China and CBI Bills Highlight Controversy over Trade Issues

Many Latin American companies are apprehensive about China's increased access to world markets through its admission to the World Trade Organization (WTO) and its agreements with the United States and the European Community. These developments, they fear, can only mean more competition and direct pressure on local producers. In the US, too, the proposal to normalize trade with China has sparked concern about the effect on the US economy. On May 16, the Economic Policy Institute (www.epinet.org) released a study of potential job losses from the bill. The report states that the "booming trade deficit with China will accelerate job destruction in the next decade with losses in every state," a conclusion based on the US Trade Commission's own China-US trade model. Exports may grow, supporting some US jobs, but many more jobs, especially in manufacturing, may be lost to the increased flow of imports. By these calculations, Florida will have a net loss of 22,277 jobs.

The Caribbean Basin nations recently expanded their own access to the US market through the CBI Extension bill. This legislation made a tepid concession to the General System of Preferences' worker rights conditionality by adding language on child labor. Despite the US government's efforts to portray the bill as strengthening human and labor rights conditionality, however, labor observers have not been impressed.

The China and CBI trade bills have highlighted the increasing divisiveness of trade issues in the US Congress and society. Just how many times can a determined president force through a controversial market-opening measure? Trade initiatives are unpopular with the US public, and national sovereignty issues are emerging both at home and abroad. Despite all the efforts to promote NAFTA, for example, the polls continue to show a lack of popular enthusiasm for that treaty. Until now, the immediate needs of expanding the global trading system have taken precedence over negative public opinion. However, the reaction of the AFL-CIO and its industrial union affiliates to the latest trade legislation should make for some interesting political maneuvering in the fall election campaigns.