Vol. IX, Bulletin No.4 March 22, 2004
AFL-CIO Files Legal Action against 'Unreasonable Trade Practice'
Reaching Out to China's Workers and Ours
Thus opens a 108-page document titled "Section 301 Petition of the American Federation of Labor and Congress of Industrial Organizations" (AFL-CI0). It seeks to rectify a gross injustice inflicted on many millions of workers in the People's Republic of China and, to a lesser extent, in the United States.
The document, a petition filed on Mar.16 with the United States Trade Representative (USTR) in the Executive Office of the President, develops a detailed legal case that:
'A Forewarning of a Shock Yet To Be Felt'
- China persistently denies China's workers their basic rights, including those enumerated under section 301 of the Trade Act of 1974 and under some of China's own laws, as documented by numerous sources, including China scholars and the U.S. State Department.
- China's wholesale denial of these rights "burdens" U.S. commerce with an "unreasonable trade practice": it gives China an unfair cost advantage through which the United States has already lost at least 727,000 jobs, with more bound to follow.
- The President and USTR should take remedial action, starting with trade penalties on China "commensurate with the cost advantage caused by China's repression of worker rights."
"There is no doubt that the impact of those violations on U.S. workers is substantial," the final paragraph of the petition states. "Equally important, the estimated impact is a forewarning of the supply shock from China-based production that has yet to be felt. Once that shock is felt, the damage will be irreparable."
At a press conference announcing the petition, Wei Jinsheng, a Chinese worker advocate and human rights activist, charged that the plight of workers in China may be worse than the document indicates. "The lives of workers are miserable," he said, and brought up an issue outside the realm of a 301 trade petition: by depriving workers of decent wages, the government is able to have "money to purchase weapons."
Although the AFL-CIO has asked for "immediate" action, trade law procedures are notoriously cumbersome. The Bush administration has 45 days to accept or reject the petition. If it accepts the petition, the government has 60 days to hold a hearing and one year to decide what, if any, action to take.
Will WTO's Biased Regulations Pose an Obstacle?
The administration may justify rejecting the petition by claiming that it violates the regulations of the World Trade Organization. Of course, the United States always faithfully adheres to WTO regulations. Sure it does. For four years now, it has ignored a WTO ruling that certain U.S. export subsidies are illegal. As a result, with WTO approval, the European Union is applying sanctions in the form of higher duties to Europe costing at least $300 million.
In any case, if in denying the petition the administration does resort to WTO regulations, it will serve to dramatize how the WTO discriminates against working people and why the U.S. government must work seriously for immediate reform.
Answering the Slur of 'Protectionism'
In the petition it filed on Mar. 16, the AFL-CIO declares: "The purpose of the [proposed] trade remedies is not protectionist. They are, rather, intended to bring about positive change for China's workers and to ensure that global competition is fair for workers everywhere."
Still, critics are sure to call the AFL-CIO "protectionist," as Columnist Harold Meyerson points out in a Mar. 17 Washington Post op-ed piece. Meyerson then adds:
"If it's protectionist to demand that millions of Chinese women have the right to leave their jobs and apply for better ones, or to unionize their workplace or be allowed at least one day off a year, if it's protectionist to demand that U.S. workers not lose their jobs because they cannot work as cheaply as those repressed Chinese workers, then the AFL-CIO should absolutely plead guilty.
"What I'd like to hear from the critics -- and from George Bush -- is why they're protecting the deal between U.S. corporations and China's neo-Stalinist state to extract profits for them both at the expense of tens of millions desperate young women."
Trade Pact Flawed: Human Rights Watch
Organizations other than the labor movement are critiquing U.S. trade policy. Early in March, after analyzing the weighty text of the proposed U.S.-Central American Free Trade Agreement (CAFTA), Human Rights Watch issued a seven-page briefing paper titled "CAFTA's Weak Labor Rights Protections: Why the Present Accord Should be Opposed."
"We believe that trade agreements can provide meaningful leverage to promote worker rights," the briefing paper states, "but only when meaningful, enforceable labor rights protections are built into the fabric of the agreement." In that respect CAFTA, which covers Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua, is flawed, Human Rights Watch concludes.
The basic flaw it identifies is that the agreement requires only that each country implement its existing labor laws, which are weak, and follow existing enforcement procedures, which are also weak. As a result, CAFTA "fails to require compliance with even the most basic internationally recognized labor rights norms, and specifically fails to protect women workers against discrimination."
Because CAFTA provides governments "little or no incentive to strengthen their deficient labor laws" and or to improve their weak protections against abuses, Human Rights Watch urges Congress to "withhold its support until the accord's labor provisions are improved."
Another Diagnosis of New Trade Pact
A research fellow at the Institute for International Economics (IIE), Kimberly Ann Elliott, has also undertaken the arduous task of evaluating the labor chapter of CAFTA. She, too, finds it wanting.
