Business Letter to President Bush on AFL-CIO China Trade Complaint
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April 7, 2004
The President
The White House
Washington, DC 20500
Dear Mr. President:
On March 16, 2004, the AFL-CIO filed a petition under Section 301 of the Trade Act of 1974 requesting that the Office of the U.S. Trade Representative (USTR) initiate an investigation of China’s labor practices. In its petition, the AFL-CIO calls upon USTR unilaterally to impose special duties of up to 77 percent on goods imported from the People’s Republic of China (PRC) and then (with trade restrictions already in place) “negotiate” an agreement with the PRC on its labor practices. In addition, the petitioner seeks to stop USTR from concluding new market-opening agreements with any of our trading partners until the World Trade Organization (WTO) “gives protection to workers’ fundamental rights that is equivalent to the protection to commercial interests.”
We understand that USTR has until April 30 to decide whether to initiate an investigation.
For the reasons discussed below – the likely undermining of three decades of a consistent U.S. policy of engagement with China that has steadily yielded results; the damage that the measures called for in this petition would cause American farmers, workers, companies and consumers; and the harm the requested measures would bring to our vital campaignefforts to open markets abroad -- we strongly urge that theyou to reject the petition be rejected.
U.S. companies support and apply high labor standards in their operations here at home and around the world. There is clearly great room for improvement in China’s labor practices. We emphatically agree that the Chinese Government must enforce its labor laws and adhere to its ILO commitments and its obligations under other international covenants. Improving labor conditions in China is a serious challenge, and we do not underestimate the magnitude of the task.
Neither this petition nor the package of remedies it prescribes, however, will be effective in improving China’s labor rights environment.
U.S. policy throughout six administrations has rested on the understanding that deepening economic relations and a commitment to the furtherance of the rule of law are the most constructive ways to encourage China’s development toward a more humane and just social order. The Congress fully affirmed this policy in 2000, by voting overwhelmingly, in a bipartisan manner, to grant China Permanent Normal Trade Relations upon China’s entrance into the WTO; Congress also established additional measures designed to promote social and human rights progress in China.
This steady American approach has borne fruit., with its emphasis on wide-ranging engagement with a changing China, has contributed to China's growing acceptance of international norms and standards.contributed to China’s growing acceptance of international norms and standards, while helping to alleviate some of China’s entrenched poverty and human misery. Many observers, for example, have pointed out the shrinking of state interference in the daily lives of China’s citizens as China’s economy has rapidly grown. China’s entry into the WTO in late 2001 has hastened the pace of change inside China.
While much work remains to be done, this consistent American China policy, with its stress on increasing economic and non-economic engagement with China, provides the strongest foundation for addressing shortcomings in Chinese labor practices.
The actions suggested by the AFL-CIO’s petition, on the other hand, would greatly hinder American efforts to promote constructive engagement and the rule of law, and to sustain the progress that has already been achieved. If the United States, in response to this petition, were to impose unilateral trade sanctions on Chinese imports in clear violation of our WTO obligations, America’s message to China would be clear, and self-damaging: China must adhere to its international obligations, but the United States need not do the same. Such unilateral action in violation of the United States’ own obligations would not only invite retaliation from China; it would compromise our ability in the future to secure other trading partners’ compliance with their own WTO commitments.
In recent years, the rate of growth of U.S. exports to China in recent years has exceeded all others oOur exports to China have risen 75% since 2000, and 29% in 2003. At this promising moment, tThe petitioner, by asking the US Trade Representative immediately to impose heavy, market-closing tariffs on Chinese imports in a manner contradictory to our fundamental WTO commitment to most-favored-nation treatment for all WTO members, would have the United States launch a trade war with our third-ranked global trading partner.
Cutting off billions of dollars worth of trade would threaten the livelihood of American farmers and workers who are today providing U.S. products and services to China’s growing market, without contributing to the amelioration of China’s widely recognized labor and human rights problems. Moreover, trade-restricting taxes on Chinese imports would ultimately be paid by American consumers, with the burden falling disproportionately on low- and middle income Americans.
The petitioner has further proposed that the United States should immediately stop negotiating any new trade agreements until the WTO incorporates as enforceable obligations commitments to the ILO core labor principles. The proposed remedy would bar the United States from fighting to eliminate the numerous trade barriers that currently burden our farmers, workers, companies, and consumers. Such a remedy would most likely undermine, rather than enhance, the ability of the ILO to promote the strongest possible labor standards in China and elsewhere.
In urging that the United States Trade Representative reject this petition, we strongly recommend that the Administration utilize the full range of governmental and non-governmental resources that the current relationship provides, including those enumerated by the U.S. Congress in 2000, to help China observe internationally recognized labor standards.
In conclusion, we recognize that U.S.-China trade relations raise many complex issues. In this letter we have focused on those issues raised directly by the AFL-CIO petition.
Thank you for your consideration of our views. on a matter of great importance to United States trade, economic, and foreign policy and to our national interest in a challenging world.
Sincerely,
Aerospace Industries Association
American Apparel & Footwear Association
American Chamber of Commerce in Guangdong
American Chamber of Commerce People's Republic of China
American Chamber of Commerce Shanghai
American Council of Life Insurers
American Insurance Association
American Soybean Association
Business Roundtable
Coalition for Employment Through Exports
Coalition of Service Industries
Colorado Retail Council
Consumer Electronics Association
Consumers for World Trade
Corn Refiners Association
Distilled Spirits Council of the United States
Electronic Industries Alliance
Emergency Committee for American Trade
Florida Retail Federation
Footwear Distributors and Retailers of America
Information Technology Industry Council
National Association of Manufacturers
The National Center for APEC
National Foreign Trade Council
National Oilseed Processors Association
National Retail Federation
Retail Industry Leaders Association
Retailers Association of Massachusetts
Toy Industry Association
The Travel Goods Association
U.S. Chamber of Commerce
The US-China Business Council
United States Association of Importers of Textiles and Apparel
United States Council for International Business
Washington Retail Association
Washington State China Relations Council
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