You understand the mainstream debate over trade – on one side are the sophisticated, global "free traders," and on the other are those naÃ¯ve "protectionists" trying to wreak havoc with their pesky environmental and labor regulations. But over the past two weeks, the slips of those who claim the mantle of free trade have been showing.
Given the chance to stand by their rhetoric or protect American industry – most recently from the Yellow Peril of Asian seafood exports – they did what they always do; they proved that, in reality, there are no free traders.
The first blow to the notion of "economic freedom" came Nov. 26, when the World Trade Organization authorized sanctions against us in retaliation for the WTO-illegal Byrd Amendment. That law allows American corporations to receive duties directly from overseas rivals they accuse of "dumping" and other trade hijinks. The foreign firms get a double-whammy; they pay the duties and at the same time they fatten their competitors' bottom line. And consumers get a double-screwing; our tax dollars are used to collect the private sector's alms and in return we get to pay higher prices.
Then, last Tuesday, there was another knock to the notion that 'a rising tide will raise all boats.' In what Forbes called "a blatant display of protectionism," the free-trading, market-worshipping Bush Administration approved of duties ranging from 4 to 113 percent on shrimp from China and Vietnam.
Vietnam may be a trade opponent now, but starting in the late 1980s, there was a big bipartisan push – led by Republican John McCain and Democrat John Kerry – to introduce a free market system to our former enemies in Hanoi. The hope was that we could accomplish with aid and technical assistance what we failed to do with guns and napalm 40 years ago.
Two areas USAID officials identified for development were shrimp and catfish farming in the lush, nutrient-rich Mekong Delta. With its inexpensive labor and good climate, Vietnam had excellent prospects for developing its seafood exports. USAID and international development banks started pumping seed money into fish farming projects.
Their optimism proved well founded. According to the New York Times, "within a few years, an estimated half-million Vietnamese were living off a catfish trade nurtured by private entrepreneurs. Vietnam captured 20 percent of the frozen catfish-fillet market in the United States." By 2002, shrimp was Vietnam's largest seafood export, and, according to Agence France Presse, the U.S. – at $467 million dollars – was its biggest buyer.
Rural poverty rates in Vietnam dropped from 70 percent to 30 percent during the 1990s, according to the Times. But prices also dropped and catfish producers in Mississippi, Louisiana, Alabama and Arkansas, and shrimpers from eight coastal states began to feel the pinch. So in 2002 The Mississippi Delta Catfish Farmers – an industry lobby – reached out to Trent Lott (R-Miss.), then the Senate Majority Leader.
Lott amended an appropriations bill with a little rider that declared that out of 2,000 types of catfish, only the American family – Ictaluridae – could be labeled "catfish," according to the New York Times. So the Vietnamese could sell their fish in the States only under the Vietnamese words "basa" and "tra."
Needless to say, sales dropped dramatically – "a fried basa po-boy" just doesn't have the same down-home feel. But that wasn't enough; the same group then initiated an "anti-dumping" measure against Vietnam. With the help of Lott and Arkansas Democrat Marion Berry – who, with typical congressional tact, reminded worried consumers that we dumped quite a bit of Agent Orange in the Mekong Delta – the Commerce Department imposed tariffs of 64 percent on Vietnamese catfish.
A foreign industry is said to be "dumping" when it sells its goods at prices below the cost of production to drive out local and foreign competition. At a fair trade conference last year, a member of a Vietnamese delegation said that the rural catfish farmers are simply too poor to "dump" their products on the American market even if they wanted to. "There aren't big agribusinesses in the Mekong Delta," she said. "If these people sell below cost, their families won't eat."
The Southern Shrimp Alliance – another industry PAC – was impressed by Lott's moves. They hired a couple of mega-law firms and lobbyists to follow the catfish model.
According to Forbes, they were going up against 20 firms retained by Brazil, Ecuador, India, Thailand, China, Vietnam and the American Seafood Distributors Association.
But the shrimpers' hired heavy players (and paragons of corporate responsibility). In the lead is Dewey Ballantine, which took some heat in the legal community when its annual dinner featured a song parody with buttoned-down white guys (I assume) pretending to be Chinese; they did the Charlie Chan "we so solly" thing. Funny, no?
That was followed by the leak of a firm-wide e-mail about some puppies up for adoption, in which the London office's Douglas Getter, Director of European acquisitions, begged: "Please don't let these puppies go to a Chinese restaurant!" Oh, how the Asian American Bar Association laughed and laughed.
Funnier still was when the firm was forced to fork over a fine to settle Treasury Department allegations that it engaged in trade with North Korea, according to the Corporate Crime Reporter.
The shrimpers also hired the Louisiana firm Jones Walker to lobby on its behalf. Jones Walker is the leading employer "labor relations" firm (read cutthroat union-busters) in Louisiana. Through June, it also handled at least $150,000 bucks worth of lobbying for CACI, the defense contractor that was implicated – in one of five separate probes of its Pentagon dealings – in the prison abuse at Abu Ghraib, according to Salon.com.
Judging by last Tuesday's announcement, the firms were effective, but the dumping charge is as bogus for shrimp as it is for catfish. U.S. shrimpers catch their fare in the open ocean while most Asian shrimp is raised with cheap labor in efficient fishponds.
As a result of all this chicanery, shrimp exports to the U.S. through June had declined by 34 percent compared to the same period last year, according to the Voice of Vietnam. Rural poverty rates, too, are on the rebound. And for his maneuvering, Lott went on to win the 2003 "Spirit of Enterprise" award from the U.S. Chamber of Commerce for his dedication to free-market ideals.
Tip of the Iceberg
According to Public Citizen, despite our breathless devotion to free markets, "Each year, U.S. taxpayers subsidize businesses to the tune of almost $125 billion, the equivalent of all the income tax paid by 60 million individuals and families." That's probably a conservative estimate; using a broader definition of 'corporate welfare' than Public Citizen, Mark Zepezauer and Arthur Naiman estimated in their book "Take the Rich Off Welfare" that the federal government handed out $448 billion dollars to private firms in 1996.
Keep that in mind the next time you hear a member of Congress blathering on about free trade. Remember precisely what they mean: during the next decade, with projected federal deficits of between $1.4 and $5.9 trillion dollars, our Congress will hand over more than a trillion tax dollars to private firms, a fraction of which will then be funneled through campaign contributions right back into getting those same representatives elected so they can support future protectionism and more porky subsidies. That's what they mean by free trade, and the Asian seafood wars are a perfect example.
Now, I'm happy to call Trent Lott, George Bush and Co. a bunch of hypocrites, but I won't judge them for trying to save their jobs, just as I won't condemn a vulnerable steelworker who does the same. It's a complex issue, and free trade sounds great to a lot of people until their livelihood is at stake. That's just as true for Trent Lott when he protects his corporate patrons as it is for those struggling to eke out a living in fishponds and rice paddies in the developing world. The only difference is rhetorical.