Chicago Tribune | By Stephen Franklin | March 17, 2004
In an unprecedented challenge to a major trading partner, the AFL-CIO on Tuesday asked the U.S. government to apply economic sanctions against China for allegedly operating an abusive, low-pay system that has cost thousands of American jobs.
Such business practices allow companies doing business in the world's largest country to pay their workers up to 86 percent less than they should, allowing them to cut the prices by as much as 44 percent, the labor group said.
That has resulted in the loss of up to 727,130 factory jobs in the U.S., according to the umbrella labor group, which represents the nation's major unions.
The complaint marks the first time that Section 301 of the U.S. Trade Act of 1974 has been used to seek trade penalties against another country because of workers' rights abuses. In the past, businesses have relied on the same section to single out other countries' policies that harm U.S. exports.
"The reason for focusing on China is that its controls over its workers are comprehensive and unremitting," said Mark Barenberg, a Columbia University law professor and international labor law expert, who wrote the 104-page complaint for the AFL-CIO.
Robert Kapp, president of the Washington-based U.S.-China Business Council, issued a blistering rebuttal to the AFL-CIO action, calling it "an ingenious but disingenuous effort either to destroy virtually all trade with China or to turn China once again into a cudgel for the waging of election-year warfare."
To be sure, most experts predicted that this year's elections and especially the heavy focus by politicians on the loss of American jobs would play a role in how the Bush administration handles the petition.
"If it were not an election year, they would reject it out of hand," suggested Kimberly Elliot, an expert on foreign trade sanctions for the Institute for International Economics, a think tank in Washington.
As experts pointed out, rules laid down by the World Trade Organization might block any actions by the U.S. against China.
To avoid trouble with the WTO, for example, the U.S. would have to show that it "wasn't arbitrarily singling out China," and that it is not the sole judge of China's abuses, said Robert Howse, an international trade expert at the University of Michigan Law School in Ann Arbor, Mich.
A spokesman for the U.S. Trade Representative's office told Reuters news service that it was inappropriate for the administration to comment on the AFL-CIO's request until it "has had an opportunity to give the petition due consideration, as required by law."
The wages of Chinese workers, who produce goods sold in the U.S and elsewhere, range as low as 15 to 30 cents an hour, according to the complaint. It also alleges that although workers in China's factories have boosted their productivity, their inflation-adjusted wages have declined during the last decade.
Many of the complaint's allegations echo similar charges made by the U.S. State Department in its annual report on human rights in China. On work conditions, for example, the State Department's report last month said that China has laws protecting its workers, but that there is a "substantial gap" between the law and reality.
The State Department's 2003 Human Rights Report provoked a strong rebuke from Chinese officials, who issued a statement, urging the U.S. to "stop using its double standard" and to "stop interfering in other countries' internal affairs in the name of human rights."
The U.S. Trade Representative has 45 days to decide whether it will investigate the complaint, and if it does, another 30 days to begin to hold hearings on the issue, Barenberg said.Chicago Tribune:
