Editorial:

US blow on steel

The decision of the US administration to impose a 30 percent tariff on 
imported steel products blows out of the water the US contention that it is 
a leader in the campaign for "free" trade.

Its decision shows that when the governments of major countries are faced 
with pressure from home-grown corporations, they capitulate and impose 
tariffs or take other measures to raise protective walls.

The US decision has been denounced by a number of countries. The European 
Union has described it as "a major setback for the world trading system".

South Korean steel producers complained that America was arbitrarily 
discriminating against them and were reported as being "infuriated".

Russia said it would have a "serious impact on Russian-American relations". 
Perhaps as a retaliatory stroke Russia, which takes almost half of the US 
poultry exports, has banned the importation of poultry.

Malcolm Fraser wrote that "If President George Bush cannot withstand that 
pressure [from the US steel industry], Australia's chances of getting a 
free-trade deal with the US, which includes farm products, are virtually 
non-existent."

The US tariff is expected to have a serious affect on Australia's steel 
making industry that lists the US as a major market. The US action shows 
that irrespective of alliances and the Australian Government being prepared 
to jump to fulfil every demand of the US, this counts for nothing when the 
commercial interests of the US are at stake.

There is a glut of steel on the world market and, in addition to the 
imposition of tariffs, the US is pressurising other countries to lower 
their output and to close what it calls "inefficient and unprofitable 
factories".

Reflecting the deteriorating relations between the US and the European 
Union, Europe's Trade Commissioner said that the US was making countries 
negotiate "with a gun at their head".

Another negative factor is decline in steel prices of about 30 per cent in 
the last year, now the lowest in two decades.

The hypocrisy of the US leadership is demonstrated by the claim made by 
George Bush while making the announcement of the tariff on steel declare 
that he was a "free-trader".

The argument surrounding "free trade" and "protection" has been going on 
for at least 150 years. Importing countries attempting to build up their 
own industries imposed various protective measures. Exporting countries 
demanded "free" trade to enable their manufacturers to sell their goods 
into other countries without restrictions. Neither protection nor free 
trade is the answer.

Free trade is being strongly pushed by the major industrial countries, the 
IMF and the World Bank which push the needs of the corporations of these 
countries. Smaller countries are unable to withstand the pressures and 
demands of the big industrial countries and, as a consequence, their 
fledgling industries are strangled or are unable to even make a start. 
Protectionist measures (tariffs, quotas, bans, etc) can raise the price of 
goods on the market and hinder trade relations.

The alternative to both "free" trade and "protection" is the implementation 
of the principles of "mutually beneficial" trade. International trade is 
conducted with an eye to the benefit of both countries-not just one. It 
means the widespread conclusion of trade agreements between countries which 
set out the terms and conditions, the quantities, the price and quality, 
etc. of the goods being traded. It introduces a planned approach to trade 
and industry development.

It involves the public ownership of major trading organisations so that the 
national interests of all the countries concerned are taken into account.

The Australian Manufacturing Workers Union is waging a campaign for "fair 
trade" in response to the closure of many manufacturing enterprises in 
recent years as a result of overseas competition.

There cannot be "fair trade" or "mutually beneficial" trade so long as 
capitalism dominates. Capitalism means that the strong will continue to 
dominate putting the industries of weaker countries out of business, 
sacking workers and imposing whatever price and quality goods they please. 
It is the law of the jungle applied to trade.