[Congressional Record (Bound Edition), Volume 150 (2004), Part 5]
[Extensions of Remarks]
[Pages 5744-5745]
[From the U.S. Government Publishing Office, www.gpo.gov]




      JOB LOSSES IN THE U.S. TIED TO HUMAN RIGHTS ABUSES IN CHINA

                                 ______
                                 

                           HON. GEORGE MILLER

                             of california

                    in the house of representatives

                        Tuesday, March 30, 2004

  Mr. GEORGE MILLER of California. Mr. Speaker, I'd like to call my 
colleagues' attention to an important development in our country's 
approach to trade. For years, businesses have recognized that markets 
only work when the rules are applied fairly to everyone. Corporations 
have pushed our government to enforce international trade law governing 
intellectual property, state subsidies, and pricing, because violations 
of these international rules hurt American businesses and American 
workers.
  Now, for the first time, workers themselves have filed a petition, 
arguing that systematic abuse of workers' rights in China have 
displaced hundreds of thousands of American jobs. This historic 
petition filed by the AFL-CIO describes how the Chinese labor system 
artificially lowers wages and brutally represses its workers, and 
therefore constitutes an unfair trade practice under Section 301(d) of 
the Trade Act because it ``burdens or restricts U.S. commerce.''
  I commend to my colleagues the following opinion piece from Harold 
Meyerson, who notes correctly that this petition could result in our 
trade law finally being applied to the benefit of workers as well as 
shareholders. In addition, the unabashedly free-trade editorial page of 
the Washington Post wrote that the ``administration should agree to 
consider [the AFL-CIO's] petition.'' Simply put: it is not 
protectionist to argue that free markets and a free economy cannot be 
based on human-rights abuses.
  For too long, American trade policy has failed to promote even 
minimum labor standards. The International Labor Organization's core 
labor standards simply articulate basic political freedoms, such as the 
freedom to associate, the abolition of forced labor, and the 
elimination of the worst forms of child labor. Unfortunately, the Bush 
administration has failed to include even these internationally-
recognized standards as a framework for trade negotiations. Yet the 
ILO's report on Central America confirms that none of the CAFTA 
countries is in compliance with basic standards of health and safety or 
freedom of association.
  If free trade is going to improve the quality of life for Americans 
without putting downward pressure on labor standards internationally, 
we must ensure that every country is playing by the same rules. I urge 
my colleagues to read the attached articles.

               [From the Washington Post, Mar. 17, 2004]

                       China's Workers--and Ours

                          (By Harold Meyerson)

       Until 10 a.m. yesterday, U.S. trade law belonged to big 
     business. Corporations routinely petitioned our government to 
     threaten other countries with sanctions if their products 
     were being knocked off or undersold by foreign manufacturers 
     with state subsidies, and our government frequently complied. 
     The solicitude the Bush White House and its predecessors 
     showed for shareholders, however, was nowhere in evidence for 
     workers. Profits depressed by unfair trade practices were an 
     official object of concern; wages and employment levels 
     depressed by unfair trade practices were none of the 
     government's business.
       This double standard was the heart of modern trade policy. 
     Yesterday morning, that began to change. For the first time 
     ever, the AFL-CIO filed the kind of unfair-trade petition 
     that corporations commonly file, alleging that China's 
     repression of workers' rights has displaced at minimum 
     727,000 U.S. jobs, and calling on the President to threaten 
     China with tariffs until it stops artificially lowering its 
     workers' wages.
       The idea that our trade statutes protect American workers 
     from competition with repressed workforces overseas will 
     surprise just about everybody, but in fact, these laws were 
     enacted by Congress in the 1980s and signed by Ronald Reagan. 
     For the past 15 years, unions have taken no action under the 
     laws, because the U.S. job losses were hard to quantify.
       Over the past year, however, Mark Barenberg, a Columbia 
     University law professor, and Mark Levinson, chief economist 
     for UNITE (the clothing and textile union), concluded that 
     changes in the global economy were so huge that such a 
     calculation was now possible--and necessary. In particular, 
     there was the loss of nearly 3 million U.S. manufacturing 
     jobs over the past 3 years, the concurrent explosion of 
     Chinese manufacturing, the ballooning of the U.S. trade 
     deficit with China and the abundant if largely ignored 
     documentation of China's semi-Stalinist labor system. All 
     these things combined to make a trade-law appeal on behalf of 
     U.S. workers eminently plausible.
       The 103-page AFL-CIO petition runs through an array of 
     statistical analyses to come up with its figure of 727,000 
     displaced American manufacturing jobs. But its foremost 
     achievement may be to encapsulate the vast literature that 
     describes the part-feudal, part-communist labor system in 
     which Chinese peasants must labor when they go to work in 
     China's export-sector factories. Under China's hukou system 
     of household registration, citizens must live and work in the 
     place where they are permanently registered, normally their 
     place of birth. Every household is designated as rural or 
     urban, a distinction on which a caste system has been 
     erected.
       Urban workers are free to apply for and leave jobs; they 
     are entitled to state housing and pensions. Rural workers, 
     however, need state permission to seek work in towns and 
     factories. Once employed, they enter a bonded-labor 
     arrangement in which they cannot quit unless they can pay 
     their employer an amount plainly beyond their means. The 
     hukou system forbids them to compete with urban workers for 
     higher paying jobs, and migrant workers without jobs are 
     subject to arrest by the state's public security bureau.
       By state design, then, these workers have no power to 
     affect their conditions of work. Though productivity in China 
     has skyrocketed, they are routinely paid rural-level 
     subsistence wages--as little as 15 to 30 cents an hour--when 
     they are paid at all. Employers tend to recruit childless, 
     young, single women, whom they pack into cement-block 
     dormitories to which the women are commonly restricted when 
     they're not on the factory floor. They cannot leave. They 
     organize at the peril of imprisonment or torture.
       China has 160 million workers in manufacturing and mining, 
     nearly 12 times the U.S. total. The Organization for Economic 
     Cooperation and Development estimates that 20 million 
     peasants will enter the urban workforce every year for the 
     next 20 years. This is, make no mistake, the planet's 
     proletariat--and it in no way resembles the kind of free 
     labor force we take for granted in the United States. Those 
     U.S.-based corporations that invest in Chinese factories--a 
     long list headed by Wal-Mart--owe some nice chunk of their 
     profits to a workforce toiling, to resurrect a line from Mao, 
     under ``the barrel of a gun.''
       Critics will doubtless call the AFL-CIO ``protectionist'' 
     for filing this petition. And

