Susan Schwab

The Senate on Thursday confirmed Presi­dent Bush's nomination of Susan Schwab to be U.S. Trade Representative as the AFL-CIO and two congressmen filed an unfair trade practices case against China with her office.

WASHINGTON — The Senate on Thursday confirmed Presi­dent Bush’s nomination of Susan Schwab to be U.S. Trade Representative as the AFL-CIO and two congressmen filed an unfair trade practices case against China with her office.

The complaint alleges that workers’ rights abuses in China have worsened in the two years since the union filed a similar petition that the Bush administration rejected. Among the evidence are interviews with Chinese workers in various industries, including the garment sector.

Schwab, who had been deputy USTR, was approved by unanimous consent to replace Rob Portman, whom Bush has tapped to be director of the Office of Management and Budget. Schwab likely will face mounting Congressional pressure over China’s trade practices.

“Over the past two years, the situation has grown much worse for American and Chinese workers,” Richard Trumka, secretary treasurer of the AFL-CIO, said at a news conference. “Since the rejection of the 2004 petition, the annual trade deficit with China exploded from $124 billion to $202 billion and it continues to grow. At the same time, international agencies and the U.S. State Department have documented the continuing deterioration of working conditions.”

Trumka said the enforcement of wage, overtime, safety and health, as well as environmental laws, is “nonexistent and demonstrations are brutally suppressed.”

The labor federation, along with Reps. Benjamin Cardin (D., Md.) and Christopher Smith (R., N.J.), filed the petition under the Trade Act of 1974, alleging that China represses workers’ rights, which in turn drives down wages by 47.4 percent to 85.6 percent and lowers the price of exports by 10.6 percent to 43.6 percent. These factors were said to have contributed to the loss of an estimated 930,000 U.S. manufacturing jobs and 1.2 million total U.S. jobs.

Cardin said the Bush administration “missed an opportunity” two years ago when it rejected the AFL-CIO’s first petition.

“The administration said, ‘We will deal with the issue and we will take appropriate action to make sure that China adheres to international labor standards,'” Cardin said. “It’s two years later and the numbers are in…and we’ve made no progress. In fact, we’ve moved in the wrong direction and the situation today is much more critical for workers in China and for the workers in the United States.”

This story first appeared in the June 9, 2006 issue of WWD. Subscribe Today.

The new petition calls on the administration to impose trade sanctions on China ranging from 10 to 77 percent on exports to offset price suppression that the administration could decrease in increments if China meets certain labor standard benchmarks.

Responding to the petition, a USTR spokesman said: “In our top-to-bottom review on the U.S.-China trade policy, the 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. We’ve continued our engagement with China on labor issues and we continue to seek additional cooperative mechanisms.”

The spokesman pointed to initiatives Labor Secretary Elaine Chao discussed with Chinese officials in 2004 after the administration rejected the first petition and cited four letters of understanding she obtained from her Chinese counterpart at that time to improve labor and workers’ rights. He said the U.S. has provided training in dispute resolution in labor relations, in addition to training for labor inspectors.

The Bush administration will have 45 days to determine whether to accept the AFL-CIO petition and launch an investigation. If the administration takes the case, it will have up to one year to investigate and decide on an action.

As for whether the AFL-CIO’s chances are better this time around for gaining approval from the administration on the petition, Trumka said: “If you are a betting man and you looked at the odds, it’s probably not a good bet.”

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