Bush Administration Rejects China Challenges

By John S. McClenahen In unusually blunt language, the Bush administration has rejected attempts by organized labor and some U.S. businesses to force China to change its worker and currency policies. U.S. Trade Representative Robert B. Zoellick announced on April 28 that the administration would not accept a March 16 Section 301 petition from the AFL-CIO seeking trade remedies on China to offset cost advantages stemming from alleged repression of workers' rights. Nor, he and other officials indicated, would the administration accept a Section 301 petition that has been in preparation for the Fair Currency Alliance, a coalition that includes the National Association of Manufacturers. That petition had been expected to seek trade sanctions to force China to let its currency rise in value. Section 301 of the 1974 Trade Act allows the U.S. to take action against foreign countries for violating U.S. rights under trade agreements or engaging in practices that harm U.S. trade. "We do not need to conduct a year-long investigation to know that there are serious concerns with labor rights and working conditions in China, as there are in many other developing countries," Zoellick said. "We do not need a year-long investigation to know we have serious concerns with China's policies on the value of its currency." "The real question is: How can we best change those practices?" said Zoellick. "This administration believes that trade and economic growth -- combined with the use of leverage to pursue mutual interests under agreed international rules -- will move China faster and further toward achieving real results than a retreat into economic isolationism and the raising of barriers that block trade." He added, "The AFL-CIO petition, and the possible petition on currency issues, both seek remedies that would worsen the very problems they are trying to solve." The administration's rejection of the AFL-CIO petition "shows decisively that this administration will only enforce U.S. trade laws when corporate profits and concerns are at stake but will not go to bat to protect the fundamental human rights of workers," charged John J. Sweeney, the labor federation's president. Meanwhile, the currency alliance is "taking a few days to have further discussions" with the Bush administration, says Patricia Mears, the group's executive director. "I don't think the group is going to give up their desire for having the Chinese currency reflect a closer-to-market value. So I think we need to decide where we go."

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