In prior posts I have reviewed how concerns over perceived human rights abuses (particularly forced labor) have trade implications. See, e.g., April 27, 2021: WTO and forced labor in cotton — Commentary by Amb. Dennis Shea, former Deputy U.S. Trade Representative, https://currentthoughtsontrade.com/2021/04/27/wto-and-forced-labor-in-cotton-commentary-by-amb-dennis-shea-former-deputy-u-s-trade-representative/; March 24, 2021: When human rights violations create trade distortions — the case of China’s treatment of the Uyghurs in Xinjiang, https://currentthoughtsontrade.com/2021/03/24/when-human-rights-violations-create-trade-distortions-the-case-of-chinas-treatment-of-the-uyghurs-in-xinjiang/; January 25, 2021: Child labor and forced labor in cotton production — is there a current WTO mandate to identify and quantify the distortive effects?, https://currentthoughtsontrade.com/2021/01/25/child-labor-and-forced-labor-in-cotton-production-is-there-a-current-wto-mandate-to-identify-and-quantify-the-distortive-effects/; January 24, 2021: Forced labor and child labor – a continued major distortion in international trade for some products, https://currentthoughtsontrade.com/2021/01/24/forced-labor-and-child-labor-a-continued-major-distortion-in-international-trade-for-some-products/.
There have been a number of reports generated by various groups over the years on the depth of the human rights problems in China’s Xinjiang Uyghur Autonomous Region and the treatment of ethnic minorities — particularly the Uyghurs. See, e.g., Australian Strategic Policy Institute and International Cyber Policy Centre, Uyghurs for sale, ‘Re-education’, forced labour and surveillance beyond Xinjiang (authors Vicky Xiuzhong Xu with Danielle Cave, Dr James Leibold, Kelsey Munro, Nathan Ruser), Policy Brief Report No. 26/2020, https://ad-aspi.s3.ap-southeast-2.amazonaws.com/2021-10/Uyghurs%20for%20sale%2020OCT21.pdf?VersionId=zlRFV8AtLg1ITtRpzBm7ZcfnHKm6Z0Ys.
The U.S. State Department releases an annual report on Human Rights issues in other countries, including China. The 2020 report on China contains the following excerpts relevant to the human rights concerns in the Xinjiang Region and the question of forced labor.
“CHINA 2020 HUMAN RIGHTS REPORT
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“Genocide and crimes against humanity occurred during the year against the predominantly Muslim Uyghurs and other ethnic and religious minority groups in Xinjiang. These crimes were continuing and included: the arbitrary imprisonment or other severe deprivation of physical liberty of more than one million civilians; forced sterilization, coerced abortions, and more restrictive application of China’s birth control policies; rape; torture of a large number of those arbitrarily detained; forced labor; and the imposition of draconian restrictions on freedom of religion or belief, freedom of expression, and freedom of movement.
“Significant human rights issues included: arbitrary or unlawful killings by the government; forced disappearances by the government; torture by the government; harsh and life-threatening prison and detention conditions; arbitrary detention by the government, including the mass detention of more than one million Uyghurs and other members of predominantly Muslim minority groups in extrajudicial internment camps and an additional two million subjected to daytime-only ‘re-education’ training; political prisoners; politically motivated reprisal against individuals outside the country; the lack of an independent judiciary and Communist Party control over the judicial and legal system; arbitrary interference with privacy; pervasive and intrusive technical surveillance and monitoring; serious restrictions on free expression, the press, and the internet, including physical attacks on and criminal prosecution of journalists, lawyers, writers, bloggers, dissidents, petitioners, and others as well as their family members, and censorship and site blocking; interference with the rights of peaceful assembly and freedom of association, including overly restrictive laws that apply to foreign and domestic nongovernmental organizations; severe restrictions and suppression of religious freedom; substantial restrictions on freedom of movement; refoulement of asylum seekers to North Korea, where they have a well founded fear of persecution; the inability of citizens to choose their government; restrictions on political participation; serious acts of corruption; forced sterilization and coerced abortions; forced labor and trafficking in persons; severe restrictions on labor rights, including a ban on workers organizing or joining unions of their own choosing; and child labor.
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“Section 7. Workers’ Rights
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“b. Prohibition of Forced or Compulsory Labor
“The law prohibits forced and compulsory labor. The law provides a range of penalties depending on the circumstances, including imprisonment, criminal detention, administrative blacklisting, and fines. Penalties were commensurate with those for analogous serious crimes, such as kidnapping. The law was not effectively enforced.
“The PRC used state-sponsored forced labor in detention camps, prisons, and factories in and outside Xinjiang.
