Vietnam: Another WTO Miracle

On November 6, 2006, Vietnam entered the WTO. Western FDI could not wait: More cheap labor with a strong dictatorial regime to keep it line.

But things are not panning out as expected for the likes of firms such as Nike. Already, strikes are spreading across the country: 20,000 workers recently protested the $59 monthly salary. (No Nike sneakers for these workers, unless they plan not to eat for a few months.)

What is happening here? When workers in China were not paid anything, they rioted; but those riots were lost on the press. Certainly the economists gave it a pass: “Growing pains.” Vietnam is now attracting those same foreign firms that made a killing in China.

What makes Vietnam different from China?

Both are rigid, centrally controlled economies. Granted, China’s size makes it a bit harder to control. But when push comes to shove, don’t mess with Big Comrade.

I would suggest two things:

  1. Size
  2. History

Others can suggest, I am sure, other reasons. But these two strike me as central.

Vietnam’s population is a drop in the bucket compared to China’s billion strong poor: 85 million compared to China’s 1.3 billion. Twenty thousand people protesting in Vietnam is news; in China, such protests would barely make the last page.

Then there is history, Vietnam’s history with the West: the French and the Americans. Communist Vietnam Central is anxious to get on the “developing country” bandwagon, build trade and account surpluses–at the expense of the worker, of course–all in the name of globalization and free markets. They want to follow China’s example, but “the Communist Party’s historical promotion of mass revolutionary movements against foreign exploitation is beginning to undermine badly its new capitalist gambit.”

Additionally, the people remember; they have not forgotten the French or us. Despite all our talk, they know we used them as pawns, just as the French did.

And how deep is this worker protest?

Last year at least 541 labor strikes were held across the country, mostly at foreign-invested factories and involving an estimated 350,000 workers.

Those protests have clearly been fueled by a growing sense of economic injustice among factory workers and are now being compounded by galloping inflation rates. Consumer price inflation was 19.4% year on year in March, the biggest jump in over 13 years. Many economists are now starting to revised down their previously bullish economic growth forecasts for 2008.

Take a close look at the phrase “bullish economic growth forecasts.” How can we talk about “bullish economic growth” when people are making $59/month? What Vietnamese is profiting here? Some high party mucky-muck with connections to Nike and Hanoi?

Every time I mention something like this, someone always responds: “It is better than what they had,” as if we should be happy that they can make Nike sneakers at $0.30/hr, if that.

If you think that the Vietnam’s ruling party is really on the side of the workers, guess again.

At the same time, in a clear concession to foreign investors, the government is also drafting a decree that will make workers responsible for employer costs in dealing with strikes and will give the state the authority to force workers back to factory lines if deemed in the national interest. If implemented, some labor analysts believe, these actions could soon put workers and the government on a collision course.

Translation: If Nike or any other foreign firm suffers a setback because of a strike, the workers have to tally up. Yes, even if you are working for $0.30/hour, if you strike, you will have to pay Nike or whomever.

Is there any sanity or humanity in the WTO? Does it have any idea of what it is doing? Why does the WTO allow entry to a country that has absolutely no concern for its own workers?

And what was the Congressional role in Vietnam’s WTO entry?

Although Congress had no direct role in Vietnam’s accession to the WTO, congressional approval was necessary for the President to extend PNTR to Vietnam. The WTO requires its members to extend unconditional most-favored-nation status (MFN), called PNTR [Permanent Normal Trade Relations] in the United States, in order to receive the full benefits of WTO membership in their bilateral trade relations.

On December 8, 2006, guiding by such organizations as the American Chamber of Commerce and such Democratic luminaries as Charlie Rangel and Hillary Clinton, Congress gave Vietnam PNTR.

On PNTR for Vietnam, Dennis Kucinich asked the some of the right questions:

“Have we not had enough of the folly of the World Trade Organization?” which PNTR would let Vietnam join, asked Rep. Dennis Kucinich (D-Ohio). “Have we not lost enough good-paying jobs in this country?”

To which I would add, what has WTO entry done for the Vietnamese people?