SEN. DORGAN: Well, thank you for joining us. I'm joined by my colleague Senator Sherrod Brown and Senator Lindsey Graham to talk about the introduction of a piece of legislation to stop sweatshop abuses with respect to labor that produces products that are sold in the United States.
The bill that we will introduce is a bipartisan piece of legislation. It will be called the Decent Working Conditions and Fair Competition Act.
Let me describe the philosophy here. As you know, we have a lot of tension on the issue of trade. We have the largest trade deficit in the history of this country. I think all three of us agree on a bipartisan basis that our trade agreements have been unfair to our country. We need to negotiate fair-trade agreements that stand up for the interests of American workers, that stand up for our economic interests.
But even with all the tension about trade as between the chanting of free trade and the requirement I believe we should have for fair trade, even among all those tensions, it seems to me there ought to be some core things we would all agree upon.
Let me give you an example. Would we all agree that socks that are made in Chinese prisons should not be sent to the store shelves of the United States because socks made with prison labor would not represent fair competition? I would expect everybody would agree with that basic thing.
Let's step one step closer to the core issue here and say, well, if we agree with that premise, what about the issue of products that are made in sweatshop conditions? Wouldn't we agree that is not fair competition; those products shouldn't be on the store shelves of this country because it is exploiting labor and reprsents unfair competition?
Here is the cover of Business Week: "Secrets, Lies and Sweatshops: How Chinese Suppliers Hide the Truth from U.S. Companies." Really good reading. I suggest everybody take a look at that article.
And then let me describe to you the New York Times article, "The Ugly Side of Free Trade: Sweatshops in Jordan," talking about Bangladeshi workers brought to northern Jordan to be worked in sweatshops. And let me just give you a couple of examples.
Workers promised $120 a month in some cases hardly paid at all; one worker paid $50 for five months of work; 40-hour shifts -- not 40- hour workweeks -- 40-hour shifts were common; frequent beatings of workers who complained.
Now, what we do about all that? We're introducing a piece of legislation that is really quite simple.
The piece of legislation says first it is illegal to bring into this country the product of sweatshop factories. In this bill, a sweatshop factory is one where workers are abused in violation of that country's labor laws.
Number two, our bill allows U.S. retailers the right to sue their competitors for damages in U.S. courts if their competitors are sourcing their merchandise from sweatshop factories.
Now, this ought not be rocket science. Very simple -- do we believe the American marketplace ought to be open to the product of sweatshops in the rest of the world? Do we believe American workers ought to be told, this is your competition, abused workers in sweatshops? The answer is no. We can stop it. This legislation is legislation we will push very hard this year.
And I'm pleased to be joined today by my colleagues. Let me call on Senator Lindsey Graham for a few comments as well.
SEN. GRAHAM: Thank you, Senator Dorgan.
You will probably see the three of us throughout the year on different topics when it comes to trying to find some balanced trade. I've come to the conclusion that it's not in our national interest to chase certain groups to the bottom. My goal is to have a global economy where everyone can get the benefit of their labor, that if you do things in another country better than the United States, you should benefit.
But no one should have the benefit of forced labor of sweatshop labor. That to me seems to be just such a simple proposition. The fact that we need this legislation says a lot.
Number one, I want to congratulate those companies doing business abroad who are trying to bring up the standards.
There are many American companies doing business abroad that are trying to bring out the best in the workforce. But this bill is simple. It says if you're violating the country from where the product comes from, you have to obey their laws, not ours.
And let me say this quite honestly and openly. If you're a businessperson engaged in exploiting people to get a better market share, I hope you get fined, I hope you get sued. That's not the way to build up an economy, that's not the way to have global trade and it's not the best in America.
So I do hope this bill will get some attention, because it's WTO compliant. And believe it or not, ladies and gentlemen, there is a world out there where people are literally exploited, sometimes to the point of death, to make a quick buck.
And all of us need to come together and stop that. It is in our national interest to stop that, and I'm honored to be part of an effort to stop it.
SEN. DORGAN: Thank you, Senator Graham.
Senator Sherrod Brown.
