Image of Hammer and Sickle

New Communist Party of Britain

adopted December 2015

World trade

One of the most notable signs of the potential for chaos and disorder can be seen in the challenge that exists to capitalist state power by the monopoly capitalists — whether it be the banks’ manipulation of Libor or News International's phone hacking and bribery of state officials. This an example of the contradictions in monopoly capitalism. The state and the big economic monopolies are essential to each other, yet also challenge each other. The harnessing of these monopolies to a new system of discipline is a chief pre‑occupation of capitalist states while the monopolies seek to limit the powers of the state.

Globalisation, the internationalism of the division of labour, has continued apace since the turn of the millennium; it is a product of science, technology and the development of the productive forces and should be at the service of humankind with the right of every human being to develop and practice their talent, skills and knowledge. But globalisation, when put to work by monopoly capitalism, is nothing else but raw imperialism.

Imperialism, represented by the leaders of the developed countries, has striven through the World Trade Organisation (WTO), International Monetary Fund (IMF) and the World Bank to tighten their grip on the economies of all countries, in particular those of the developing world.

The view of the imperialists is that the raison d'être of these extra‑governmental organisations is to remove any restrictions on trade, regulation of internal markets in trade or services, to drop any restrictions on the movement of capital and removal of export subsidies and import tariffs which protect home grown industries and agriculture — in other words to give maximum freedom to the monopoly capitalists. They confirmed this in the communiqué issued after the 2008 G20 summit in Washington: "We underscore the critical importance of rejecting protectionism... We will refrain from raising new barriers to investment or to trade in goods and services." And then went on to instruct their trade ministers to conclude the Doha trade talks by the end of 2008.

Since then the talks have stalled, the EU insists that developing countries should open their manufacturing and service sectors to competition from EU companies. The EU strategy is about domination of the developing world; most of the developing countries are in no position to compete with the imperialists. The EU strategy is based on the assumption that poor countries should satisfy themselves with being commodity suppliers to rich nations and should forgo attempts to promote their own manufacturing and service sector industries. This is nothing other than the extension of the implementation of the single market in the EU, whereby the less developed countries have seen their economies devastated by the EU monopolies.

The WTO has become the focus of the struggle between the developing and developed countries. The developing countries such as Brazil, China and India see the current rules as being heavily weighted in favour of the monopoly capitalists and are negotiating for more equitable rules and practices in world trade.

In May 2012 Pascal Lamy, Director General of the WTO, almost admitted that the strategy of the developed countries had been defeated when he proposed that negotiations should take "small steps, gradually moving forward the parts of the Doha Round which were mature, and re‑thinking those where greater differences remained”.

By September 2014 the talks were still stalled and Pascal Lamy and been replaced as Director General of the WTO by Roberto Azevêdo. Behind closed doors he has been meeting ambassadors and ministers from the WTO’s 160 members in an effort to deliver the broad freeing up of the global trade in agriculture, manufactured goods and services that the Doha round promised. The key issues remain. Developing economies want the US, EU and other monopoly capitalist economies to stop subsidies to their farmers allowing greater access to markets for their agricultural and manufactured products.

In addition to failing to agree at the WTO, the US failed to establish the Free Trade Area of the Americas (FTAA) and extension of the North American Free Trade Agreement (NAFTA), which would have enabled US agriculture and industry to swamp the markets of Central and South America; it would have destroyed local production and converted those countries into mere satellites of the US economy. The FTAA was opposed by Cuba, Venezuela, Bolivia, Ecuador, Dominica, Nicaragua and Honduras, some of whom are now members of the “Bolivarian Alternative for the Americas” (ALBA) and the “Community of Latin American and Caribbean States” (CELAC).

In June 2014 the US responded to these failures to extend its dominance with what Mike Froman, US trade representative called a “major architectural effort” to revamp the “rules, relationships and institutions that have underpinned the global trading system”. That effort has the US pushing to form regional trading blocs through a series of bilateral trade deals such as “The Transatlantic Trade and Investment Partnership” (TTIP).

In February 2014 a series of trade negotiations, carried out mostly in secret, started between the EU and US commonly known as “The Transatlantic Trade and Investment Partnership”. As a bi‑lateral trade agreement, TTIP is about reducing the regulatory barriers to trade for big business, so where an individual state's food safety law, environmental legislation, banking regulations and other sovereign powers are seen as an impediment to trade, they can be challenged by big business and declared illegal. Effectively, it is an attack on workers in both the EU and US by transnational corporations. China has expressed strong views about what is really going on complaining that “The US is trying to rewrite global trade rules behind our backs”. Trade negotiations that are conducted in secret and are designed to exclude certain trading nations will not herald a new era of economic integration but rather the collapse of globalisation and renewed trade wars.

Some of the aims of TTIP -

It remains to be seen what happens next. When economic bullying fails and trade wars are started, imperialism, led by the US and Britain, has a tendency to actively engage in war or the threat of war, when it sees its economic and political demands rebutted. But wherever there is oppression there is resistance. The Cuban people have defied the might of US imperialism for over 50 years. The peoples of Iraq continue oppose imperialism even though US and British imperialists occupy their countries. Syria is defying the war drums of NATO imperialism and the Palestinians demand the restoration of their national rights and continue to resist the US proxy — Israel.

The Greek people said “No” to the austerity package that the EU and IMF were trying to impose on them. However, the imperialists have managed to impose onerous financial conditions on the Ukrainian people by the EU and US instigation of the Ukrainian Kiev regime, backed by their fascist allies.

In contrast to imperialism, socialism, the system upheld and developed in People’s China, Democratic Korea, Vietnam, Laos and Cuba, continue to develop its economies despite the crisis in the capitalist economies. These socialist countries continue to advance along the revolutionary path charted by their communist parties in applying the principles of Marxism‑Leninism to the concrete conditions that exist in their own countries. All have developed closer economic ties and are seeing positive levels of growth.

The DPRK in particular has shown the possibility of building an advanced industrialised economy catering to the economic, social and cultural needs of its people on the basis of self‑reliance, with no concessions to the international capitalist institutions (the IMF, World Bank, WTO and so on).

China is implementing a 10 to 20‑year‑plan to make the Renminbi into a fully convertible international trading currency and establish a zone to balance the US dollar zone that has dominated the world’s financial system since the end of the Second World War. A growing number of countries including Japan, Malaysia, India and Brazil are conducting trade on the basis of Yuan Renminbi held by their respective central banks.

China is deepening its ties with the developing countries through equitable trade relationships by selling consumer goods and power‑generating equipment. China's banks provide loans to expand roads, rail and ports in a way that accelerates growth and boosts trade. China became the world’s biggest trader in goods during 2013. China's is expanding trade in a way to reduce its dependence on the crisis‑prone US and Europe. Chinese trade with the rest of Asia and increasing flows with the Middle East represent a shift in power away from the US. Chinese imports and exports now account for more than 10 per cent of global goods trade. In 2013 exports totalled $2.21 trillion and imports $1.95 trillion.

China's trade with Africa has increased more than tenfold since 2000 to about $210bn in 2013 and in the two years to 2014 China has given out about $670bn in credit — eclipsing all of the loans, guarantees and insurance extended by the US in the previous eight decades. This investment is primarily being channelled into manufacturing, transport and construction.

China is backing railroad projects in Kenya and have started to participate in key sectors such as telecommunications, transport construction, power plants, waste disposal and ports. There has been a $2 billion investment in a shoe manufacturing project in Ethiopia that should employ more than 100,000 local workers. The sub‑Saharan African is growing at about 5 per cent per year and with a growing educated working class it is anticipated that trade relations between China and Africa will grow significantly.