In a policy brief jointly published in March by the IIE and the Center for Global Development, Elliott identifies the same basic flaw that Human Rights Watch does: what she calls the "enforce-your-own-laws standard" adopted in CAFTA, as well as in two recently approved Free Trade Agreements, those with Singapore and Chile.
"The key criticism of this approach," she writes, "is that it does not include adherence to core labor standards an enforceable obligation of these agreements." In fact, she adds, this approach could induce government to weaken standards for which they do not wish to be held accountable.
'Stick of Trade Sanctions' Needed To Cope With Egregious Violations
Elliott's 11-page brief, titled "Labor Standards, Development, and CAFTA," goes well beyond analyzing the immediate problems in the Central American FTA. Like the IIE book, "Can Labor Standards Improve Under Globalization?", which she co-authored with Economist Richard B. Freeman, this brief supports both the need to improve the rights of working men and women in developing countries and the need "to retain the stick of trade sanctions to address egregious [labor] violations that are trade-related and not amenable to remedy by any other means."
At the same time, she wisely sees the need for governments "to launch programs that focus on empowering workers to protect their rights themselves." Besides unions and collective bargaining, mechanisms that she deems essential, Elliott cites these "experiments tried in Central America and elsewhere that might be worth developing":
Oodles of U.S. Support for Labor Standards -- Mostly Rhetorical
- creating fee-free hotlines for workers to bring complaints to the attention of authorities, as was reportedly done in Costa Rica with U.S. funding.
- having official or unofficial ombudsman investigate complaints, "a tool effectively employed on an ad hoc basis by the Fair Labor Assn."
- developing independent and impartial conciliation and arbitration mechanisms, following the example of Cambodia in establishing a national arbitration council with ILO advice and U.S. funding.
Elliott asks: "Is the Bush administration committed to promoting labor standards?" She raises doubts about its credibility. For example, she faults the administration for its "repeated efforts to shrink the Department of Labor's Bureau of International Labor Affairs, which funds technical assistance on labor standards," and for reducing U.S. financial support for the work of the ILO.
Incongruously, the Labor Department "awarded $6.75 million for technical assistance to the region to a Costa-Rican-based NGO that works on democracy but appears to have little experience with labor issues. Involving the ILO would have brought far greater expertise and credibility to the effort." Meantime, as Elliott notes, USTR's fact sheet on CAFTA lists "working with the ILO" as part of its strategy for improving working conditions in the region.
Want Facts To Back Up Your Opinions?
Here are some facts and figures culled from "A Fair Globalization," the report issued in February by the World Commission on the Social Dimension of Globalization:
Economic Growth. "Since 1990 global GDP growth has been slower than in previous [three] decades, the period in which globalization has been most pronounced. At the very least this outcome is at variance with the more optimistic predictions on the growth-enhancing impact of globalization."
Union Adaptation to Globalization. "For example, there are now more than 25 framework agreements between Global Union Federations and multinational corporations."
Multinational Enterprises. "Some 65,000 MNEs, with around 850,000 foreign affiliates, are the key actors behind [the growth of] global production systems. They coordinate global supply chains which link firms across countries, even local sub-contractors who work outside the formal factory system and outsource to home workers."
Growth in Intra-Firm Trade. "The MNEs are now estimated to account for two-thirds of world trade while intra-firm trade between MNEs and affiliates accounts for about one-third of world exports."
Income Inequality. "Income inequality has increased in some industrialized countries...In the United States the [income] share of this group [the top 1% of income earners] reached 17% of gross income in 2000, a level last seen in the 1920s."
Women and Globalization. "There is a growing body of evidence illustrating the ways in which substantial numbers of women have been adversely affected by globalization, both absolutely as well as in relation to men. For instance, trade liberalization has often allowed the import of subsidized agricultural products and consumer goods that have wiped out the livelihoods of women producers. The increased entry of foreign firms has often had a similar effect through, for example, displacing women from their land or out-competing them for raw materials essential to their productive activities."
If You Seek Variety in Your Browsing....
- For daily news about workers in Southeast Asia and China, and about issues affecting them, check Asian Labor News, edited by Stephen Frost, research fellow at the Southeast Asia Research Center in Hong Kong. Apart from its daily news report, the Website has an on-line database about labor in the 12-country area. Almost all the information is drawn from the media and other sources in Asia, but the Mar.18 report led with a Mar.17 Washington Post article by Harold Meyerson, "China's Workers -- And Ours," on the AFL-CIO complaint against China for its gross violations of worker rights.
- For scholarly studies of economic and social policy issues, browse the Website of the Levy Economics Institute of Bard College. Program areas include the distribution of wealth and income, the state of the U.S. and world economies, and immigration, ethnicity, and social structure.
Human Rights for Workers: Bulletin No. IX-4 March 22, 2004
Robert A. Senser, editor
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