SEN. BROWN: Byron and Lindsey, thank you very much. And thank you both, Senator Dorgan and Senator Graham, for their terrific work bipartisanly and in both houses to speak out for fair trade.
Our coalition last year in the Central American Free Trade Agreement -- bipartisan coalition, both houses of Congress -- showed something. It showed that we can change the debate on trade forever, and that's what the CAFTA coalition did. Inside groups, outside, religious organizations, labor organizations, environmental groups, human rights groups, all kinds of organizations in the community, and organizations around the country really fundamentally changed the way -- fundamentally changed the trade debate.
Today, a group of us in both parties join forces to speak out against a despicable practice, and that is sweatshops. Pope John Paul said we judge any economic system by what it does for and to ordinary people, and by how it permits all to participate in it. The economy should serve the people, the pope said, not that other way around.
The Decent Working Conditions and Fair Competition Act will help support American businesses and workers by banning the imports of all products made in sweatshops. It will hold accountable companies that use sweatshop labor, as well as U.S. corporations that buy from them, and it rewards those companies that do the right thing. Current U.S. trade policy too often allows for the inhumane exploitation of workers. This begins to end that practice.
In my home state of Ohio, we've lost some 40,000 jobs to China, some of them lost to sweatshops. If trade agreements can be crafted to protect drug patents and international property rights and DVDs, as they should, they can also include provisions that protect workers, protect the environment, and protect our communities. No longer are Democrats and Republicans in Congress going to stand by idly while businesses in North Dakota and South Carolina and Ohio are penalized for playing by the rules. In the last Congress, we changed the debate on trade. This Congress, we're going to change the face of trade.
SEN. DORGAN: Let me just -- two quick items. Upon complaint, the Federal Trade Commission would determine that an overseas factory was producing with sweatshop labor. It would issue an order prohibiting products from that factory into this country.
Violations of that order would carry a civil penalty of up to $10,000 for each violation. Each separate violation would be a separate offense. The Customs Service would be required to enforce this. And in addition, we provide a right of action by the competitor in the United States to go to court and seek an injunction, number one; and number two, to seek recompense, from the company that is offending, in the court.
Q How would you then monitor those companies? I mean, it's one thing to get status, but it's difficult to monitor.
And secondly, what about Chinese jail labor, Chinese prisoner labor, or prison labor anywhere, forced prison labor?
SEN. DORGAN: Well, prison labor, I believe that the product of prison labor is not allowed into this country under current law.
But second, enforcement will not be easy. In fact, this sort of thing is the product -- both of them are the product of investigations. But what will happen is the private sector will begin to take a look at how their competitors are producing, and they will make complaints to the Federal Trade Commission. There will be a powerful private sector incentive to demand that companies that are not complying begin complying or face court action or face substantial fines.
SEN. GRAHAM: If I could -- what we're trying to do is create a legal avenue for someone who has been offended by this practice to fight back. And there are a lot of companies playing fair. A lot of companies are going overseas and not only paying people well, but creating better conditions. They need to be rewarded. Those companies that are caught exploiting the labor market, who will not comply with the laws of the land where they're doing business, we're giving a legal avenue for them to be held accountable in this country. And I think the market forces of competition will take care of this. What's been missing is the legal avenue.
SEN. BROWN: One more point. I talk to small machine shop and tool and die makers all over Ohio who want to stay in this country, want to produce, want to manufacture here, want to pay their workers decent wages and healthcare benefits. They often can't compete. And to have the private course of action that Lindsey talked about, and that Byron talked about, is so very, very important, because down the road, whether it's sweatshop labor, whether it's forced labor -- and there are provision in U.S. law; there have been for some 70 years, but not very well enforced, because we haven't had either an aggressive USTR or allowed this private course of action.
SEN. DORGAN: Yes, ma'am?
Q What response have you had from retailers and companies like Wal-Mart, for example, who have used sweatshop labor in the past, to your bill?
SEN. DORGAN: Well, we haven't had a lot of response to our bill at this point because we're just in the process of introducing it. We did introduce a bill of this type at the end of the last session. Senator Brown introduced the version in the House. We introduced it in the Senate. But it was towards the end of the session. So we've not had much response at this point. But --
Q Do you get the impression that these companies that have used sweatshop labor are interested in cooperating at this point?
