HTML _ RS20582 - China and the WTO: Labor Issues
21-Jun-2000; Mary Jane Bolle; 3 p.

Abstract: China's prospective membership in the World Trade Organization (WTO) raises issues among some U.S. workers and organized labor about job and wage security. Many labor groups argue that Mexico's threat to U.S. jobs and wages since the North American Free Trade Agreement (NAFTA) could be dwarfed by China's threat as a result of closer economic ties. China's average manufacturing wages, at about $0.25 per hour, are about one-fifth as great as Mexico's, and about one-fiftieth as much as total compensation for manufacturing workers in the United states. China's labor force is 18 times that of Mexico and five times that of the United States. Most business groups argue that U.S. businesses in China pay much higher than average wages, that free trade creates both ¨winners¨ and ¨losers,¨ and that China's WTO accession will greatly expand U.S. exports and jobs. On May 24, 2000, the House passed H.R. 4444 granting permanent normal trade relations (PNTR) with China. It also sets up a Congressional-Executive Commission to monitor Beijing's human rights compliance and codifies anti-surge protection measures contained in the U.S.-China bilateral agreement. Related legislation includes proposals for an expanded adjustment assistance program for workers displaced from their jobs by possible increased trade with China. China is the world's most populous nation. It has a labor force of about 700 million, five times that of the United States (at about 130 million). China's imminent membership in the World Trade Organization (WTO) (1) has crystalized concerns of some U.S. workers about their welfare in the new world economic order, ¨the global economy.¨ As one result of globalization, goods such as autos may be assembled from components produced in a dozen or more countries. At the same time, some services (e.g., processing of information) may be performed in localities far from where the service is received. Some labor groups have expressed concern that, with China's entry into the WTO, increasingly fewer manufacturing and service jobs may be performed by workers in the United States. China's economic power has grown substantially in the past decade. Its roughly 125 export processing zones (2) - huge industrial parks located at or near ports - have provided an engine for economic growth and an increasingly sophisticated training ground for workers. Total U.S.-China trade rose from $18 billion in 1989 to $95 billion in 1999, while China climbed from tenth to fourth position among U.S. trading partners. Although its eager and massive working population has quickly made China a top world economic player, enforcement of worker rights protections and social policies are still lagging behind those of more developed countries. [read report]

Topics: International, Economics & Trade, International Finance

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