WASHINGTON – Organized labor asked the Bush administration on Tuesday to impose economic sanctions on China, contending that the country has violated workers' rights in order to gain trade advantages against the United States.
The request, in a trade complaint filed with U.S. Trade Representative Robert Zoellick (search), represented the latest effort by American unions to highlight what they see as unfair trade practices that have led to a record $124 billion U.S. trade deficit with China last year and the loss of thousands of U.S. factory jobs.
The petition, filed by the AFL-CIO (search) on behalf of its 13 million members, alleged that China was brutally repressing worker rights and this constituted an unfair labor practice as defined in Section 301 of Trade Act of 1974 (search).
It marked the first time that Section 301 has been used to challenge another country's worker rights practices. Zoellick will have 45 days to decide whether to take the case and launch an investigation.
The administration refused to comment on the merits of the AFL-CIO petition, but Richard Mills, a spokesman for Zoellick, said that the United States has been "a leader in promoting internationally recognized labor standards and human rights globally, especially in those countries where those standards are not fully upheld."
Mills said that the administration was "committed to aggressively enforcing our trade laws to ensure that U.S. companies can compete on a level playing field."
In Beijing, the Chinese Commerce Ministry refused comment on the petition.
AFL-CIO lawyers argue in their petition that in the area of violations of worker rights, the United States still can pursue unfair trade investigations on its own and impose sanctions rather than bringing a case before the World Trade Organization (search) to get approval to impose sanctions.
Mark Barenberg, a law professor at Columbia University who worked on the case for the AFL-CIO, said that one way to deal with violations would be to impose penalty tariffs on Chinese products and gradually remove them if China meets certain benchmarks for improving labor rights.
Barenberg said the labor federation believed China was gaining a cost advantage through the labor rights violations of between 10 percent and 77 percent.
The labor group said that many of the labor violations occurred when people traveled from rural areas to take industrial jobs in Chinese factories where their activities are strictly regulated by a system of internal passport controls.
The petition contended that these young workers, mostly female, "often step into a nightmare of 18-hour work days with no day of rest, earning meager wages that are often withheld or unpaid altogether."
Outside trade experts saw the AFL-CIO filing as an effort to duplicate the success various U.S. industries such as steel and autos have had in the past of rolling out big trade cases during election years in hopes of highlighting their grievances against various foreign countries.
"This is an election-year gambit," said Gary Hufbauer, a trade expert at the Institute for International Economics, a Washington think tank.
Last week, Zoellick told members of Congress that the administration was considering bringing its own trade case against China on a more narrow issue of the taxes that China levies on foreign-made semiconductors.
Zoellick told the Senate Finance Committee that China must honor the commitments it made to enter the WTO in 2001 by lowering its trade barriers "if support in the United States for an open market with China is to be sustained."
The administration has also been pressuring China to halt its practice of linking the value of its currency, the yuan, to the U.S. dollar. U.S. manufacturers say that this has allowed the yuan to be undervalued by as much as 40 percent against the dollar, giving Chinese goods a tremendous price advantage over American products.
Frank Vargo, an official with the National Association of Manufacturers (search), said Tuesday that the Fair Currency Alliance, a coalition of groups including NAM and the AFL-CIO, were working to prepare a Section 301 case on the currency issue, which he said should be "ready to file in the not too distant future."
Chinese officials, however, have resisted pressure by the administration to allow the yuan's value to be set by currency markets, saying that too much currency volatility could destabilize the country's fragile banking system.