When Barack Obama took office, some of China’s official “America Watchers” openly worried that the U.S. would start hammering China over the question of labor rights. This has been a longstanding issue between the two countries. For many years, American unions have been critical of China for not honoring two of the core International Labor Organization (ILO) labor rights conventions—freedom of association and the freedom to collectively bargain. Some American trade unions persistently wanted to threaten China with trade sanctions. A worry among Chinese officials and their advisors was that the incoming Obama administration, being closer to American labor than the Bush administration had been, would threaten to wield this big stick.1

For the past few decades, American unions (and the trade unions of some other countries in the developed world) almost invariably linked labor rights with trade. This started during the Cold War when the U.S. was vehemently anti-Communist. American unions refused to have any relationship with the official Chinese government-organized All-China Federation of Trade Unions (ACFTU) on the grounds that it was no more than an arm of the Communists. In a bipolar world of capitalism versus communism, Western nations linked human rights with trade—but since the communist countries had limited trade with Western nations, the Chinese did not deem this mindset a major problem.

It emerged as a more contentious issue after the post-socialist and still-socialist states integrated their economies with the so-called “free” world. In the U.S., the thick volumes of annual congressional Country Reports on Human Rights contain a section on labor rights. In the late 1990s, the world’s nations were caught up in a debate over the inclusion of a social clause in the World Trade Organization’s charter, which was a roundabout way of linking labor rights with trade.2 At about the same time, a vehement debate was brewing in the U.S. over whether China should be granted permanent normal trade relations (PNTR) status, which is a U.S. trade instrument that puts conditions on human and labor rights. In 2004, the AFL-CIO played a leading role in arguing against giving PNTR to China. That same year, the AFL-CIO took an aggressive stance and filed a trade complaint—known as a section 301 petition—against China’s appalling labor conditions (particularly within the country’s export sector) on the grounds that they led to unfair trade competition.3 The case was rejected by the Bush administration. The AFL-CIO tried again in 2006, only to be rejected once more.

In the first year of the Obama administration, a showdown over trade sanctions appeared imminent. First came America’s September 2009 imposition of a 35 percent tariff on Chinese auto tires. China quickly responded by announcing an anti-dumping investigation into America’s poultry-parts exports to China (particularly affected would be chicken feet, a delicacy in China). 4

It was widely reported that the tariff on tires, which sparked this tit-for-tat, was Obama’s response to pressure from the United Steelworkers. The American action invoked what is known as a “safeguard provision” to help protect an American industry encountering the threat of a sudden surge of imports. The Chinese dumping investigation had to do with selling chicken feet to China below cost.5 But notably, the instruments used by both countries were protectionist in nature, without bringing up labor rights. Thus, although Obama’s move to raise tariffs on Chinese tires was interpreted as, finally, a victory for the American unions—in that the tariffs have succeeded in blocking Chinese imports at a time of high unemployment—labor rights and trade have become de-coupled.

This turn of events can be traced back to 1994 when President Bill Clinton de-linked labor rights and trade considerations in the debate over giving China most favored nation (MFN) status.6 Since then, while still holding high the human rights and labor rights banner, all deployments using MFN or PNTR as tools by anti-China trade lobbies have been defeated. As noted, the Bush administration rejected outright the AFL-CIO’s two 301 petitions.

Since Obama came to office, the human rights issue has continued to be downgraded. To be sure, the U.S. government and the American media have not ceased criticizing China for its violations of human and labor rights, but these criticisms do not carry any real threat of trade sanctions. Any barring of Chinese exports has resulted from successful anti-dumping complaints or, as seen recently, the use of the “safeguard” measures to protect American jobs, confirming that economic and employment concerns drive the political agenda. It is not a coincidence that the United Steelworkers is the union that filed the “safeguard” complaint. Known to be a pragmatist, Leo W. Gerard, the union’s president, did not consider it necessary to beat around the bush.7

The shift away from the labor rights agenda reflects the global context of the last two decades. The world underwent a revolutionary change with the fall of the Communist regimes in the U.S.S.R. and Eastern Europe. With the Cold War having ended,8 it became increasingly unconvincing for American trade unions to sustain the use of Cold War rhetoric even for a “communist” country like China that was opening up to foreign investment, instituting economic reforms, operating like a market economy, and liberalizing, all while keeping its political system intact.

