Bush Says "No" to the AFL-CIO on China Labor Practices
May 28, 2004Consumers for World Trade
applauds the Administration for its recent decision to reject a request by
the American Federation of Labor and Congress of Industrial Organizations
(AFL-CIO) that would have used our trade remedy laws to challenge Chinese
labor practices.
In March of this year, the AFL-CIO filed an unprecedented petition under Section
301 of the Trade Act of 1974 demanding that President Bush use all the policy
tools at his disposal to ensure that the Chinese government comply with internationally
recognized workers' rights. This provision of U.S. law, often called the "reciprocity"
provision, is designed as a tool to get foreign countries to dismantle economic
and trade policies that "unfairly" tip the balance of trade. It
is usually used as a negotiation tool on issues such as intellectual property
rights protection. It has never been used as a tool to enforce international
labor standards.
Section 301 requires the administration to find that a country has engaged
in some kind of unfair trading practice and to impose punitive tariffs on
a selection of products from that country in "retaliation" for the
unfair practice. Section 301 skirts very close to the edge of what is permissible
under the rules of the World Trade Organization, and many believe it is a
protectionist provision.
The AFL-CIO argued that the purpose of this provision of trade law is not
protectionist, but is to bring about positive change for China's workers and
to ensure that global competition is fair for workers everywhere. Nevertheless,
they sought the imposition of punitive border taxes that would have virtually
stopped all trade with China. But that was not protectionist, in their view.
Happily the Bush Administration
saw this petition for what it was -- a political ploy. The truth is it would
be unwise for the Bush Administration to inflict punitive measures on China
at this time. First of all, China's imports of U.S. manufactured goods and
raw materials -- notably steel, has recently skyrocketed because the country's
economy is growing by leaps and bounds. Touching off a trade war at this juncture
would not have been in U.S. economic interests or the interests of many American
workers.
More importantly, it isn't clear that China's labor policy is that out of
line with international labor standards. China has a relatively good record
on child labor, for instance. And even the United States has not ratified
every international labor standard published by the International Labor Organization
(ILO). So, the Bush Administration decided wisely not to initiate a de-facto
trade embargo that would likely have touched off a global recession.