Evolution Doesn’t Occur Overnight
The recent U.S.-China World Trade Organization bilateral accession agreement appears to be good for workers in both countries. I was privileged, as U.S. ambassador to China, to sign the 1979 trade agreement that provided for most-favored-nation trade status to China and have, as a private citizen, been involved with this issue for many years.
American labor has a tremendous interest in China’s trading on fair terms with the U.S. The agreement we signed with China this past November marks the largest single step ever taken toward achieving that goal. The agreement expands American jobs. And while China already enjoys WTO-based access to our economy, this agreement will open China’s economy to unprecedented levels of American exports, many of which are high-quality goods produced by high-paying jobs.
There is reason to fear unfair trade practices. Yet this agreement actually provides better protections than our existing laws allow. It stipulates 12 years of protections against market surges and provides unusually strong anti-dumping laws--which aim to counter unfairly priced imports--for 15 years.
I have, therefore, been startled by organized labor’s vociferous negative reaction to this agreement. The reality is that the U.S. as a whole benefits mightily from this historic accord. The AFL-CIO argues that nothing in this agreement demands that free trade unions be formed in China. Yet the WTO does not require this of any of its 136 member countries, and the WTO is the wrong instrument to use to achieve unionization.
We should, instead, be asking a more important question: Are Chinese workers better off with or without this agreement? The answer is that this agreement, in a variety of ways, will be enormously beneficial to Chinese workers.
On a subtle level, the changes the agreement requires of China’s economic system will work in favor of investment by Western firms and take away some of the key advantages Asian firms now enjoy in China. Every survey has demonstrated that working conditions and environmental standards in plants run by West European and North American firms are usually better than those in Asian and in indigenous Chinese firms.
The greater foreign presence also will expose Chinese workers to more ideas about organization and rights. That is perhaps one reason why almost every Chinese political dissident who has spoken out on this issue has called the U.S.-China WTO agreement good news for freedom in China.
The trade deficit with China is a troublesome one to the labor movement. We need to put it in perspective in two ways. First, if we were to block access of goods from China to the U.S., this would not increase American jobs. That is because the Chinese exports--mostly toys, tools, apparel, cheap electronics, etc.--would be produced in other low-wage countries, not in the U.S. Yet if China stopped buying from us, we would lose about 400,000 jobs, mostly high-wage.
Second, a large portion of exports from “China” are goods produced in the main in Hong Kong, Taiwan and Southeast Asia. The major components are then shipped to China for final assembly and packaging, but the entire cost of the item (often only 15% of which was contributed in China) is attributed to China’s export ledger. Exports to the U.S. from Hong Kong and Taiwan have declined over the past decade almost as fast as imports from China have increased. Yet the companies making the profits are in Hong Kong and Taiwan, and they will simply shift their operations to Vietnam or elsewhere if we close down exports from China.
Americans are broadly concerned about the rights and quality of life of Chinese citizens. My perspective on this serious issue is influenced by my experience in the U.S. In my lifetime, women were not allowed the vote, and labor was not allowed to organize. And, in my lifetime, although the law did not permit lynching, it was protected and carried out by legal officeholders. As time passed, we made progress, and I doubt if lectures or threats from foreigners would have moved things faster.
Democracy, including rights for workers, is an evolutionary process. Isolation and containment will not promote improved rights for a people. Rather, working together and from within a society will, over time, promote improved conditions. The U.S.-China WTO agreement will speed up the evolutionary process in China. American labor should support it because it is in our interests, and it is the interests of Chinese workers too.
