China labor sanctions sought
By Stephen Franklin
Chicago Tribune
In an unprecedented challenge to a major trading partner, the AFL-CIO yesterday asked the federal government to apply economic sanctions against China, which it accuses of 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 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 United States, 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's 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 sanction for the Institute for International Economics, a think tank in Washington, D.C.
Lance Compa, an expert on international labor law at Cornell University, said that the administration would "create a real problem politically if it just pitches this complaint without giving it serious consideration."
But as Compa and other experts pointed out, rules laid down by the World Trade Organization might block any actions by the United States against China.
To avoid trouble with the WTO, for example, the United States 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 AFL-CIO's complaint describes China as the "world's sweatshop," staffed by an "enormous subcaste of factory workers."
The wages of Chinese workers, who produce goods sold in the United States and elsewhere, range as low as 15 to 30 cents an hour, according to the complaint. So, too, the complaint alleges that although workers in China's factories have boosted their productivity, their inflation-adjusted wages have declined during the past decade.
One remedy to the problem, according to Barenberg, would be for the United States to impose trade sanctions on China that match the cost advantages it receives as a result of its alleged workplace abuses. As the alleged abuses are reduced, the sanctions would be reduced, he added.
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.
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.
