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Friday, June 09, 2006

Unfair Trade Practices?

I don't think the administration will act on this petition, but with the dissatisfaction over the president's handling of the economy and the large decline in political support evident in polls, it must be tempting:

US urged to act against China labour practices, by Alexander Kliment, Financial Times: The AFL-CIO ... petitioned the White House on Thursday to take punitive action against China, alleging that the country’s failure to recognise international labour standards is costing the US more than 1m jobs.

The petition ... by the AFL-CIO and congressmen Benjamin Cardin and Christopher Smith, invokes a provision of US trade law that empowers the president to take retaliatory measures against foreign countries that violate trade pacts or engage in unfair trade practices. USTR action on the petition is unlikely, but the motion comes amid increasing public and congressional concern over the trade deficit with China...

While much attention has centred on China’s artificial undervaluing of its currency, the AFL-CIO petition focuses exclusively on Chinese labour practices. Pittance wages and minimal labour standards create higher profit margins that entice US firms to outsource American jobs there, it argues.

China’s “morally repugnant and economically dangerous” practices are “dragging down standards for the entire world economy”, said the AFL-CIO secretary-treasurer, Richard Trumka... The petition urges President Bush to undertake WTO-compliant retaliatory measures against China until it brings labour practices into line with international standards. Because the measures are temporary and tied to benchmarks, they are not “protectionist”, said Mark Barenberg, the Columbia Law professor who authored the document.

The petition follows a similar one filed by the AFL-CIO in 2004. The US government opted instead for letters of understanding with Beijing on improving Chinese labour laws. The Bush administration believes “a strong and growing trade relationship driven by mutual interests is the best way to encourage economic, social and political reform in China”, according to Stephen Norton, the USTR spokesman.

    Posted by on Friday, June 9, 2006 at 11:54 AM in China, Economics, International Trade, Policy, Politics | Permalink  TrackBack (0)  Comments (3)


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