a new China deal?
Source Dave Anderson
Date 00/04/11/16:52

From national DSA essay by Robert Reich (Secretary of Labor
under Clinton in 1st term) proposing a compromise between Clinton
administration and the labor movement over the admission of China to the
WTO. Below that is a criticism of Reich by Leo Casey...


By ROBERT REICH (from American Prospect)
A New China Deal
The upcoming fight over China trade will test not just the clout of organized
labor but, more specifically, the price labor can extract from big business
as a condition for accepting the deal. And it seems clear that unless the
AFL-CIO goes along with
the White House proposal to grant China full trading privileges on a
permanent basis, the administration won't have the necessary votes. As of
this writing, some two-thirds of House Democrats, mostly taking their cue
from organized labor, are firmly against it. Together with Republicans who
are taking a hard line against China s bellicose foreign policy, that's
enough to sink the deal.

The industrial unions — especially steel, autos, and textiles — are
irrevocably opposed. They're still smarting from the Clinton administration's
North American Free Trade Agreement (NAFTA) and the expanded General
Agreement on Tariffs and Trade (GATT) that led to the creation of the World
Trade Organization, both of which they blame for the continuing erosion of
manufacturing jobs. The rest of organized labor — teachers, state and federal
government workers, service workers — don't much like the China trade deal
but know their own jobs aren't on the line. AFL-CIO President John Sweeney,
however, has pledged to fight it with all the organizing strength of the
newly muscular AFL-CIO, partly to placate the industrial unions and partly
because Sweeney is genuinely concerned about human and labor rights abuses in
China. Demonstrations are scheduled in the home districts of key uncommitted

But Sweeney and the union presidents know that when labor has chosen to fight
the Clinton administration over trade — rather than set a price for
cooperating — it has come up empty handed. It could have demanded something
in return for backing off on its Opposition to NAFTA and then on GATT, but it
chose to go to battle and lost both times. This has been the pattern even
outside the strict confines of trade deals. Labor could have exacted a price
from the administration for its early support of Al Gore for president, but
it chose to endorse him for free (only to have the administration unveil its
China trade agreement soon thereafter).

Labor should set a price for China trade while it still has the votes and
while the other side is eager to move forward. Business is willing to pay
something because it wants unfettered access to China's giant market and is
afraid of what might happen if Gore is elected next November. Bill Clinton is
eager to deal because he wants normal trade relations with China as a
capstone to the administration's otherwise incoherent China policy. Gore
desperately wants to strike a deal as well because he wants the China trade
issue to be resolved well before the nominating Convention, so that labor can
concentrate its energies on his presidential bid. Dick Gephardt, the House
Democratic leader, would like a deal because he doesn't want an ugly
Democratic split over China that might derail the Democrats' quest to control
the House next election day and make him the next speaker.

What's the price? Labor should demand that there be two other items wrapped
in the legislation regularizing China's trade status — a ban on the permanent
replacement of striking workers and a tripling of fines against employers who
illegally fire workers for attempting to organize a union. Then a vote, up or
down, on the whole package. In short, the price for opening the door to more
trade with one-sixth of the world's population (the vast majority of whom
would eagerly work for a fraction of the American wage) is more power for
blue-collar workers in America and a redemption of the Wagner Act's promise
that American workers can freely choose collective representation without
having to fear for their jobs.

Any economist will tell you that free trade is good for Americans, overall.
We get access to cheaper labor-intensive goods from abroad and bigger markets
for our knowledge-intensive exports. But free trade also causes some
Americans to lose their jobs or a portion of their incomes. And even though
the benefits of trade are greater than these burdens, benefits and burdens
aren't distributed equally. It's this distributional aspect of trade that's
rarely talked about but causes most of the political problems.

Economists will also tell you that public policies are justifiable when those
who benefit from them could fully compensate the losers and still come out
ahead of where they were before — which is why free trade is a no-brainer.
But the political reality is that the winners from free trade don't
compensate the losers. Yes, Congress typically enacts small job-retraining
programs along with trade agreements so the losers can find new work. But the
programs are too tiny to have any real effect.

The price that labor should be demanding for going along with the China trade
deal makes sense in these terms. There's no guarantee against job loss, of
course; American factory jobs will Continue to be on the firing line of
globalization as well as technological change. But strengthening the
bargaining clout of labor by preventing employers from permanently replacing
striking workers, and deterring employers from firing union organizers, can
help spread the gains from trade. Stronger unions would give blue-collar
workers the ability to summon higher wages and, when job loss was inevitable,
more generous severance payments. Labor law reform would also give unions a
fairer shot at organizing the new jobs of the globalized service economy.

Will labor set this price rather than go to battle over China trade? Would
big business be willing to pay this price? All I know is there's a deal
waiting to be done and a lot of powerful people with a strong stake in doing
it. It's worth a try.


(Then Leo Casey's comments....)

This type of argument -- and not 'smash WTO' -- is serious political
discourse worthy of serious consideration. I am not sure where I come down on
Reich's proposal. My reservations are the following:
1. As tantalizing as the two pro-labor measures are, I am not convinced --
and Reich has his own reservations -- that big business would be prepared to
make this deal, much less stick to it.
2. Like Sweeny, I am unconvinced that China's entry into the WTO will mean
anything good for China's people, either in terms of human rights and labor
rights or in terms of democracy. It could give a further, big boost in the
arm to this Asian model of economic development -- unfettered laissez-faire
capitalism combined with an authoritarian state.

But this having been said, I still think Reich makes some very telling
points, and his solution is quite tantalizing.

Leo Casey
United Federation of Teachers
260 Park Avenue South
New York, New York 10010-7272 (212-598-6869)

Power concedes nothing without a demand.
It never has, and it never will.
If there is no struggle, there is no progress.
Those who profess to favor freedom, and yet deprecate agitation are men who
want crops without plowing the ground. They want rain without thunder and
lightening. They want the ocean without the awful roar of its waters.
-- Frederick Douglass --

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