Furor Grows Over China: AFL-CIO Files 301 Claim With More in the Wings

The election-year debate over the outsourcing of U.S. jobs just got more intense — and the apparel industry is taking center stage.

WASHINGTON — The election-year debate over the outsourcing of U.S. jobs just got more intense — and the apparel industry is taking center stage.

Fueling the flames was Tuesday’s filing against China by the AFL-CIO of a petition under Section 301 of the Trade Act of 1974 with the Office of the U.S. Trade Representative, marking the first time such a case has been used to challenge another country’s labor laws.

And that’s not all — a coalition of manufacturing trade associations, including the National Association of Manufacturers and the American Textile Manufacturers Institute, plans to file a second Section 301 case in two weeks. That petition will focus on China’s alleged currency manipulation. The ATMI claims China devalues its currency by as much as 40 percent, resulting in substantially lower retail prices.

Until now, only U.S. businesses have used Section 301, and then only against unfair commercial practices such as failure to enforce intellectual property rights of investors, according to the AFL-CIO.

The AFL-CIO, the nation’s largest labor union with 13 million members, alleged in its petition that China represses workers’ rights, which in turn drives down wages by 47.4 to 85.6 percent, lowers the price of exports by 10.6 to 43.6 percent and ultimately results in the loss of U.S. manufacturing jobs. Since President Bush took office in January 2001, the U.S. has lost 2.8 million manufacturing jobs, and the number of manufacturing jobs in the U.S. has now declined for 43 consecutive months.

“One of the causes of this job loss is a global trading system that fails to protect workers’ rights, and it translates into a powerful inducement for capital flight, overseas production by U.S. industries and loss of market share by domestic producers,” said Richard L. Trumka, secretary-treasurer of the AFL-CIO, at a press conference here. “We’re taking this action because the Chinese government’s persistent pattern of violating international standards of workers’ rights is inflicting great hardship on working families in both our countries.”

Responding to the petition, a USTR spokeswoman said it would be “inappropriate to comment” until officials have had time to review it thoroughly.

“The U.S. is a leader in promoting internationally recognized labor standards and human rights globally, especially in countries where those standards are not fully upheld,” the USTR spokeswoman said. “We are committed to aggressively enforcing our trade laws to ensure that U.S. companies can compete on a level playing field.”
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