The Office of the United States Trade Representative today announced that the United States Trade Representative has decided not to accept a Section 301 petition on Chinese workers’ rights filed by the AFL-CIO. The petition is similar to a petition filed in April 2004.
"As we explained in April 2004 when we rejected a similar Section 301 petition on China’s labor practices, we do not need to conduct a year-long investigation to know that there are serious concerns with labor rights and working conditions in China," said USTR spokesman Sean Spicer.
"Clearly China has much more to do in the area of labor rights, and we will keep up the pressure on China to do so, using the most effective mechanisms available. A Section 301 investigation will neither shed more light on this problem nor lead to a more effective approach for addressing Chinese workers’ rights and labor conditions," Spicer added.
The United States Government has addressed, and will continue to address, labor issues with China in various fora and will continue to utilize leverage to secure improvements in China’s labor regime. While there remains much room for improvement, there is evidence of real progress. For example, wage rates in China are rising, and China has enhanced labor inspections as a result of U.S. engagement.
"The U.S. Government has been addressing China labor issues directly through the efforts of several agencies. We will continue to engage China and provide technical cooperation to further advance labor laws and workplace protections," Spicer stated.
Background: U.S. Government Efforts to Address China’s Labor Practices
The Bush Administration has pushed China to establish and enforce labor rights, and to ensure basic workplace protections for Chinese workers. Multiple agencies within the Administration have employed a variety of tools to achieve these objectives, including:
U.S. Department of Labor Programs. The Department of Labor (DOL) is seeking to advance labor rights in China through a number of programs. DOL has assisted China in improving labor legislation, in educating workers about labor standards, and in improving worker safety and reducing fatalities and injuries. In recent years, DOL has provided nearly $10 million for labor law and workplace safety and education projects in China, resulting in, among other things, safety training for mine workers, the first comprehensive baseline surveys on labor dispute resolution in China, and training, counseling, and legal aid for migrant workers in China. As a result of DOL’s coal mine safety project, the injury rate for participating mines has been cut by 66 percent, and continues to show improvement. Further, over the past two years, DOL has held frequent exchanges for labor experts to share best practices about wage and hour issues, private pension oversight, occupational safety and health, and mine safety and health. Finally, DOL has supported efforts by the International Labor Organization to encourage China to comply with core labor standards.
These efforts are producing results. China enacted regulations in 2004 giving labor inspectors significant new powers, such as the right to enter a workplace unannounced, the right to inspect books and records, and the right to interview workers. China has improved the quality of labor inspectors and starting next year is expected to utilize training materials for inspectors that DOL prepared through its Rule of Law project. China also is revising its dispute resolution system and signed an MOU with Federal Mediation and Conciliation Service in 2006 to further cooperation in this area.
- USG Pressure on Labor Issues. The USG, through the State Department, has continuously and actively pressed the Chinese Government on a range of significant labor issues. Through the Embassy in Beijing as well as in Washington, State meets with Chinese officials to urge them to implement far-reaching labor sector reforms, including dispute resolution, mediation and arbitration, and ongoing collective bargaining and contract negotiation reforms. State also funds a number of NGO programs that promote concrete labor and workplace reforms in China. These programs have focused on the rule of law, citizens’ rights, and other critical workplace issues. In addition, State uses the International Visitor Program and other visitor programs to bring Chinese officials with responsibility for labor issues to the United States to consult with our own labor experts. State most recently held educational seminars for Chinese labor researchers that examined workers’ compensation programs and other elements of the social safety net in the United States in the hope that such interaction will hasten the process of reform of China’s own labor laws.
- Commerce Department Analysis of Labor Conditions as Part of NME Determination. The United States Government has made clear to China that its labor practices will affect Commerce Department determinations whether China is a "non-market economy" (NME) for purposes of anti-dumping laws. The NME designation subjects China to a different set of antidumping standards. The Department of Commerce currently has pending before it a petition, supported by the Chinese Government, requesting review of China’s NME status. The Department’s determination will, consistent with statutory criteria, review features of China’s labor market.
Background on Labor Market in China
Economists and China experts generally agree that wages are rising in China, both in the factory sector and across the economy as a whole. Data compiled by China’s National Bureau of Statistics suggests that real wages, adjusted for inflation, rose 10-11 percent per year between 1996 and 2004.
Background on Section 301 Complaint
Section 301 of the Trade Act of 1974 authorizes USTR to investigate allegations of unfair trade practices and determine whether those practices affect U.S. commerce. On June 8, 2006, the AFL-CIO filed a petition requesting USTR to launch a one-year Section 301 investigation of workers’ rights in China. The petition – similar to a 2004 petition also filed by the AFL-CIO – also asked USTR, upon conclusion of the investigation, to impose trade remedies on China.