[[Page 5745]]

     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 these repressed Chinese workers, then the AFL-CIO 
     should absolutely plead guilty. What I'd like to hear from 
     the critics--and from George W. 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 of desperate young women.
                                  ____


               [From the Washington Post, Mar. 22, 2004]

                         Trade and Labor Rights

       The Ethical basis of free markets is that they reflect 
     free, individual choices. Workers may be paid little, but if 
     they sign up for jobs voluntarily, then those jobs must be 
     the best options available. Removing those jobs, for example, 
     by closing factories on the grounds that they are 
     ``sweatshops,'' will make workers' lives worse. But what if 
     the workers' choices are not free--what if workers are locked 
     up in factory dormitories and brutalized when they protest? 
     In that case capitalism has lost its ethical foundation. 
     Capitalism may remain a wonderful engine of economic growth, 
     and growth in the long term tends to bring freedom. But in 
     the meantime it will not be just.
       This is why the trade complaint against China, filed by the 
     AFL-CIO last week, deserves qualified sympathy. China's 
     police state abuses workers, who sometimes go unpaid and then 
     get beaten up when they demand what is owed to them; it has 
     punished labor leaders with harsh prison sentences handed 
     down after fake trials. The AFL-CIO is right that such 
     treatment violates the principle that free economics should 
     be rooted in free politics. If the effect of the petition is 
     to goad the U.S. government into protesting human-rights 
     abuses in China, it will be constructive.
       But the unions' ambitions go beyond that. Their petition 
     demands that the Bush administration punish China with trade 
     sanctions, arguing that Chinese abuses drive down wages and 
     increase the competitive pressure on American workers. In 
     fact, ending abuses in China would not save many American 
     jobs. China has 800 million people living in the countryside, 
     where underemployment afflicts one in three workers; for 
     these people, wages of $2 a day represent an attractive 
     income. Market forces, not denial of workers' rights, are 
     overwhelmingly the main reason for China's low wages.
       Still, China's abusive labor practices are abhorrent, so 
     one can agree with the unions' objective without accepting 
     their supporting argument. The question is whether trade 
     sanctions are the right way to help Chinese workers. 
     Sanctions can sometimes work, especially if their aim is to 
     extract specific concessions: that certain prisoners be 
     released, for example, or that a particular labor practice be 
     stopped. The unions' demand is that China set up an 
     administrative system to enforce labor rights throughout its 
     vast manufacturing sector. That might prove more than the 
     communist regime can stomach, in which case the trade 
     sanctions would disrupt trade without improving labor 
     rights--retarding the economic progress that may bring 
     political freedom in the long run.
       The Bush administration must decide whether to consider the 
     petition and what sanctions if any to apply. If it accepted 
     the idea of imposing trade penalties on China, the Chinese 
     would likely appeal to the World Trade Organization's 
     arbitration panel, and the appeal might well be successful, 
     forcing the United States to lift its sanctions. If, on the 
     other hand, the panel sided with the United States, the WTO 
     would for the first time have imposed on its members a duty 
     to protect labor standards.
       Would this be a good thing? Yes, provided that these labor 
     standards governed basic political freedoms rather than 
     mandating minimum wages or even minimum standards of safety. 
     Imposing economic regulation on poor countries would harm 
     poor workers by destroying their jobs. But even if the new 
     standards were reasonable, they might cause a backlash from 
     developing countries, which regard external imposition of 
     labor standards as protectionism in disguise. If developing 
     countries withdrew from the WTO as a consequence, trade would 
     be disrupted, and workers would suffer once again.
       In short, if trade is used as a lever to promote a 
     revolution in international labor rights, the lever will 
     break. Still, the unions are pursuing a good cause, and the 
     administration should agree to consider their petition. 
     Here's a small proposal: To allay poor countries' fears of 
     disguised protectionism, the United States should couple 
     measured promotion of labor rights with bigger cuts in U.S. 
     tariffs on products such as textiles and sugar. That would 
     displease some U.S. unions and businesses, but it would 
     further the interests of the world's poorest workers.

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