A.F.L.-C.I.O. to Press Bush for Penalties Against China March 16, 2004 By STEVEN GREENHOUSE and ELIZABETH BECKER Correction Appended WASHINGTON, March 15 - The A.F.L.-C.I.O. will file an unusual trade complaint on Tuesday to press President Bush to punish China, which it asserts has gained a commercial advantage through violating workers' rights by suppressing strikes, banning independent trade unions and not enforcing minimum wage laws. Timed to maximize pressure on Mr. Bush as the presidential campaign heats up, the complaint asserts that the United States has lost up to 727,000 factory jobs because the labor violations it cites artificially lowered China's production costs and unfairly undercut American companies. The A.F.L.-C.I.O. argues that this illegal repression of workers' rights translates into a 43 percent cost advantage on average for China. "This will put the onus on the Bush administration to explain that China is not repressing workers' rights, and to me that is an extraordinarily difficult case to make," said James Mann, a China expert at the Center for Strategic and International Studies. "The record going back for decades is that China has intensely resisted independent trade unions, and I don't see how the administration can pretend otherwise." This is the first case ever brought under the Trade Act of 1974 that seeks penalties over violations of workers' rights. Some trade experts said the complaint could be vulnerable to challenge at the World Trade Organization because global trade rules do not protect labor rights. Concerned about the loss of nearly three million factory jobs since January 2001, the A.F.L.-C.I.O. is asking President Bush to impose punitive tariffs of up to 77 percent on China or to elicit a pledge to halt all such violations. Union leaders warned that rejecting the complaint would anger millions of American workers,
especially in Midwestern battleground states where factory workers have been hit especially hard. "American workers are suffering, they're losing their jobs, they're losing hope," said Barbara Shailor, the A.F.L.-C.I.O.'s director of international affairs. "At the same time, Chinese workers are suffering under repressive conditions and are denied their most fundamental rights. Unless some action is taken to remedy this, we will see a continued hemorrhaging of jobs in the United States." The complaint comes as the Bush administration prepares for next month's visit to Washington by China's vice premier, Wu Yi, who will discuss trade and commercial conflicts between the two countries. The A.F.L.-C.I.O., which represents 13 million American workers, plans to file the complaint under Section 301 of the trade act, which makes it an unfair trade practice for countries to violate internationally recognized workers' rights. President Bush will have 45 days to decide whether to let the complaint proceed. If he lets it go forward, the International Trade Commission will have a year to rule on it. Trade experts said China would undoubtedly be angered if Mr. Bush allowed the complaint to go forward. A spokesman in the office of Robert B. Zoellick, the United States trade representative, declined to comment specifically on the complaint, saying it would be inappropriate until the office had reviewed it. However, the spokesman said in a statement, "The United States is a leader in promoting internationally recognized labor standards and human rights globally, especially in countries where those standards are not fully upheld." To buttress its position, the A.F.L.-C.I.O. cited the State Department's latest annual human rights report, which states that China "continued to deny internationally recognized worker rights" and has slid backward on arresting labor leaders. The Chinese Embassy in Washington did not respond to telephone inquiries.
G. Hamilton Loeb, a lawyer who often represents China, said the unions' efforts would ultimately fail because global trade rules do not protect workers' rights and also bar one country from unilaterally punishing another over an issue not covered by those rules. "China takes its World Trade Organization commitments very seriously, but the W.T.O. standards do not extend into these labor issues," Mr. Loeb said. Senator John Kerry of Massachusetts, the presumptive Democratic presidential nominee, voiced sympathy with the unions' complaint, saying he would make workers' rights here and abroad a fundamental part of American trade policy. "The Bush administration has completely walked away from using trade policy to raise living standards and improve the rights of workers at home and abroad," Mr. Kerry said in a statement. "While I'm not familiar with all the details of this case, I believe that it marks an important challenge on behalf of American workers and raises real concerns about China's treatment of its workers." The 105-page complaint sketches a nightmarish picture of factory workers in China. Citing reports by governments and human rights groups, the complaint says that strike leaders are often arrested and tortured. At many factories, independent labor unions are banned, and the only ones allowed are slavishly attached to the Communist Party's official union. Millions of peasants who migrate to urban factory jobs are frequently treated like bonded laborers, often working 18-hour days for half the minimum wage, the complaint asserts. They often live in prison-like dormitories, the complaint says, and often are unable to leave their jobs because their supervisors take their travel documents. Asserting that labor violations depress China's wages by 47 percent to 86 percent, the complaint asserts that wages in China would increase twofold to sevenfold if China allowed strikes and independent trade unions, enforced its minimum wage law and granted full legal protections to migrant
workers. The complaint argued that without these artificially depressed wages and unfair competition, the United States would not have lost nearly 323,000 apparel and textile jobs the last two years. "China's capacity is so vast and the labor repression so pervasive that together they create incredible downward push on wages and production in the rest of the world's economy," said Mark Levinson, chief economist for Unite, the nation's largest apparel union. The complaint asserts that the labor violations give China's producers an improper cost advantage of 10 percent to 77 percent, depending on which economic model is used. The A.F.L.-C.I.O. is requesting a punitive tariff of up to 77 percent and a pledge from China to comply with labor rights standards. "The purpose of the trade remedies is not protectionist," the complaint says. "They are, rather, intended to bring about positive change for China's workers and to ensure that global competition is fair for workers everywhere." The complaint's main author is Mark Barenberg, a Columbia University law professor. Robert A. Kapp, president of the U.S.-China Business Council, said he thought China could not climb out of poverty while letting its hundreds of millions of workers organize independent unions for higher wages. He asserted that the American labor movement was making a "colossal mistake" by turning a complicated trade and development issue into a campaign issue. The complaint asserts that when China artificially depresses wages by violating workers' rights, it not only reduces wages and jobs in the United States but also hurts wages and jobs in Bangladesh, Indonesia and other third-world countries that compete with China. These artificially depressed wages have fueled China's amazing manufacturing boom, the complaint contends, noting that China will add more factory jobs over the next five years than the total number of factory jobs in the United States, Europe and Japan.
"China's trade practices with regard to repressing their people, and tolerating forced labor, child labor, no maximum hours, repressing people from joining unions are all unreasonable trade practices," said James P. Hoffa, president of the Teamsters, a union courted by the White House. "What that means for the American worker is they accelerate the number of jobs leaving the country." Steven Greenhouse reported for this article from New York and Elizabeth Becker from Washington.