SEN. DORGAN: Some are, I believe, and I believe some are not. There's plenty of evidence that there are companies much more interested in the bottom line and profit than they are about treating people fairly. So they're willing to go find the bottom here. There are other companies, I think, that have an honest interest in making sure that they do the right thing and are hiring some folks to deal with those issues overseas.
But it's been slow going, I think. There's -- let me just say this. There is very substantial evidence and compelling evidence that there's substantial abuse of workers around the world. And this story -- and I encourage you to read the cover story of BusinessWeek, number one, and I encourage you to read about the people that are shipped from Bangladesh to northern Jordan, with whom we do have labor provisions in the trade agreement, put in sweatshop conditions, beaten and in some cases not paid at all months at a time, and working 40- hour shifts. That is almost unbelievable.
SEN. BROWN: And this is a direct violation, because it's Jordanian law, through U.S.-Jordan trade agreement, and they're violating Jordanian law. So it's a course of action that we'd win on.
SEN. DORGAN: Yes, sir?
Q I have a follow-up on this, a policy question, a political question.
Policy question: I was struck by -- you said that they have to be violating their laws.
SEN. DORGAN: That's correct.
Q So if we look at China, for instance, do they have laws that prohibit this?
A political question, last year, as I understand it, that when you introduced the bill, Senator Dorgan, there were no Republican co- sponsors. This year you have at least one Republican co-sponsor. With Democratic control of Congress, do you think that the bill will go farther this year than it did last year?
SEN. DORGAN: Yes.
Q And why?
SEN. DORGAN: Well -- (laughter) -- let me -- well, let me say, this is -- let me say this. This is a pretty weighty co-sponsor, right?
SEN. : Yeah.
SEN. DORGAN: (Laughter.) I mean, we're not talking about an insignificant co-sponsor. I assume you didn't mean that. (Laughter.)
Q (Off mike) --
SEN. DORGAN: This is a big deal.
SEN. GRAHAM: He's from South Carolina. (Laughter.)
SEN. DORGAN: Well, but this -- listen, this is a big deal, Les.
It may mean nothing to you, but it's a big deal to us, right? (Laughs, laughter.)
Let me just make the point, on the first point you were making was --
Q (Off mike) --
SEN. DORGAN: Oh, yes, of course. Of course, China has labor laws. Mexico has environmental laws. The question isn't what kind of laws do you have. The question is do you -- are laws enforced at all and especially with trade agreements. In this case with China, there is dramatic evidence of the fact that they have minimum wage laws and other laws, and they're hardly enforced at all.
SEN. GRAHAM: To the political question, once you try to explain to your colleagues what you're doing -- I'm dying to hear the company make the argument: We should not be required to comply with the labor laws of the country in which we do business. We should be allowed to break those labor laws, import the product into the United States and get a competitive advantage. I mean, nobody in their right mind is going to make that argument.
And I think every member of Congress, Republican or Democrat, should understand that the global economy has to have some floor to it. And this is an effort by one Republican now, but more to follow to basically tell the people who are engaged in the global economy, "We wish you well. We want you to do well, but there's certain things you're not going to be able to do any longer, and this is one of them."
I just can't imagine someone voting against a bill that says simply, "If you break the law of another country when it comes to the labor force to get a competitive advantage on our shores to put our people out of business, that the Congress says okay." We're not going to say okay.
SEN. BROWN: I would add, too, the elections this year spoke pretty strongly to supporting fair trade. The middle class, which is -- which spoke in a pretty unanimous voice all over the country that we want people in the House and in the Senate -- if you look at the records and the speeches, and all of that, of people who were elected this year -- that they want to see fair trade legislation.
And this is a major first step towards moving in that direction.
SEN. DORGAN: Other questions?
Yes, sir?
Q I just wonder if you could talk about the magnitude of the problem. I mean, these unfair practices or these sweatshop conditions exist all over the world. I mean, do you have any sense of U.S. clothing imports, you know, what percentage comes from sweatshops and would be affected by this legislation? Do you see China as the primary abuser, or is it most countries?
