Bush rejects labor's call to punish China
With unusual fanfare, the Bush administration rejected on Wednesday an American labor organization's demand that China be punished for gaining trade advantages by allegedly violating the rights of workers.
Four cabinet members - Commerce Secretary Donald L. Evans, Treasury Secretary John W. Snow, Labor Secretary Elaine L. Chao and Robert B. Zoellick, the United States trade representative - held a rare joint news conference where they repeatedly berated the petition, filed last month by the AFL-CIO, as "economic isolationism."
With China routinely facing accusations of taking jobs from the United States, the decision may have political ramifications in several battleground states in the presidential campaign. The trade petition was endorsed by Senator John Kerry, the Democratic Party's presumptive nominee, who has spent this week criticizing President Bush's trade policies as failing to protect American jobs and American workers.
The A.F.L.-C.I.O. petition accused that China violated the rights of its workers and failed to enforce minimum wage laws.
When asked if the subtext of the news conference was partisan politics, Mr. Evans demurred and sidestepped the question. "We've always been very clear that free, fair and open trade is important for the American economy," he answered.
Business leaders were pleased with the administration's decision.
Tom Donahue, the president of the Chamber of Commerce, said that workers' rights should never be included in trade agreements.
"Had the administration accepted the petition, there would have been a number of negative consequences." Mr. Donahue said. "We would have married forever human rights and trade, and that would have been a huge mistake."
But union leaders expressed dismay. "President Bush proves himself to be, once again, the servant of his corporate donors," said John J. Sweeney, president of the A.F.L.-C.I.O. "It is the multinational corporations who benefit from the artificially low wages and violated rights of Chinese workers."
Mark Levinson, the chief economist of Unite, the apparel union, said that the administration's action underscored a clear division between big business and labor that could help the Kerry campaign.
"The concern out there about losing jobs is big," Mr. Levinson said. "The signal this sends to China and any other country is they can do whatever they want to cut labor costs, even if it hurts American jobs and American competitiveness."
Ms. Chao said that rather than condoning China's labor policies, the United States had agreed to a new effort with China to ensure that it met its international labor commitments.
Mr. Evans said that "good, high-paying American jobs depend on trade with China."
The administration officials said that if China cooperated in this effort to improve labor rights and moved toward a more flexible currency exchange, the United States would consider designating China a market economy - an elevation in its trade status that would include measures like protecting it from the current high penalties it faces in antidumping trade cases.
"The tool we have is the designation of China as a market economy," Mr. Evans said.
Representative Sander M. Levin, Democrat of Michigan, said that argument was "lame."
"They can't seriously believe that China will give their workers the freedom of association and the right to collective bargaining in exchange for being eligible to be called a market economy," Mr. Levin said. "I call that a callous disregard for workers in China."
The administration officials also said they would reject a proposed trade petition by a coalition of American manufacturers making a similar complaint about China's currency rates. The manufacturers argue that by pegging its currency to the dollar, China is keeping the prices of its exports artificially low, to the disadvantage of American companies.
Mr. Zoellick, the trade representative, did not reject the A.F.L.-C.I.O. petition's contentions that China represses workers' rights. But he said the administration preferred a cooperative approach.
"Accepting these petitions would take us down the path of economic isolationism, and that is a path we will not take," he said. Critics point out that Mr. Zoellick's office has often filed what they see as similar petitions, seeking action against countries to protect intellectual property rights, for example. The A.F.L-C.I.O. petition was the first case brought under the Trade Act of 1974 that seeks penalties for violations of workers' rights.
Peter Morici, a professor of international business at the University of Maryland, said the petition made a strong case by seeking enforcement of international labor standards and not those of the United States.
"The labor complaint is something China and its lawyers should worry about," Professor Morici said.