Within China, faced with a runaway market economy, the leadership of the ACFTU has put some effort into securing “labor protection” for Chinese workers. It has actively participated in the drafting of various labor laws that contain a pro-labor thrust. Undeniably, the ACFTU is still under the thumb of the Chinese Communist Party—but the latter’s concerns about social instability have prompted it to give the ACFTU some space, albeit limited, to alleviate labor rights violations through legal channels. Bureaucratic inertia within the ACFTU and the influence of pro-business local governments continue to hamper the official unions from representing workers’ interests at a local level. Still, with time, the ACFTU has been open to internal debates and there have been some modest improvements in its overall operations.

During the past two decades, some of the trade unions of developed countries—such as Japan, Germany, Norway, and Britain—began to engage with the ACFTU. The AFL-CIO and the ICFTU (International Confederation of Free Trade Unions)—an umbrella global union federation—remained adamantly opposed. A debate over the “China question”—to engage or not to engage with the ACFTU—preoccupied the international trade unions for years. In America, some trade union officials, labor activists, labor academics, and labor NGO officers (usually those, based on my own observations, who are critical of their own trade unions) have argued that the union movement should work with the ACFTU in order to deal more effectively with an increasingly globalized capitalism.9 Their hope is that, by setting up contacts with the ACFTU, they will be able to help it become more like a real trade union. These American labor figures have started to break ranks with the AFL-CIO’s non-engagement policy.

In this regard, the most significant step forward to date came when Andy Stern—the former president of America’s biggest union, the SEIU (Service Employees International Union)—visited the ACFTU in Beijing in 2002, as part of his strategy to set up global union alliances. He was willing to accept the ACFTU with all its warts. In the years since then, he continued to send emissaries to Beijing to maintain the relationship.

Starting in 2005, when the SEIU and four other unions formed the Change to Win (CTW) coalition and became a second U.S. union federation, one could no longer speak of a single American labor federation policy. The new CTW has been much more proactive about the ACFTU engagement issue, due in part to Andy Stern’s prior endorsement. In 2007, CTW’s leadership visited the ACFTU in what was described as a breakthrough in U.S.-China trade union relations.10

This CTW visit was followed by a signed memorandum of understanding in 2009. One of the concrete steps agreed upon includes “joint research on global companies operating in the U.S. and China, bringing workers from global companies together to share experiences with labor’s involvement in the economic recovery and practices in organizing, and developing trade policies that will advance workers’ interests.”11 This was an important development in both countries’ trade union policies—it recognized that workers of both countries have a shared interest and it encouraged them to form a united front vis-à-vis capital. The big step forward for the Americans lay in their recognition of the first principle; the big step taken by the ACFTU lies in the second. This turn of events stands in stark contrast to the American Steelworkers’ call for imposing tariffs on Chinese tires.

Another important factor that has weakened the “labor rights” argument against engagement with the ACFTU was the decline in membership of the once-strong union movement in the West. This decline has been particularly alarming among the American trade unions, whose organized membership dropped to a low of 12.4 percent of the American workforce by 2009, down from 31.4 percent in 1960.12 One explanation for this drop is that, for the past two decades, American workers have had great difficulty organizing. Procedures to set up unions have become so complicated that employers can easily apply anti-union tactics. Organizing in the right-to-work states of the South, the haven of anti-union sentiments, is a herculean task. Collective bargaining is also becoming more difficult. “The cards are stacked against workers in the United States,” said Kenneth Roth, executive director of Human Rights Watch. “The U.S. government cannot effectively press another country to improve labor standards while violating them itself. It should lead by example.”13

This reality makes it difficult for American trade union staff, who struggle to set up unions and bargain collectively, to assert that America is a moral authority that can point a finger at others for violating core labor rights. At the same time, America’s moral authority in the human rights arena lost credibility thanks to the Bush administration’s redefinition of torture and pain. While this should have undermined the righteousness and superiority complex of the American unions, it has not been easy for American labor to become self-reflectively critical. Nonetheless, certain union spokespeople have been humbled enough to gradually drop some of their previous rhetoric.

Abetting this is China’s rise as a political and economic power. China can no longer so readily be lectured to, and the ACFTU is no longer a trade union that can be ignored.

Of course, this does not mean the Chinese authorities and the ACFTU have any less need to raise labor standards in China, seek a living wage for poor migrant workers, or introduce genuine labor representation. Workers in China’s labor-intensive private and foreignowned factories, including in the export sector, are normally exploited—they work ten- to eleven-hour days, sometimes seven days a week, often in factories with hazardous health and safety conditions, for wages that, per hour, almost always fall below China’s paltry legal minimum wage.14 The ACFTU—which, historically, was accustomed only to operating within state-owned enterprises as the welfare arm of management—has almost no notion of what it means to operate as a genuine union in a market economy, in the face of exploitative private employers. Nor is the Chinese union federation quick to adjust to new realities. The enormous problems of bureaucratic inertia and window dressing within China’s labor unions persist.

