Multinational Monitor

MAR 1998
VOL 19 No. 3


Pentagon Welfare: The Corporate Campaign for NATO Expansion
by William Hartung

Fields of Nightmares: The Not-Yet Eliminated Global Landmine Industry
by E.J. Hogendoorn

Guarding the Multinationals: DSL and the International Private "Security Business"
by Pratap Chatterjee


Living Downstream
an interview with
Sandra Steingraber


Behind the Lines

Executive Decisions

The Front
Domesticating Big Tobacco - The Anti-Child Support Act

The Lawrence Summers Memorial Award

Trade Watch
Recolonizing Africa

Money & Politics
The Oil Royalty

Their Masters' Voices
Whipping the Minimum Wage

Names In the News


Trade Watch

Recolonizing Africa

African countries have pursued "retarded" economic policies, says Representative Phil Crane, R-Illinois, and he intends to teach them some sense. His vehicle for doing so: H.R. 1432, the "Africa Growth and Opportunity Act."

In March, the U.S. House of Representatives passed the bill by a 233-to-186 margin. If approved by the Senate in an expected May vote, President Clinton has promised to sign the bill, which would extend NAFTA-like treatment to some African countries.

In fact, the African trade bill is in many ways more harshly "neoliberal" than NAFTA. Whereas fair trade, democracy and human rights activists have criticized NAFTA and similar trade agreements for encouraging a "race to the bottom" to attract foreign investment, and for failing to include language which would protect living standards, the Crane Bill explicitly requires African countries to pursue neoliberal economic policies in order to receive trade preferences.

The Crane Bill holds out the promise of reduced tariff rates, subsidies for U.S. investments in Africa and other purported benefits to African countries, but only on condition that they:

  • Obey IMF structural adjustment programs, which typically include -- and have included in Africa -- cutting government spending, especially "human infrastructure" spending such as public health and education, privatizing public services and other publicly owned enterprises, cutting taxes on corporations, cutting subsidies for domestically oriented food production and subsidies for basic consumption.

  • Provide "national treatment" to foreign, particularly U.S., investors. "National treatment" is not limited to barring laws which attempt to restrict foreign investment relative to domestic investment. The concept is defined to bar also any law or regulation which has the effect of disadvantaging foreign investment, regardless of its intent.

  • Privatize huge swaths of weak economies in which the government is frequently the only large-scale government actor; and

  • Obey WTO tariff reduction schedules, even if they are not WTO members, and to try to join the WTO if they are not already members.

For most African countries, which have minimal industrial and export capacity, the bill's trade and investment "benefits" are likely to prove illusory. Indeed, one of the biggest "exports" are likely to be illegally transshipped textiles from China. Textile quotas on Kenya and Mauritius were imposed in order to address the problem of China and other Asian countries shipping goods to Africa and then shipping again to the United States -- with African labels -- in order to evade quotas on Asian textiles.

Opponents of the Crane bill, especially UNITE, the textile workers' union, fear that the removal of these quotas will again lead to a flood of illegal Chinese imports, especially given the fact that the Crane Bill carries no African content requirement for the goods receiving new trade preferences.

Moreover, the bill does not require that the goods be produced by African workers, and opponents fear that the bill will encourage the formation of textile "export colonies" importing Asian workers, such as the now notorious near-prisons in the Northern Mariana islands which currently produce for the U.S. market as "Made in U.S.A." while being exempt from U.S. labor law. The Clean Clothes Campaign, a European anti-sweatshop group, reports that by official count there are already 5,000 Chinese contract workers in Mauritius, who are seen by management "as available for 24 hours, 7 days a week. We haven't met any Chinese worker who works for less than 7 days a week." Nor is there any reason to believe that the expansion of this export sector will be linked in any way to developing the underlying domestic economy.

The Crane bill sped through the House of Representatives with the curious support of many members of the Congressional Black Caucus, who wanted Africa to "get its due" -- a perceived equal treatment with Mexico, the "beneficiary" of NAFTA, and Asia, the "beneficiary" of the recent International Monetary Fund bailout. Strident support by Congressional Black Caucus member Charles Rangel, D-New York, coupled with a vacuum of leadership from some African solidarity groups, enabled the proponents of the bill to intimidate many potential opponents until recently with the threat that a vote against the bill would be perceived as a vote against Africa.

However, a spirited lobbying campaign led by TransAfrica President Randall Robinson and Ralph Nader changed the Crane Bill from a "done deal" to a contested vote.

"We do not consider it constructive for the United States to demand solely those policies which make it easier for foreign corporations to function unfettered in African countries," said Robinson, "while failing to stress those policies which would directly benefit the people of Africa, such as public investment in the areas of health, education and democratization."

Many African-American members eventually turned against the bill. Jesse Jackson, Jr., D-Illinois, an original co-sponsor of the bill, came to liken the Crane bill to a previous "trade initiative" -- the slave trade, and then proceeded to grill members of Congress about the corporate recolonization of Africa dictated by the bill's provisions.

-- Robert Naiman

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