Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
Reporting on key macro data at the time of release.
Real-time insight on key fixed income and fx markets.
- Emerging MarketsEmerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
- MNI ResearchMNI Research
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
- About Us
The U.S. has tools to push China toward greater transparency on supply chains, workers' rights, a Biden administration official tells MNI.
Sign up now for free access to this content.
Please enter your details below and select your areas of interest.
The Biden administration will make workers' rights central to its dealings with key trading partners like China and Mexico, even if that takes ratcheting up of enforcement measures and greater diplomatic muscle, a top U.S. Labor Department official told MNI.
"The U.S. government needs to exert more leverage in its relationship with China and to put at the center of our diplomatic and economic conversations workers' rights," said Thea Lee, deputy undersecretary for international affairs at Labor. "This administration is willing to elevate workers' rights to being a core part of that conversation."
Lee, a close ally of U.S. Trade Representative Katherine Tai and the former chief international economist of the AFL-CIO, said the USMCA trade deal with Mexico and Canada was unique in its labor enforcement features, and that making sure its provisions were met was a top priority.
"We can't look after the interests of American workers, we can't protect their rights to organize, if we are embedded in a global economy where workers' rights are trampled," Lee said.
"So for us that is a key deliverable for the Biden administration around what is a worker-centric trade policy, what is a foreign policy for the middle class, and how can we use our resources and our leverage and bilateral relationships to hold both countries and governments accountable to internationally-defined workers' rights."
The U.S.-China relationship has been under strain for some time, with the Trump administration angering Beijing by imposing tariffs in retaliation for what it described as unfair trade practices. Lee said the Biden approach was different because it put workers first.
"People might say, well it's the same thing, you're tough on China -- but I think the whole concept of the Biden-Harris administration is that we want to lift up workers' rights around the world," she said.
"With respect to China, there are just a ton of issues and concerns going on with respect to the Chinese government's not just tolerance of but in some cases creation of forced labor conditions especially in the Xinjiang region and for the weaker residents," Lee said.
China has been in the spotlight for markets this week, with global equities sinking as a liquidity scare at Evergrande, the country's largest property developer, raised fears of a broader debt crisis. The Chinese economy, the world's second largest, has been slowing in recent months, and authorities have been tightening regulations around key sectors including technology and entertainment.
"The U.S. China trade, economic, diplomatic relationship is an incredibly important relationship for both countries. We'll have to see how that relationship evolves," Lee said. At the moment that relationship is a little bit more stressful on both sides because there are a lot of ongoing disputes."
As for what the United States can do, Lee said there are plenty of tools in the administration's toolbox to deal with China and other transgressors of global trade norms.
"When a company has been identified as having forced labor in its production chain, then the Customs and Border Protection can issue a withhold and release order which stops the goods at the border, prevents them from entering the United States of America," she said.
"That is a tremendously powerful tool and one that only in recent years has been used more effectively. That's certainly something that we have used and will continue to use to make sure that China, or the Chinese government, or companies based in China, are not abusing forced labor."
If more targeted measures are needed, Lee pointed to actions she brought as part of the AFL-CIO in the late 1980s using what are called "Section 301" cases against China.
"We filed a case of China's violation of workers' rights as an unfair trade practice. We at the AFL CIO were the first to ever use that provision. We also brought a separate case around the same time for manipulation of currency as an unfair trade practice. Neither one of those cases were accepted by the George Bush administration but that is another kit in the toolbox."
Lee also sees an ongoing role for the World Trade Organization in settling disputes with China.
"There's definitely plenty of room (for action) at the WTO because China violates a lot of WTO rules," she said. "The Obama administration did in fact bring many cases at the WTO against China. That continues to be a possibility for this administration -- not on workers rights, but other violations like illegal subsidies or dumping."