Yet China’s labor laws are surprisingly good. They would provide advantages to a union willing to engage in genuine factory-level union activity, if only the ACFTU knew enough about how to operate on the ground, and if only the local union bureaucracies cared. Within American labor circles, even in the AFL-CIO, the staff who specialize in international union affairs are aware of the potential to offer training to Chinese unionists, since a number of European unions are already doing so. As Earl Brown—who is in charge of the China section of the AFL-CIO’s international research and outreach arm, the Solidarity Center—declared in 2009:

Our labor movement can assist in enhancing the capacity of interested officers and staff of the ACFTU union and other worker rights advocacy groups to begin to step into the industrial relations roles assigned unions and workers by [China’s] 2008 laws.15

 

One instance of the ACFTU’s potential—if advice and training could provide it with knowhow—can be found in the highly publicized unionization of China’s Wal-Mart stores. In 2006, the ACFTU was able to take advantage of China’s labor laws to organize union branches at some Wal-Mart stores (often without WalMart’s prior knowledge), following genuinely democratic union elections. In less than a month, Wal-Mart capitulated and signed a memorandum with the ACFTU.16

But the Chinese union federation thereafter fell back upon its previous top-down and management-dominated manner of setting up union branches, since this is what local city union bureaucracies are used to. The local union officials asked the Wal-Mart stores’ human resources officers to select the members of the stores’ new union committees—and, for obvious reasons, the committees at these stores have almost always done Wal-Mart management’s bidding. Moreover, the ACFTU hasn’t sufficiently supported the union branches at Wal-Mart stores that had been set up the earliest, through genuine elections, where some union committees tried to challenge Wal-Mart management to obtain better working conditions.

The federation also failed to help the WalMart trade union branches collectively bargain with Wal-Mart. When the ACFTU finally signed a framework agreement with Wal-Mart in 2008, it was done in a very top-down, pro forma manner by thoroughly outmatched ACFTU negotiators, who had little experience with collective bargaining and almost no knowledge of foreign practices. The union chair at the Wal-Mart store in Nanchang, who was self-taught in legal affairs, wanted to renegotiate some sections of the collective agreement handed to him from above—which, under Chinese law, was his prerogative. But he got no support from the co-opted city-level union, nor from the ACFTU. In the end, this trade union chair—who, through Internet chat rooms, became the hero of many Wal-Mart employees throughout the country—was forced to resign from his job after two years of unrelenting skirmishes with Wal-Mart.17

What could have been a breakthrough— a chance for the ACFTU to show Chinese workers and the world that it is serious about acting like a union, a chance to provide help and support to its branches and to battle for meaningful collective agreements—in the end has come to nought. Around the world, Wal-Mart is staunchly anti-union, so much so that in the U.S. not even one union local has been established among the corporation’s thirty-four hundred superstores.18 The ACFTU succeeded in establishing union committees at Wal-Mart stores because it had the backing of the state and the Party (a Chinese arrangement that, ironically, is seen as a problem by the Americans). The ACFTU could have made better use of this backing to set up strong union branches that could confront Wal-Mart and negotiate better collective contracts. But, ultimately, the ACFTU’s inexperience, ignorance, and top-down bureaucratism prevailed. The counsel and support of foreign unions might have helped here.

Another example of the ACFTU’s halfhearted attempt to help union locals is the case of a Danish-invested electronics factory in Yantai City, Shandong Province. In 2006, the workers there fought to set up a trade union branch to improve working conditions. When management refused to recognize the union, the workers went on strike without objection from the city union. Ever since the birth of the union at this factory, management has mobilized to persecute and fire labor activists and to destroy the union branch—and, for three years, the workers fought back. The case was widely publicized and discussed in Chinese blogs and the Chinese mass media. In the beginning, the ACFTU openly supported the workers, but eventually let them fight their own battle, which led ultimately to their defeat.19 The ACFTU could have used this case, like the Wal-Mart case, to gain valuable experience in how to work with grassroots labor activists who are willing to operate within the official trade union structure. Once again, the ACFTU could have taken advantage of China’s corporatist political system to help workers.

