Labor Alerts: a service of Campaign for Labor Rights

WU TRIES TO END NORMAL TRADE WITH CHINA

By Jim Barnett and Jeff Manning
The Oregonian (Portland, OR); July 28, 1999

[ Campaign for Labor Rights notes: 1) "Norman trade relations" used to be known as "most-favored nation status." 2) During Clinton's first term, Nike was one of a group of companies which successfully lobbied the Administration to de-link human rights considerations from trade with China. Nike is now reaping the profits of that policy. ]

It's one thing for a member to vote his conscience on Capitol Hill. It's another when the vote would disrupt supplies and profits of the biggest company based in his district.

But Rep. David Wu, D-Ore., did exactly that on Tuesday.

Wu, whose district includes the Beaverton campus of Nike Inc., led a charge to end normal trade relations with China - a change in policy that would have sent Nike scrambling to find new, low-wage factories to make its shoes.

The measure was expected to fail, and it did on a 170-260 vote. But before the vote, Wu lectured his colleagues that continued trade with China was not enough to end human-rights abuses in the Communist country.

"The risk is that we really lose track of who we are and what we stand for as Americans and Oregonians," Wu said in an interview outside the House chamber.

It's hard to overstate China's importance to Nike. It is the largest single supplier of footwear to the company, providing about 32 percent of the total last year. China is also one of the chief sites of Nike's apparel production. Moreover, China's vast size and relative political stability has made it capable of absorbing additional production as other countries have faltered.

When the Asian economic crisis threw Indonesia into political and economic turmoil, Nike shifted some of its Indonesian production to China.

Nike lobbied Wu aggressively. The company agrees with the Clinton administration that maintaining continued engagement with China best serves U.S. interests as well as the interests of the Chinese people.

Brad Figel, Nike's director of governmental affairs, met with Wu a number of times to explain the company's position. "He appreciated our stance," Figel said. "But to be honest, he was very clear in his reasons, with his family background... I haven't given up on him," Figel added.

Wu's vote against trade with China - and the measure's defeat - had been expected for several months. Nevertheless, it was a watershed for the freshman Democrat, who won the open 1st District seat by a narrow margin.

During his campaign, Wu made a pledge to press for human rights in China. Wu came to the United States as a 6-year-old, and he is the first Chinese immigrant to serve in Congress. The vote was a personal matter, he said.

"One of my concerns with this cash-register form of engagement is, there's a view there that China is not ready for democracy and perhaps that Chinese are not capable of Democratic government," Wu said. "I'm grateful to folks in Oregon for having elected me because I believe that I am the living proof that that is just not so."

Wu said he had felt "significant" pressure from business interests in Oregon and elsewhere to change his mind. He did not name Nike, but he said he hoped to change the shoe maker's view of engagement with China.

"What I am encouraging the folks that I meet with is to work with me to do a little more than just business, and one hopes that Nike is at the forefront of this."

Rep. Peter DeFazio, D-Ore., a longtime critic of the Clinton administration's trade policy with China, applauded Wu's leadership.

"It's deeply principled," DeFazio said. "It's defying both the powerful economic interests and conventional wisdom. I'm really pleased to have his company on the vote."

The vote on trade with China has become an annual ritual on Capitol Hill. Each year, the House votes whether to block President Clinton's decision to continue normal trade relations with China for the coming year.

In previous years, the vote has focused debate on China's record on human rights. As the House voted, the Chinese government is again weathering a storm of criticism from human rights activists for its crackdown on members of the Falun Gong religious sect.

But with relations strained by NATO bombing of the Chinese embassy in Yugoslavia and near-completion of an agreement to bring China into the World Trade Organization, the stakes of blocking trade were too high for most members.

In addition to continued supplies for Nike, increased trade with China opens markets for other Northwest products, including soft white wheat from the region's agricultural heartland, said Rep. Greg Walden, R-Ore.

"To the extent that we can bring China more into the world community through trade, fair trade, I think we will bring about greater openness and humanity in China," said Walden, who recently visited China and toured a Nike factory. "If we erect a wall by stopping trade, all we do is create a bigger enemy."

Nike's Figel questioned the value of the annual debate.

"We've been arguing on this since Tiananmen Square," he said. "Frankly, I don't know how it's helpful in addressing some of the issues in China."

HA LETTER: NIKE STILL STALLING

Although free trade boosters claim that human rights improvements follow automatically from increased trade with countries that have repressive regimes, the evidence suggests the contrary. In China, researchers report that wages and conditions actually have deteriorated for sweatshop workers, even as trade with China has multiplied. In Vietnam, A Nike executive's communications with the state-controlled union have resulted in the intimidation and silencing of Vietnamese Nike shoe workers and their in-country advocates.

More than six months after a letter from a Nike executive ended the ability of a U.S. human rights group to receive information on Nike labor practices in Vietnam, company executives continue to stall, make empty promises and profit from having effectively silenced one of the company's strongest critics.

On January 11, 1999 Nike executive Joseph Ha sent a letter to the state-run Vietnam General Confederation of Labor. Ha is a Nike Vice President and a Special Assistant to Nike CEO Philip Knight. Ha's letter said that it is "obvious that a few U.S. human rights groups, as well as a Vietnamese refugee who is engaged in human rights activities, are not friends of Vietnam." The letter equated labor rights activism with attempts to impose a new form of government on Vietnam.

Ha's letter referred to Thuyen Nguyen and Vietnam Labor Watch. The effect of his letter was immediate intimidation of VLW's sources of information in Vietnam, making it virtually impossible for the organization to monitor what is happening in Nike shoe factories there.

Several corrective actions have been suggested by U.S. human rights groups. While Nike claims to have dealt with the situation, the reality is that none of its half-hearted measures have corrected the problem.

Several human rights groups, including Global Exchange and non-governmental members of the Apparel Industry Partnership (of which Nike also is a member) have expressed frustration over Nike's inaction. The company, which puts on its running shoes whenever there is an opportunity to promote itself as a human rights leader, is a foot-dragger when it comes to implementation.

SECOND INSTALLMENT OF CLR ORGANIZING PACKET

The second installment of the Campaign for Labor Rights 1999 Sweatshop Activist Organizing Packet is ready. Everyone ordering the packet now will receive the second installment and all materials which are still timely from the first installment - plus subsequent installments as they are produced throughout the rest of 1999.

The 1999 Sweatshop Activist Organizing Packet is a multi-theme, multi-campaign packet for local activists organizing around sweatshop issues. Order by email clr@clrlabor.org or phone (202) 232-5002. Include your postal address: Packet is in hard copy. Packet includes a donation form and a return envelope. Suggested donation: $10.00.

If ordering from outside the United States, please pay by credit card. From within the U.S., either credit card or check payment is welcome. If you are paying by card, the charge will be credited to Campaign for Labor Rights through the Alliance for Global Justice, of which CLR is a member project. Your bill, however, will show a payment to the Alliance. Just email us your name as it appears on the MasterCard, Visa or Discover card, your account number, the expiration date and the amount of the payment in U.S. dollars.

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