Atelier No.15, article 22

Laura Flanders
Working for, March 7, 2002

               Unfair Trade U.S.-Led Global Economic Policies are Behind U.S. Steel's Crisis

               George W. Bush's decision to impose taxes of up to 30 percent on most imported
               steel could spark a trade war with major European and Asian trading partners and
               push consumer prices up, we're told. It also could -- and should -- spark a
               much-needed national conversation about globalization and so-called "free trade."

               Steel unions have been demanding a policy change in Washington for years. In the
               last few months, they pulled out all the stops. Last December, members of the United
               Steelworkers of America (USWA) camped out in the capital while workers and their
               families lobbied their representatives. At the end of February, USWA was joined by
               the Independent Steelworkers Union in sending workers from 12 states on hundreds
               of buses, vans and planes back to D.C. to publicly raise their voices again, even as
               hotlines set up in union halls around the country allowed members back home to call
               the White House.

               What were the steelworkers demanding? A 40 percent tariff on imported steel.
               Thirty-one steel companies are currently in bankruptcy, threatened by cheap imports.
               Before Bush's decision came down, some 600,000 steel workers stood to lose their
               jobs and their health benefits for good. Presumably, a 30 percent tariff is almost what
               the unions asked for. But is it the extent of what they need or want?

               Critics of tariffs will argue forever that the problems facing U.S. steel are intractable, a
               product of bad management and authorless "global trends." Sure, there's has been
               some bad management at some companies, but the rotten roots of the current crisis
               reach way deeper -- in federal policies at home and abroad.

               On Feb. 13, Leo Gerard, international president of the USWA, called on the
               government to break the "cycle of predatory practices employed by our trading
               partners to undermine America's steel." The American steel industry "has been
               devastated by unfair trade," said Gerard in testimony to the Senate Finance
               Committee this February. (

               The unfair trade he's talking about is the so-called "free trade" system that
               U.S.-dominated international financial organizations have forced upon the world. IMF
               loans that come at the price of debt and austerity programs depress global prices by
               pushing borrower-countries to produce cheap exports. "Free trade" policies like those
               brought us the "Asian Flu" -- an economic collapse which hit Indonesia, Thailand,
               Korea and the Philippines in the late 1990s, and spread to Russia and Brazil -- and
               caused a crash in the demand for steel, as manic building booms slowed. Much of
               the surplus then flooded into the U.S. market, a price depressant compounded by a
               super-strong -- many would say overvalued -- U.S. dollar. The "strong" dollar
               effectively subsidizes foreign imports relative to domestically produced steel.

               "The Asian Financial Crisis, the collapse of the Russian economy, and the resulting
               flood of steel imports can all be attributed to the forces of free trade and
               globalization," says steel-state Democrat, Dennis Kucinich. The same WTO
               regulations which foster a race to the bottom in wages internationally make it difficult
               for the United States to protect its industries -- even when, as Kucinich points out,
               U.S. trade laws exist that could facilitate just that.

               "Free Trade" is a kind of protectionism, after all. U.S. trade negotiators have
               persistently traded off the interests of workers and those who produce in the United
               States in favor of investors, and those who want to outsource U.S. production to take
               advantage of cheap labor elsewhere.

               "Despite the label 'free trade,' the agreements have been mostly concerned with
               internationalizing the rights of U.S. investors to override national and local regulations,
               particularly those that protect labor rights, human rights, and the environment," says
               Jeff Faux of the Economic Policy Institute. Faux told the World Social Forum in Brazil
               what a retired U.S. State Department official told him: "What you don't understand,"
               said the official, "Is that when we negotiate economic agreements with these poorer
               countries, we are negotiating with people from the same class. That is people whose
               interests are like ours -- on the side of capital."

               US influence over global policy protects some folks, just not workers. And then
               there's the policy choice Washington continues to make in favor of
               employment-based health coverage. That hurts workers and employers, both. Nearly
               every other industrialized country has guaranteed national health insurance paid for
               by tax revenue. In the United States, steel companies have to bear the costs not only
               of current workers, but of retirees who've put in a life's work. There are about 150,000
               active workers compared to around 600,000 retiree families. In his decision on tariffs,
               Bush rejected the industry's request for a government bailout to pay coverage and
               pension costs.

               Bush wants to give little and get much. The White House is counting on steelworkers
               to vote "thanks for tariffs" this November -- and again in 2004. Bush's lead was narrow
               or nonexistent last time in key, steel-heavy states, including Ohio, West Virginia,
               Michigan, New York, Pennsylvania, as well as in Florida, where the largest proportion
               of steel workers go to retire.

               But if a probably short-lived trade tariff is all that comes of this hard-fought struggle,
               steelworkers have little to be grateful for. What's needed is a reassessment of what
               and who sets the terms of trade itself, and of U.S. policy decisions that should have
               nothing to do with the WTO.

               That's a bigger fight, and one that will need more of us in the tent city the next time
               the steelworkers decide to camp out.

               Journalist Laura Flanders is the host of Working Assets Radio and author of Real
               Majority, Media Minority: The Cost of Sidelining Women in Reporting. Her Spin
               Doctor Laura columns appear daily on WorkingForChange. You can contact her at

                               Copyright 2002