[Extensions of Remarks]
[Pages E480-E481]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

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

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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 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.
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[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

[[Page E481]]

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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