From: Hank Roth <pnews@igc.apc.org>
Subject: Tit for GATT
Followup-To: alt.activism.d
Originator: rich@pencil.cs.missouri.edu
Organization: ?
Date: Tue, 29 Dec 1992 06:36:23 GMT

<<< via P_news/p.news >>>
{From LIVING MARXISM, December 1992}
TIT-FOR-GATT
by Sharon Clarke
 
[The row between the European Community anhd America over trade 
is a dangerous sign of the times, says Sharon Clarke]
 
TRADE WAR BETWEEN AMERICA AND EUROPE? 
But that is all supposed to be a thing of the past.
Trade wars belong in the 1930s, don't they? They're all mixed up 
with protectionist blocs, imperialism, and the road to a shooting 
war itself. Surely those times are not coming back?
 
Then again, as it suggests at the start of the Manifesto Against 
Militarism, `what was unthinkable yesterday seems to happen quite 
often today'. The Great Depression was also supposed to be sealed 
up in the thirties vault as an historical artefact. The Western 
world was meant to have entered an indefinite age of prosperity. 
Yet now we are enduring a capitalist slump at least as serious 
as the one of 60 years ago.
 
The threat of a trade war between the USA and the EC followed the 
breakdown of the latest round of talks about the General 
AGreement on Tariffs and Trade (GATT). The problem has been 
ascribed to various causes.
 
MORE THAN DELORS
 
Some described it simply as a row over exports of rape-seed oil. 
Many others, includig most of the British press, accused European 
Commission president Jacques Delors of causing the trouble by 
putting the narrow interests of French famrers before broader 
concerns about world trade. But the problem goes much deeper than 
any of this.
 
The return of `trade war' to the language of modern diplomacy is 
the first public expression of what has been an underlying trend 
for some time. It is a trend towards more direct economic 
rivalries and open conflicts among the major capitalist powers. 
The difficulties they have experienced in cobbling together a 
GATT deal, even over matters such as oil seeds, is a sure sign 
that the old arrangements for papering over the cracks and 
keeping these tensions below the surface no longer work very 
well.
 
Many observers have expressed fears that failure to find 
agreement would lead to a multi-billion dollar loss of trade all 
round, and plunge the world into a deep and damaging economic 
slump. This is getting things back to front. The truth is that 
the world economy is already in slump---and that is why the GATT 
talks have run into so much trouble.
 
Exports of goods and services from the seven biggest industrial 
economies currently total around $3000 billion a year. These 
figures represent a real increase of something like three 
quarters over the past decade. That might sound like a symptom of 
healthy economic growth. In fact, it reflects the unhealthy state 
of the leading capitalist economies.
 
SECRET WAR
 
As each country has slipped into recession and then slump at 
home, they have fought harder to compensate by making more profit 
from trading in overseas markets. With the Europeans, Americans 
and Asians all trying to get a bigger piece of world trade, 
tensions have inevitably risen among the major players.
 
For some years, a sort of secret trade war has been fought out, 
as governments take steps to protect their national economies 
against fierce competititon from foreign trade. They have rarely 
imposed old-fashioned tariffs on foreign imports--which deals 
with such things, has survived for so long. Instead, governments 
have sought to boost their nation's trade by subsidising 
exporters, or by using administrative regulations and standards 
to keep imports out---for example, by banning a foreign aircraft 
or foodstuff on `safety' grounds. However these measures are 
justified in public, the real motive is protectionist.
 
A more serious development has been the consolidation of regional 
trading blocs. The moves to form a single market in the EC mark 
the development of a German-led European bloc. Japan is 
encouraging the formation of an informal trade bvloc in Asia. And 
the recent formation of the North American free trade zone (free 
trade inside the zone, protection from the outside) indicates 
that the USA is making similar arrangements. The Americans were 
always the champions of global free trade when they ran the world 
economy; now they too are retreating towards a defensive bloc, 
under pressure of competition from the EC and Japan.
 
CUT-THROAT WORLD
 
Until now, the underlying trends towards trade war have been 
shielded behind formal world-wide agreements such as GATT. The 
recent public rows show that this arrangment is getting seriously 
strained. It is becoming more and more difficult for the rival 
trading powers to keep up the facade that all is well around the 
conference table, when the reality is that they are at each 
other's throats in the slump-hit markets of the world.
 
The governments of the EC, the USA and Japan do not want a trade 
war. They suffered too much in the thirties, and have benefited 
too much from the economic cooperation of the post-1945 era, to 
relish a return to cut-throat competition. That is why the mere 
mention of possible US sanctions against the EC had them running 
around in an effort to cobble some sort of deal together.
 
But whatever paper deals they might be able to do, the real trend 
in world trade is now clear for all to see. And the deeper the 
depression becomes, the more difficutlt it will be for them to 
prevent all of their old arrangments from coming apart.
 
Are we in for a rerun of the thirties? Of course not. Things 
change, and history never repeats itself like an old movie, frame 
for frame. However, the threat of trade war does confirm that we 
are in for a dangerous ndew era of international conflicts, 
global slump and instability. And it's not over oil seeds.
 
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