The New Protectionism: Global Trade Rules Protect Corporations. Let Nations Protect Their People

By Hines, Colin; Lang, Tim | The Nation, July 15, 1996 | Go to article overview
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The New Protectionism: Global Trade Rules Protect Corporations. Let Nations Protect Their People


Hines, Colin, Lang, Tim, The Nation


"Protectionism" has received an undeserved bad name of late, thanks mainly to the steady barrage of propaganda leveled by the master builders and profiteers of the global economy--the transnational corporations, or T.N.C.S. They charge that any attempt to preserve regional or community values, traditional economies, local jobs or natural resources is an assault on the higher cause of globalism. But the global economy is itself a vast protectionist scheme used by T.N.C.s and banks to expand their own power, unfettered by the inconvenient checks of democracy. It's time to take back the term protectionism from the corporations and restore it to the people.

What we call the New Protectionism aims to regenerate interest in the preservation of communities, economies and livelihoods. It would foster a return to the security provided by local self-sufficiency based on local economic control and local production for local consumption and protected by a modern trade philosophy that does not close the door on all trade but restricts unnecessary international trade and other harmful activities.

As working people all over the world have become acutely aware, the need to halt the lockstep march of globalism is urgent. The rapid replacement of secure jobs by short-term contracts, part-time or lower-paid work or technological unemployment sharply accelerates a spreading sense of insecurity, while lowering overall effective purchasing power, a prescription for eventual global economic disaster. In 1995 the International Labor Organization announced that one-third of the world's willing-to-work population was either unemployed or underemployed, the worst situation since the thirties.

Globalization unquestionably leads to lower-wage economies. The British economist Adrian Wood has calculated a not insignificant shift of 9 million jobs from North to South in recent years. It is not hard to understand why. In 1993 manufacturing labor costs in West Germany were the equivalent of 24.9 U.S. dollars per hour; in Japan, S16.9; in the United States, $16.4; and in Britain, $12.4. But in South Korea labor costs were $4.9 per hour; Hungary, $1.8; and China, 50 cents! This is why European companies like the Italian sportswear- and shoe-manufacturer Fila have, as a commentator put it, "found one way of coping with a fundamental problem of European manufacturing. It is trying not to have any." Meanwhile, Britain is advertising itself as a low-wage country to attract industry. The trend is clear.

In France a parliamentary finance committee concluded that much of the nation's present unemployment is the direct result of the shift of factories to Third World countries. A 1993 survey of 10,000 large and medium-sized West German companies found that one in three intend to transfer part of their production to Eastern Europe or Asia, because of lower wages and more lenient environmental standards. Even high-tech jobs are not immune. In Britain's high-tech service sectors, more and more major companies are directly or indirectly using Indian computer programmers, most of whom earn less than $3,000 a year. New electronic export zones that offer high-quality and high-tech services for vastly lower wages than Europe can offer are being set up near New Delhi, Bombay, Calcutta, Cochin, Kandi and Madras.

Rising unemployment in manufacturing sectors was supposed to be compensated for by a growth of the service sector. But now new technology is taking out the service jobs, too. Most of the recent cut-backs in the United States have been in the service industries, such as banking, insurance, accounting, law, communications, airlines, retailing and hotels.

The companies in the forefront of automation are often those with sufficient capital to exploit fully the new technologies. Prominent among these are the transnational corporations. The global economy is undergoing a phenomenal concentration of power into the hands of these global giants.

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The New Protectionism: Global Trade Rules Protect Corporations. Let Nations Protect Their People
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