“There is evidence of forced labor exacted by the use of force, threats of detention or other abusive practices against workers laboring in the camps, large industrial parks, and residential locations in Xinjiang. There are also reports of individuals ‘graduating’ from ‘vocational training centers’ and then being compelled to work at nearby facilities or sent to factories in other parts of China.
“China’s State Council issued a white paper on employment and labor rights in Xinjiang Uyghur Autonomous Region on September 17, 2020, in which it acknowledged that the Chinese Government has provided ‘vocational training’ to an average of 1.29 million workers in Xinjiang every year from 2014 to 2019.
“Xinjiang government documents indicate the existence of a large-scale PRC government plan, known as the ‘mutual pairing assistance’ program, where 19 cities and provinces, mostly in eastern China, have established factories in Xinjiang. There is significant risk that these factories are using camp labor and other exploitative labor practices.
“Persons detained in internment camps in Xinjiang (see section 6) were subjected to forced labor. The detainees worked in factories producing garments, hair accessories, and electronics and in agricultural production, notably picking and processing cotton and tomatoes. In March an Australian Strategic Policy
report stated the PRC government transferred Uyghur and other ethnic minorities from Xinjiang to technology, clothing, and automotive factories across the country; conditions for many transferred workers strongly suggested forced labor. A New York Times investigation published on April 15 stated some Chinese companies used forced labor to produce personal protective equipment. In December a Center for Global Policy report detailed the PRC’s coercive labor training and transfer schemes that led to forced labor of nearly half a million people in the Xinjiang cotton harvest.
“A December 2020 Jamestown report used evidence from public and nonpublic Chinese government and academic sources indicating that labor transfers of ethnic minorities in Xinjiang to other regions and other provinces are part of a state-run scheme to forcibly uproot them, assimilate them, and reduce their population. Using Chinese government documents, the report estimates that up to 1.6 million transferred laborers are estimated to be at risk of being subjected to forced labor as a result of the government policy that intends to ‘displace’ populations deemed ‘problematic’ by the government.
“Chinese-flagged fishing vessels subjected workers from other countries to forced labor. On August 26, an Indonesian social media outlet posted a video of three Indonesian fisherman pleading for rescue from a PRC-flagged fishing vessel. The fishermen claimed they were subjected to physical violence, forced to work 20-hour days, and not paid for their work.
“Although in 2013 the NPC officially abolished the re-education through labor system, an arbitrary system of administrative detention without judicial review, numerous media outlets and NGOs reported forced labor continued in prisons as well as drug rehabilitation facilities where individuals continued to be detained without judicial process. An August, Epoch Times article stated prison labor was used in apparel, artificial flowers, and cosmetic production in Shenyang, Liaoning. There were reports of forced labor in other provinces in the production of items such as bricks, coal, and electronics.
“Also see the Department of State’s Trafficking in Persons Report at https://www.state.gov/trafficking-in-persons-report/.”
U.S. Department of State, CHINA 2020 HUMAN RIGHTS REPORT, pages 1, 78, 81-82 (March 2021 updated in November), https://www.state.gov/reports/2020-country-reports-on-human-rights-practices/china/.
U.S. law for more than 90 years has banned the importation of goods made with forced labor. The problem of forced labor is not limited to China and the U.S. Customs and Border Protection in recent years has taken action to deny entry to imports from a number of countries of goods suspected of being made with forced labor. See, e.g., Testimony of Jennifer (JJ) Rosenbaum, JD, Executive Director, Global Labor Justice – International Labor Rights Forum, Before the House Committee on Ways and Means Subcommittee on Trade, The Global Challenge of Forced Labor in Supply Chains: Strengthening Enforcement and Protecting Workers, Wednesday July 21, 2021, https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/Witness%203%20Jennifer%20Rosenbaum%20Testimony.pdf (citing various USCBP Withhold Release Orders under Section 307 of the Tariff Act of 1930 on products from Malawi, Democratic Republic of Congo, Turkmenistan, Malaysia as well as China).
With the broader concern about the perceived extreme human rights abuses against the Uyghurs and other ethnic minorities in the Xinjiang Uyghur Autonomous Region and reports of dozens of multinationals apparently “benefitting” from forced labor of Uyghurs, Congress held hearings in 2021 and in December passed legislation directed at improving the enforcement of Section 307 of the Tariff Act of 1930 including creating a presumption of use of forced labor for products coming from Xinjiang Province. See, e.g., Inside U.S. Trade’s World Trade Online, Uyghur Forced Labor Prevention Act heads to Biden’s desk, December 16, 2021, https://insidetrade.com/daily-news/uyghur-forced-labor-prevention-act-heads-biden%E2%80%99s-desk.
The U.S. Trade Representative issued a statement on December 16th about the legislation going to the President.