SEN. DORGAN: It is not just China. China is a very serious problem. I don't have numbers to give you, but I think almost everyone who's looked at this says it's a very serious problem. We have about 250 million kids around the world, age 5 to 14, that are working in the workforce, many of them that are working in conditions that nearly unbelievable.
And we just -- let me give you one anecdote, if I might. And I don't have it with me, but I can make it available to you by name. A company in China, that is a production capability in China, that was employed in this case by Wal-Mart. Wal-Mart, to their credit, went after them and said you're not complying with the labor conditions that exist in China. And so once they discovered the violation, they warned them. Came back a second time, discovered they were still violating it, warned them a second time. Came back the third time, found out they were still violating it -- you get three chances -- warned them a third time. Came back again, they were violating it again, so then they took the contract away. Then the company went to a consultant who told them how to fake their records so that it looked like they were complying, and then they got the contract back with fake records. I mean, that is not an unusual situation, and we've got to put a stop to it.
Yes, ma'am?
Q Will the Senate be listing for consumers, who certainly have a right to vote with their conscience and not just with their dollars, what companies are not going to be favoring abiding by the law and which companies don't currently, so that we -- obviously, they don't exist without the consumer.
SEN. DORGAN: You'll get a chance to see some of that in terms of the companies that weigh-in in opposition to this piece of legislation. And you'll be able to see some of it through the filings in the federal court system by other companies who take action against the companies they believe are exploiting labor in sweatshop conditions.
Yes?
Q (Off mike) -- you were saying about Wal-Mart being deceived by the trading company, does that mean that U.S. companies are going to be held responsible or be able to be sued in U.S. courts when a Chinese company tries literally to deceive them, goes to these great lengths, going to a consultant and -- I think something similar happened with Apple Computer not too long ago.
SEN. DORGAN: I think courts will determine whether companies have made a fair -- made a fair effort, and also whether the violation was willful. But I also just tell you that -- told you, rather, that situation to say it's sort of absurd.
You actually find them three times in violation and then go to a fourth time? I mean, that makes no sense at all. Do you ever come up on an intersection and you get three different red lights but you don't have to stop till the fourth? I mean, that makes no sense to me.
SEN. GRAHAM: Along those lines, it was not our goal to put companies in a "got you" situation, where you'll held civilly or -- liable for something you really couldn't control or you didn't know about. The problem here is it's a practice, it's a business practice, well known. Some people are trying to control it. Wal-Mart, to their credit, has tried to do some things about this, and the articles that he's mentioned exposed this worldwide.
So, no, you're not going to suffer because you were deceived. You will suffer if you're playing this game to get a competitive advantage, and I think you should.
SEN. DORGAN: Wal-Mart and Target have both made some efforts recently, but it's because of public pressure. And I commend those that are trying to make efforts.
SEN. GRAHAM: Right.
SEN. DORGAN: We want to stop the practice.
Q How would this mitigate the impact on domestic manufacturing, though? Because often retailers faced with this kind of pressure, manufacturing apparel overseas, will pull their business out of the factory and just shift it to another factory or even to another country, and not necessarily shift it back to the U.S.
SEN. DORGAN: Well, this gives our manufacturers an opportunity to seek redress in court with very substantial penalties and, incidentally, be able to mitigate their damages by achieving the reward from the company that's the offender. That's a very big deal. The opportunity to go to court and extract payment from the company that's been the violator is a very big deal for American manufacturers.
SEN. BROWN: It's sort of another example of when NAFTA passed in 1993 and Byron and I -- Lindsey was not in the House or Senate then -- Byron opposed it in the Senate, I opposed it in the House. We pushed another NAFTA, if you will, a NAFTA with higher labor and environmental standards. If that NAFTA had passed, living standards would have gone up in Mexico instead of poverty increasing. It would have meant more Mexicans purchasing American goods back and forth, helped American manufacturers, brought the standard of living up ultimately in both countries instead of this race to the bottom that Senator Graham talked about
So anytime you can do anything with sweatshops or anything else and the standard of living goes up in China or the standard of living goes up in Jordan, it means there -- more people are going to join the middle class in those countries and more people are going to buy American products at the same time.
SEN. DORGAN: Thank you very much.Federal News Service
