The AFL-CIO, America’s biggest trade-union federation, is petitioning the Bush administration to impose economic sanctions against China for violations of workers’ rights. The unions claim that the exploitation of Chinese workers is not only morally repugnant, but also economically damaging, alleging that it has cost 1.2 million US workers their jobs. They say this amounts to an unfair trade practice to which the US should respond with trade sanctions against China. But their proposed solution is as wrong-headed as their analysis of the problem.
Issue one: Are Chinese workers exploited? No doubt many are – not because they are paid a pittance by Western standards, nor because labour standards in China are lower, but because human-rights violations in China are commonplace. Even so, factory wages are rising fast and Chinese workers are generally richer and freer than five, ten or twenty years ago.
Issue two: Would imposing trade sanctions help Chinese workers? Clearly not. China is too big to be bullied into improving its respect for human rights, but curbing Chinese exports to the US would surely harm the workers who produce them.
Issue three: Is there anything else Americans could do to help Chinese workers? Apart from buying Chinese products, which raises Chinese living standards, not much. The US government can put political pressure on China over human rights, as can groups such as Amnesty International, but this has only a limited impact. Ultimately, in a huge country like China, pressure for reform mostly has to come from within. This may take decades, but there is every reason to believe that as the Chinese get richer they will demand to be freer too – and that the Communist Party will eventually have to succumb to their demands.
Issue four: What about American jobs? The US unemployment rate is a mere 4.6%, so jobs are hardly disappearing because of trade with China. New jobs replace the ones that are lost. The transition from old jobs to new can be traumatic in the US, because it lacks an adequate social safety net – but that is a reason for the government to cushion the blow of adjusting and help workers retrain and find new jobs, not limit international trade. After all, Americans gain a lot from trade with China: cheaper imports, lower interest rates and higher economic growth. The AFL-CIO should be campaigning for more active labour-market policies domestically, not damaging trade sanctions that would harm those they purport to help.