“This bill represents our country’s commitment to protecting human dignity and leading the fight against forced labor. We have a moral and economic imperative to eliminate this practice from our global supply chains, including those that run through Xinjiang, China, and exploit Uyghurs and other ethnic
and religious minorities.
“This fall in London, the G7 trade ministers released a Joint Statement affirming our belief that there is no place for forced labor in a rules-based multilateral trading system. By passing this bill with strong, bipartisan support, the United States can set an example for the world to follow.
“I am grateful to Congress for its leadership and look forward to continuing this necessary work with our trading partners and allies to ensure every worker is treated with respect and dignity – no matter where they live.”
USTR Press Release, STATEMENT BY AMBASSADOR KATHERINE TAI ON THE PASSAGE OF THE UYGHUR FORCED LABOR PREVENTION ACT, December 16, 2021, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/december/statement-ambassador-katherine-tai-passage-uyghur-forced-labor-prevention-act.
The bill as passed by the House and Senate is enclosed below. It is expected that President Biden will sign the legislation in the coming days.
The legislation consists of six sections. The first is a statement of policy including the strengthening the porhibition against importation of goods made with forced labor, leading international efforts to end forced labor, coordinating with Canada and Mexico implementation of Art. 23.6 of the USMCA prohibiting the importation of goods manufactured with forced labor, working to end human trafficking, regarding the prevention of atrocities as in the U.S. national interest, and addressing gross violations of human rights in the Xinjiang Uyghur Autonomous Region through diplomatic channels, multilateral institutions, by using all authorities available to the U.S. government including visa and financial sanctions, export restrictions and import controls.
Section 2 details a strategy to enforce Section 307 of the Tariff Act of 1930 (prohibiting the importation of goods made through forced labor in Xinjiang). There will be opportunity for public comments, a public hearing and development of a strategy by the Formed Labor Enforcement Task force (established by Sec. 741 of the USMCA Implementation Act) in consultation with the Department of Commerce and the Director of National Intelligence. The strategy will include elements that assess the risk of importing prohibited goods from Xinjiang and procedures to be implemented to reduce the risks, a factual description of various practices in China on forced labor including a list of entities using forced labor or working with the government on forced labor, a list of products made with such labor, a list of entities that exported such goods to the U.S., information on third parties using such goods, a list of high-priority sector (including at a minimum cotton, tomatoes and polysilicon) and other matters including additional resources needed by USCBP to enforce the law and guidance to importers. Within 180 days of enactment of the legislation, the strategy report shall be submitted to the appropriate Congressional Committees. The strategy will be updated annually.
Section 3 creates a rebuttable presumption that imports of goods mined, produced or manufactured in the Xinjiang Uyghur Autonomous Region is produced with forced labor. There are exceptions but CBP needs to submit a report to appropriate Congressional Committees within 30 days after determining an exception applies. The section takes effect 180 days after enactment of the legislation.
Section 4 deals with having a diplomatic strategy to address forced labor in the Xinjiang Uyghur Autonomous Region. The Secretary of State will submit a strategy within 90 days to the appropriate Congressional Committees including plans to enhance bilateral and multilateral coordination among other matters.
Section 5 deals with sanctions relating to forced labor in the Xinjiang Uyghur Autonomous Region. The President is to identify any official of China’s Government who is determined to be responsible for serious human rights abuses in connection with forced labor in the Xinjiang Uyghur Autonomous Region and shall impose sanctions on such individuals.
Section 6 sunsets Sections 3-5 eight years after enactment or when the President determines the Chinese Government has ended the human rights abuses in the Xinjiang Uyghur Autonomous Region, which is earlier.
Historically, human rights issues have not been viewed through a trade lense. Many human rights abuses are not easily addressed through trade and may have marginal trade effects. That is not true of the issue of forced labor which affects the costs of goods and services where such labor is involved either in an end product or service or in an upstream product or service.
The United States under the Biden Administration is working to address some of the trade distortions flowing from forced labor as can be seen in the ongoing Fisheries Subsidies negotiations. The human rights issues reportedly flowing from treatment of Uyghur and other minorities in the Xinjiang Uyghur Autonomous Region have caused concerns in many countries. Treasury, Commerce, Customs and Border Protection are all taking actions to address trade distortions caused by forced labor whether from China or elsewhere. The legislation sent to the President last week (that will likely be signed by President Biden by the end of the year) is an important step in raising awareness and trying to address the underlying situation in the Xinjiang Uyghur Autonomous Region.
While China is reacting negatively and now has legislative tools to take retaliation (regardless of WTO inconsistency), the U.S. and other countries have to address the human rights problems flagged in the Xinjiang Uyghur Autonomous Region and ensure that trade distortions from forced labor are neutralized.