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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (5183)	4/28/2004 3:50:17 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Bush rejects labor complaint on China - Wednesday, April 28, 2004 7:43:52 PM WASHINGTON (AFX) -- The Bush administration rejected a petition Wednesday from the AFL-CIO complaining that China's denial of workers' rights is an unfair trade practice under U.S. law "Accepting these petitions would take us down the path of economic isolationism, a path we would not take," said U.S. Trade Representative Robert Zoellick. Instead of siding with organized labor in a close election year, the Bush administration announced a joint U.S.-China investigation into China's labor practices Also, Treasury Secretary John Snow said he would dispatch Undersecretary John Taylor to Beijing next month to press the Chinese to drop its currency peg to the U.S. dollar. Zoellick said the labor groups' call for a 77 percent tariff on goods would "jeopardize our own growing exports to China." "We do not need to conduct a yearlong investigation to know that there are serious concerns with labor rights and working conditions in China," Zoellick said Flanked by three other top Cabinet officers, Zoellick said the administration has been addressing the issues "continuously in a constructive manner." "The AFL-CIO petition and the possible petition on currencies both seek remedies that would worsen the very problems they are trying to solve," Zoellick said. The AFL-CIO and other U.S. labor groups filed a formal petition on March 16, charging that Chinese labor practices have given China an unfair advantage in global markets, costing as many as 727,000 U.S. jobs. The administration had 45 days from the date the petition was filed to answer it The U.S. labor groups said Chinese workers' wages are between 47 percent and 86 percent lower than they would be if workers were given basic rights to organize. Lower wages mean Chinese goods cost 11 to 44 percent less than they otherwise would be China has maintained that wages are low because of an immense supply of workers. The AFL petition "is not well founded," Nicholas Lardy, an economist at the Institute for International Economics, told a congressional panel last month Administration officials said engagement, not confrontation, was the best way to reform China. Commerce Secretary Don Evans said China longs to be designated a market economy, which would give it advantages under U.S. laws. China knows what it must do to gain that status, including guaranteeing workers' rights, Evans said. "We're not about petitions -- we're about results," Evans said. "Our goal is to ensure that American companies compete on a level playing field." On Monday, Democratic challenger John Kerry promised an audience in West Virginia "a no-nonsense effort to stop illegal currency manipulation that's going in countries like China and Japan." U.S. stocks had been depressed earlier Wednesday on talk that China's red-hot economy would slow. Other U.S. interests have also charged that China is not living up to its obligations under global trade rules An alliance of business and labor groups has hired a law firm to draw up a formal petition alleging that China's manipulation of its currency gives it an unfair cost advantage. China pegs its currency 8.28 to the dollar, a level the American groups say is far below its true value, giving Chinese goods a price advantage However, the Fair Currency Alliance has not yet presented its petition to the USTR U.S.-Chinese relations had mellowed in recent months after a period of heightened tensions over its currency last year. A meeting last week of the U.S. China Joint Commission on Commerce and Trade concluded with agreements by China to crack down on intellectual property theft and to step away from a plan to impose its own standards for wireless telecommunications services. What's more, the U.S. Treasury Department concluded on April 15 that China had not manipulated its currency in a way that would require retaliation. A day earlier, the department named Ambassador Paul Speltz to head up a technical team to advise Beijing on how to move toward a more market-based currency regime fxstreet.com