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August 15, 2013


China and other state-run economies which micromanage wages, safety, environmental and other workplace rules are results of undemocratic political takeovers. Under such state tutelage, the Chinese people have no extra-market mechanisms for managed control of their country’s corporations or other employers, either via honest trade unions or at the polls. The Chinese people have no say in how their economy is to be managed; such democratic control is unavailable to the people. Control is by state directive and state directive only via unelected commissars.

Honest trade unions in China would be bargaining for wages and working conditions but such cannot be allowed where the state (a la 1984) is in charge and trade unions are effectively banned, and if the Chinese government should announce otherwise, i.e., that trade unions may exist and bargain with their corporate employers, such is likely to be a cover to appease customers in the West. Such “unions” are likely to be mere extensions of state control or otherwise be so limited in areas where they are permitted to bargain that they are not unions at all and but mere showcases for pretended democracy.

We in this country (on a different level) are emulating the Chinese government in their total control of labor. Here our trade and regulatory policies have been captured by an elite, a successful and continuing capture with the assistance of ALEC and pro-Wall Street captive politicians at both state and federal levels, an effort that has managed to secure passage of “right to work” and other such bizarre anti-labor laws in several states, including some states that were formerly strong union venues (Michigan, Indiana et al.). Labor rights activists who have tried to insert “labor rights” rules in our trade pacts with those in NAFTA and WTO jurisdictions have failed on every occasion even while those proposed by the Wall Street and multinational corporations have repeatedly succeeded.

Kuttner reports that in March 2004 and again in June 2006 the AFL-CIO petitioned the U.S. Trade Representative under Section 301 of the 1974 Trade Act contending that the repressive Chinese labor system was in effect an unfair subsidy and not a form of natural comparative advantage reflecting China’s relative poverty and lower productivity. Both petitions were summarily rejected by the Bush administration. Section 301 of the Act permits retaliation against unfair trade practices. The petitions Bush rejected described China’s system as “government-engineered labor exploitation.”  The union’s contentions should have been allowed and their discussion had in trade talks with China.

So just what is it Section 301 allows or proscribes? In short, it explicitly provides that denial of basic workers’ rights is an unfair trade practice subject to remediation or retaliation. The listed basic rights are freedom of association, freedom to bargain collectively, and freedom from forced labor and child labor, as well as state-enforced minimum wages and health standards. Congress added these provisions in 1974 specifically to discourage trade advantage based on labor repression. Indeed, the Bush denial amounts to a choice not to apply these criteria to China in spite of overwhelming evidence that cry out for application. Lately, reports of compliance under Section 301 only describe efforts of our Trade  Representative’s extensive efforts to protect intellectual property – and says nothing on the subject of labor conditions, despite the mandate in U.S. law, making it clear that the elite’s interests are served but that labor’s interests remain on the back burner. Labor rights do not come up in trade talks. Why?

When the Chinese themselves suggested that labor rights should come up on a trade discussion agenda, it was the American Chamber of Commerce in China, as I set forth in an earlier part of this essay, that warned the Chinese that proposed greater rights for trade unions in China could result in slowing Western investment there. This is a clear not-so-veiled threat to Chinese commissars to leave the rights of their Chinese workforce where they are, and this is being played out in clear contravention of Section 301 of the 1974 Trade Act. It is clear that Wall Street and its multinationals like things the way they are, labor suppression and slave wages and inhumane working conditions in dangerous buildings where safety and environmental concerns are afterthoughts (only surfacing after collapse of such buildings and hundreds of deaths of workers there, which are PR disasters for Wal-Mart, The Gap and others, whose profits go up with such lethal mistreatment of labor).Our Wall Street and multinational greed mongers could not pull that off in America, even in this age of weakened unions. Our American multinationals fiercely resist the whole idea of linking trade access to labor rights (so long as they can play that game outside of America and simultaneously beat down American labor with right to work travesties here). At the behest of Wall Street and corporate America, we are deliberately neither following our own law nor enforcing its provisions in contributing to (literally) the deaths of foreign workers. Profits first!

Section 301 explicitly provides that denial of basic workers’ rights is an unfair trade practice subject to remediation or retaliation. The listed basic rights are freedom of association, freedom to bargain collectively, and freedom from forced labor and child labor, as well as state-enforced minimum wages and occupational safety and health standards. This language needs no interpretation; it sets out precisely what is an unfair trade practice and provides enforcement via tariffs, quotas and government withholding of trade licenses. We have seen that millions of Chinese children and prisoners are involved in production of goods exported to us (which probably reduces already slave wages to something even less).

Yes, we need to protect intellectual property from piracy and infringement by our trading partners, but it must be remembered that in producing tangible goods for export, capital is only one of the means of production. Without labor, capital is worthless; yet we go to great lengths to protect Wall Street capital and ignore not only Chinese labor but American labor as well (involved as they are in a race to the bottom occasioned by competition with slave wage regimens overseas). The playing field is badly tilted, tilted so badly that now we import (without tariffs or quotas) goods produced by children and jailbirds in clear violation of Section 301 of the 1974 Trade Act. At the behest of big capital (Wall Street and the rich and corporate class), we are ignoring our own laws and acting inhumanely in all events. This has to stop.

At a very minimum, our Trade Representative should advise all of our trading partners that we are on the verge of setting quotas and tariffs on imported goods made by children and jailbirds. (We can get around to the other criteria in Section 301 later.) We are not following our own laws nor are we enforcing our laws when violated, all of which raises an interesting question – are we, collectively speaking, outlaws? Who do we indict?

A final question – when are we going to level this tilted playing field so that America can honestly compete in a global marketplace, because no one could win this one with the Wall Street fix in with the corrupted dice throwers in Washington and Beijing? Answer: tariffs and quotas would help.  GERALD  E


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