor within the U.S. This is what Clinton has set himself out to do. The domination of Asia of necessity requires a herculean effort to reorganize the domestic economy and readdress the relationship between capital and labor. Clinton minced no words on exactly what he had in mind, and it's astonishing that the capitalist press has said so little about it.

We have only seen one article (New York Times, Nov. 20) summarizing what Clinton told the Asia-Pacific Economic Cooperation conference about what was going to be required of U.S. workers in the present world reality. He spoke of "fewer and fewer people [producing] more and more goods," and said that to find more customers for these goods, "There is no alternative. We must compete."

"He seemed to suggest," wrote the Times reporter, "that to get the free trade agreement passed he had to dismantle the New Deal coalition of labor, minorities and big city Democrats, and replace it with a new coalition of high-tech workers from the Northwest and the South and big and small business. And now, to deal with unemployment, he indicated that he would have to dismantle the New Deal approach to that problem as well."

The "New Deal approach" to joblessness was unemployment insurance, instead of the destitution that had existed earlier.

So Clinton is talking about opening up an assault on jobless workers at a time when the economic situation in the U.S. can only be characterized as one of an incipient depression. Whatever the stock market may be doing, there is no capitalist boom. Factories are still being closed down, auto production (to give just one example) is still declining, and the official statistics show poverty has become ingrained in almost a third of the work force.

Whatever the Clinton administration may be trying to generate in Asia, it's another world from what is happening in the industrial heartland of the U.S., or in California, or in Europe, for that matter.

The most important question is the position of the U.S. and Japanese trade unions. Will they be passive spectators at a time when the capitalists of both Japan and the U.S. are intensifying their exploitation of the workers? Nine-tenths of all these agreements consist of measures to intensify the labor process and raise the productivity of labor by reducing the work force.

It is up to the working class and oppressed peoples to thwart this objective and devise an internationalist program to combat Clinton's anti-labor approach.

Last updated: 15 January 2018