U.S. labor may press Obama for China sanctions

WASHINGTON Mon Dec 22, 2008 2:02pm EST

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WASHINGTON (Reuters) - President-elect Barack Obama may face pressure early in his administration to use the threat of trade sanctions to force China to improve conditions for workers, an American labor official said on Monday.

"We are interested in resubmitting the China workers rights case," and expect to raise the issue with the incoming U.S. team early in 2009, Thea Lee, policy director of the AFL-CIO labor federation, told Reuters.

The United States' largest labor organization filed a petition in March 2004 and again in June 2006 asking the Bush administration to investigate whether China's "persistent denial of basic workers rights" gives it an unfair trade advantage that warrants U.S. sanctions in response.

The Bush administration rejected both requests and three other petitions filed by U.S. lawmakers in 2004, 2005 and 2007, which asked for an investigation into whether China was manipulating its currency to give its exporters and importers an illegal advantage under World Trade Organization rules.

During his presidential campaign, Obama criticized China on currency and workers rights and promised to be tougher than President George W. Bush.

"China's human rights violations and failure to enforce labor, environment and meaningful product safety standards are unacceptable," Obama told the Ohio Conference on Fair Trade this year. "Unlike our current president, I will take trade enforcement seriously."

Former Dallas Mayor Ron Kirk, Obama's pick to be U.S. trade representative, also promised on Friday to focus on workers rights.

"He knows there is nothing inconsistent about standing up for free trade and standing up for American workers," Obama said, promising also not to sign any new trade pacts unless they have enforceable labor and environmental provisions.

The AFL-CIO estimated in its 2006 petition that Chinese exports had a 43 percent cost advantage over U.S. exports, which they blamed for the loss of 973,000 U.S. manufacturing jobs and about 260,000 in other sectors.

The labor group asked the Bush administration to impose "WTO-consistent trade remedies .... (that) would create a powerful, positive incentive for corporations and the Chinese governments to improve the plight of China's workers."

Lee said, "The U.S. government needs to signal that this is a priority. ... We're not completely wedded to one particular approach, but we do want to see some attention to the egregious violation of worker rights in one of our main trading partners."

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