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Food Safety, Commercial Rule of Law, Child and Prison Labor Cited in Annual China Report

Wednesday, October 15, 2014
Sandler, Travis & Rosenberg Trade Report

The Congressional-Executive Commission on China released Oct. 9 its annual report, which reviews China’s compliance with international trade rules as well as other human rights and rule of law issues. The report identifies ten areas where U.S. legislative and executive action should be more focused, including worker rights and prison labor, commercial rule of law, food safety, press and Internet freedom, and efforts to reform population planning policies. Highlights of the commission’s findings and recommendations include the following.

Worker Rights. Chinese workers still lack the basic right to form independent trade unions, the Chinese government still fails to effectively enforce its own labor laws in many cases, and child labor and the use of prison labor in the manufacture of products for export remain serious problems. Given the high percentage of goods the United States imports from China, it is likely that products made with child or prison labor or manufactured under poor working conditions continue to enter the U.S. The report therefore recommends that the U.S. ensure effective implementation of executive orders 13126 and 13267, which are intended to combat forced or indentured child labor or trafficked labor in federal procurement and federal contracts. The report also recommends considering closing loopholes such as the consumptive demand exemption in Section 1307 of the Tariff Act of 1930 and increasing supply chain transparency so that governments, businesses and consumers can better trace the origin of products.

Food Safety. The commission held a hearing in July that highlighted ongoing concerns regarding the safety of foods imported from China and the effectiveness of the current country-of-origin labeling system in notifying consumers when a product has been made in China. The commission later learned that China continues to delay the granting of visas for additional Food and Drug Administration inspectors. The commission recommends greater action to secure these visas and to improve U.S. inspection capabilities in China.

Commercial Rule of Law. The report notes little progress in China’s compliance with international trading obligations, stating that China continues to control its currency, to subsidize and give preferential treatment to state-owned enterprises and domestic companies at the expense of U.S. businesses and workers, to aid or abet intellectual property theft through cyber and other means, and to provide little transparency regarding Chinese companies, state subsidies, and commercial laws and regulations. There were reports of growing concern that foreign companies were being unfairly targeted, especially for antimonopoly investigations. The report recommends ensuring that China makes concrete improvements in ending currency controls, subsidies for state-owned enterprises and other policies that violate China’s existing international trading obligations as a condition for progress in any U.S. trade-related negotiations with China. The report also recommends that the U.S. government more comprehensively track and make publicly accessible China’s trade commitments under the World Trade Organization, the U.S.-China Strategic and Economic Dialogue and the Joint Commission on Commerce and Trade as well as U.S. efforts to secure China’s compliance with those commitments.

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