By  on March 1, 2007

WASHINGTON — Apparel importers who bring billions of dollars worth of clothing and textiles to the U.S. from foreign factories each year are worried about the new trade agenda of Congressional Democrats that places a premium on workers' rights and intensifies scrutiny of global sourcing.

Thousands of companies that produce clothing abroad are concerned by demands to strengthen labor provisions in trade agreements and potential sanctions against countries that violate them. They argue that sanctions could impede commerce and that industry reforms are starting to have an impact.

One proposed bill seeks to ban imported products made in "sweatshops," a designation determined by the Federal Trade Commission. The measure would define sweatshops as factories that violate core labor standards, including the right to organize and bargain collectively; the prohibition of forced labor and child labor, and acceptable working conditions with respect to a minimum wage, hours worked and occupational and safety requirements.

The House also is set to consider a bill this week that would make it easier to unionize U.S. factories and workplaces, which has polarized the industry.

Some of these proposals are not new, but they are gaining momentum since Democrats took control of Congress for the first time in 12 years.

Lawmakers are negotiating with U.S. Trade Repre­sentative Susan Schwab and other trade officials to strengthen the labor provisions in pending trade agreements as a condition for renewing President Bush's trade promotion authority, which expires June 30. Democrats have been pressing the administration to incorporate adherence to International Labor Organization standards that include abolishing slave and forced labor and recognizing the right to collective bargaining.

The fashion industry, which has spent several years developing codes of conduct and compliance programs to monitor factories for labor abuses and health and safety dangers, has growing concerns about the implications of the debate on Capitol Hill.

"I think the approach that has been taken to date is sufficient, but it is clear that the new majority in Congress is insisting on a review of this [labor standards] issue and are going to look to put in additional language in trade agreements," said Mark Jaeger, senior vice president and general counsel at Jockey International. "They just need to be careful they don't take away the incentive to engage in trade in the first place in terms of our ability to plan [production] in a country."Jaeger said the industry's own efforts to institute monitoring programs in foreign factories to improve compliance and labor conditions has been effective, although he acknowledged "there is a long way to go" in eliminating abuses.

Brad Figel, global director of government and public affairs at Nike Inc., who also heads the company's Washington lobbying office, said his concerns are not about incorporating the International Labor Organization's core labor standards in trade deals, but rather over a new enforcement mechanism.

"The question I've always had is how to decide whether core ILO conventions have been violated and who makes that judgment," Figel said. "My view is there are a lot of companies doing really impressive work on improving working conditions in factories. I would rather see debate focus on how to incentivize more companies to do that."

Organized labor and worker's rights advocates, which have more leverage with Democrats in power, argue that the industry's voluntary monitoring programs have often fallen short in eliminating abuses in individual factories, let alone entire countries. True reform, they contend, can only come from government-to-government cooperation and pressure, and a strong enforcement mechanism that would penalize a country for the abuses by rescinding trade benefits or imposing sanctions.

Workers' rights advocates pointed to recent reports of abuses in apparel factories in Jordan — a U.S. free trade partner — that prompted the Jordanian government to close factories and relocate workers as a prime example of the failure of labor provisions in existing trade deals.

Thea Lee, policy director of the AFL-CIO, said the union is pressing for stronger enforcement provisions in trade pacts than have been incorporated in seven of the Bush administration's agreements.

"Voluntary monitoring and certification seems to us inherently problematic and it does not put concerted pressure on governments to reform their labor laws," Lee said. "The U.S. needs to inflict some pain or a credible threat of economic consequences to create a strong incentive for governments to fix the problem quickly."

Charles Kernaghan, director of the National Labor Committee, which investigates human and labor rights violations and exposed the abuses in Jordan's factories, said: "Everyone we've spoken with, whether it was companies or foreign government officials, are very concerned about the Democrats regaining power and a change in the equation that labor rights will be taken more seriously. It's already having a positive impact."Kernaghan is a proponent of legislation introduced last month by Sens. Byron Dorgan (D., N.D.), Lindsey Graham (R., S.C.) and Sherrod Brown (D., Ohio) that would ban the sale in the U.S. of imported products deemed to be made in sweatshops.

"This legislation has given the first positive, proactive alternative to the current race to the bottom in the global economy, which is an enormous breakthrough," Kernaghan said. "It might take years to pass, but it is actually moving faster this year than we ever thought it would. Now the real goal is to turn to a grassroots campaign where it will not be a hard sell to people outside of the Beltway."

Dorgan recently held a hearing on the bill in subcommittee and trade groups are concerned that the legislation may gain traction or similar language could be inserted into other trade legislation.

"Their bill would have a really devastating impact on commerce, potentially," said Erik Autor, vice president of international trade at the National Retail Federation. "Conceivably, the way the bill is drafted, a small retailer could sell a polo shirt in which the cotton used to make that polo shirt is produced in Central America and workers there are not able to unionize. Under this bill, a retailer would not even have to know that, but they would be liable under the terms of the bill and so would the trucking company that delivered it and so would the ocean carrier that carried it across the ocean."

Autor said the bill, which would establish a private right of action for third parties to sue companies making apparel in factories deemed by the Federal Trade Commission as sweatshops, is so broadly written it "could grind commerce to a halt."

Jaeger of Jockey said the Dorgan legislation, while "well intentioned, presents a lot of practical concerns" for companies. "The approach of the bill seems to emphasize a [litigious] solution to the problem and that really would result in a company pulling resources away from where they are best utilized in a country to fight domestic litigation," he said.

Julia Hughes, senior vice president of international trade at the U.S. Association of Importers of Textiles & Apparel, said importers are concerned about the new legislative proposals because of their punitive nature."There is a nervousness that you have companies trying to do the right thing, on the one hand, but [punitive] words in legislative language could have a perverse impact in the wrong direction," on the other hand, Hughes said.

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