A Step Backward
By Robert Borosage
February 29, 2000
The slow-motion train wreck that will mark this congressional year was set in motion this month when President Clinton promised the Business Council "a full-court press" to get Congress to give China permanent most-favored-nation trading status, even as the AFL-CIO began running ads depicting China's human rights abuses.
The vote to waive the annual review of China's trade status, part of the deal to bring China into the World Trade Organization (WTO), is a politician's nightmare. Legislators in both parties must choose between their donors and their voters. A recent poll by Peter Hart Associates for the AFL-CIO shows that 75 percent of Republicans oppose ending the annual review, but the fight poses more perils for the president's party.
A Democratic president lining up with the business lobby to bring China into the WTO symbolizes a money-drenched political system that tramples the concerns of working people. In the contested states of the industrial Midwest, the fight could dismay the very union activists whose enthusiasm is vital to turning out voters. Any Democrat with a memory is haunted by the brutal 1994 battle over the NAFTA accord, which preceded the election in which Democrats lost the House for the first time in 40 years, as working people stayed home in large numbers.
But the clash over China is important not because of its short-term political fallout, but because it represents a struggle with historic stakes. Contrary to the conventional wisdom, the opponents of the deal--led by the unlikely "Seattle coalition" of unions, environmentalists, consumers and church groups--represent the cutting edge of a reform movement vital to the global economy.
The White House defends the China deal on commercial and national security grounds. The president says it will require China "to open its markets." But look at the other deals with China, Japan and the NAFTA nations where the same promise was made. The results are unblemished by success, and the U.S. trade deficit is at record levels. Alternatively, the president argues that the choice is to engage China or isolate it. But trade and investment with China will grow even without the deal.
The question isn't whether to engage China; it is about the terms of that engagement. And there is the rub. The China deal is the extreme expression of the conservative, laissez-faire "Washington consensus" of the past quarter-century that holds that free markets lead to development and democracy. But that view is belied by a global economy ravaged by speculative booms and busts, with glaring inequality within and between countries, where the largest companies in the world contract work to factories in countries where organizing a union can mean a death sentence.
In reality, markets produce change, not necessarily development. Democracies--which embed the market in law, cushion its destructiveness and empower workers to spread its benefits--are better able to sustain the disruptions markets create. Freedom, argues Nobel economist Amartya Sen, is not the end but the means of development. Empowering workers, argues World Bank economist Joseph Stiglitz, is the key to sustaining democratic economic development.
Markets without law produce Russia's gangster capitalism. Markets without democracy produce Indonesia's chaos. In essence, the reformers are calling the global economy to account, demanding that its rules enforce core worker rights and environmental protections. But if China joins the WTO on the terms of the administration's deal, any chance for such reforms will be closed off. President Clinton, of course, famously supports building labor rights and environmental protections into the WTO.
Yet, like Saint Augustine, who prayed to be saved from sin, but not yet, the president is for democratizing the global economy, but not yet. First he wants to push a China deal that turns its back on the future that he invokes. The hope for the future is left to his opponents.
The writer is co-director of the Campaign for America's Future.
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