In democracies like the U.S., trade unions have to pour in vast sums of money in order to gain enough leverage to implore politicians to pass better laws so that unions can organize workers and strike without penalty—only to suffer betrayal. The ACFTU, for its own part, can attempt to ride on the Chinese government’s fear of social instability to build a better system of labor representation. Perhaps this is just my wishful thinking—but many trade unions around the world that have opted for engagement with the ACFTU (rather than isolation) are nurturing a glimmer of hope that the ACFTU, with time, may become a genuine representative of Chinese workers. If and when that day comes, the ACFTU will no longer need to be defensive in the face of accusations that China does not abide by international labor conventions. Only when the ACFTU begins to represent workers against management and carries out real collective bargaining will the Chinese union federation be able to speak up internationally—and American unions, if they take initiatives to offer training to ACFTU unionists, might possibly help that day come to pass.

 

Notes:

1. As just one illustration, in November 2009, a Chinese government-financed think tank—the Pudong Institute for the U.S. Economy—held a conference in Shanghai entitled: “The Impact of Obama’s Labor Policy toward China.” I was invited as a keynote speaker who could address the issue from a non-Chinese perspective, and so I had an opportunity to hear the Chinese participants’ worries.
2. Anita Chan and Robert J. S. Ross, “Racing to the Bottom: Industrial Trade Without a Social Clause,” Third World Quarterly 24, no. 6 (2003): 1011-1028.
3. See “The AFL-CIO Workers’ Rights Case Against China,” available at www.aflcio.org/issues/jobseconomy/globaleconomy/chinapetition.cfm (accessed October 17, 2009).
4. Edmund L. Andrews and Edward Wong, “China Denounces New Tire Tariffs,” New York Times, September 12, 2009.
5. Clifford Krauss, “Chewy Chicken Feet May Quash a Trade War,” New York Times, September 15, 2009.
6. See “The China Trade Debate,” May 18, 2000, available at www.pbs.org/newshour/bb/asia/china/pntr/debate_intro. html.
7. “Steelworkers Union Boss Becomes a Force in Trade,” Business Week, September 23, 2009.
8. Dean Frutiger, “AFL-CIO China Policy: Labor’s New Step Forward or the Cold War Revisited?,” Labor Studies Journal 27, no. 3 (Fall 2002): 67-80.
9. For examples of pro-engagement arguments, see: Katie Quan, “Unions Need to Talk,” International Union Rights 11, no. 4 (November 19, 2004): 5; Gregory Mantsios, “Tea for Two: Chinese and U.S. Labor. A Report from China,” New Labor Forum 11, no. 3 (Fall/Winter, 2002): 61-73; and Anita Chan, “Labor in Waiting: The International Trade Union Movement and China,” New Labor Forum 11, no. 3 (Fall/Winter, 2002): 54-59.
10. See, for example, David Barboza, “Putting Aside His Past Criticisms, Teamsters’ Chief Is on Mission to China,” New York Times, May 19, 2007.
11. “Change to Win, China Trade Unions Sign First Formal Agreement,” press release, available at www.changetowin.org/for-the-media/press-releasesand-statements/change-to-win-chinatrade-unions-sign-first-formal-agreement. html.
12. U.S. Bureau of Labor Statistics, “U.S. Union Membership, 1930-1997,” available at www.thelaborers.net/AFL-CIO/employment.htm (accessed October 21, 2009).
13. Lance Compa, Unfair Advantage: Workers’ Freedom of Association in the United States under International Human Rights Standards (New York: Human Rights Watch, 2000).
14. Anita Chan and Kaxton Siu, “Analyzing Exploitation: The Mechanisms Underpinning Low Wages and Excessive Overtime in Chinese Export Factories,” Critical Asian Studies 42, no. 2 (June 2010).
15. “The Financial Crisis and the Changing Role of Workers in China,” published remarks from a June 19, 2009 roundtable discussion sponsored by the Congressional-Executive Commission on China, available at www.cecc.gov/pages/ roundtables/2009/20090619/index.php.
16. Anita Chan, “Organizing Wal-Mart in China: Two Steps Forward, One Step Back for China’s Unions,” New Labor Forum 16, no. 2 (March 2007): 87-96.
17. A detailed discussion of this WalMart union chair and his dismissal can be found in the May and September 2008 editions of the web-based China Labor News Translations and a detailed account of the Wal-Mart trade union collective agreement can be found in the online magazine’s May 2009 edition, all available at www.clntranslations.org.
18. Emek Basker, “The Causes and Consequences of Wal-Mart’s Growth,” Journal of Economic Perspectives 21, no. 3 (Summer 2007): 177–198.
19. This case is discussed in detail in the October 2008 and March 2009 editions of China Labor News Translations, available at www.clntranslations.org.

New Labor Forum 19(3): 49-50, Fall 2010
Copyright © Joseph S. Murphy Institute, CUNY
ISSN: 1095-7960/10 print, DOI: 10.4179/NLF.193.0000008