Civil Society, Business Have Few Overlaps in Forced Labor Comments

The Office of the U.S. Trade Representative heard from business groups, businesses that offer traceability solutions and civil society groups, 45 in all, on how to shape a forced labor strategy -- but their views diverged strongly on what the approach should be.

Businesses and civil society broadly agreed, however, that CBP's process is too opaque. The Cotton Campaign, for instance, said that while a withhold release order on Turkmen cotton has been in place for almost four years, but there is no disclosure of enforcement of it.

Many advocacy groups criticized the government for not being effective enough in cutting off demand for goods made with forced labor. Several said that there have been fewer WROs in 2022, and a number of them complained that goods subject to WROs or the Uyghur Forced Labor Prevention Act are being exported to Canada, where they enter into commerce. Several noted that although Canada has passed a ban on the import of goods made with forced labor, only one detention has been made under that law, and the importer was able to win the case, and the goods were released.

A joint submission by The Freedom Fund, Walk Free, Global Fund to End Modern Slavery and the McCain Institute for International Leadership said: "CBP should have sufficient resources and staff to ensure that the ULFPA’s focus on the Xinjiang region does not compromise the agency’s ability to address forced labor in other regions. This includes acting on petitions in accordance with the timelines laid out in the document CBP Timelines and Investigative Benchmarks for Forced Labor Petitions. We are aware of many petitions submitted to CBP in the past three years that remain pending. Such delays and lack of communication run the risk of discouraging civil society from providing evidence to CBP."

Many trade groups that represent importers complained that an import-ban-focused approach either does little to eradicate forced labor abroad or sometimes sweeps up goods that are not made with forced labor. Business groups said there should be collaboration with companies to help them know who to avoid, and to tell them what kind of tracing technology will be used by CBP to identify raw materials.

"It is also important to clarify to businesses what types of clear and convincing evidence are required to prove that a product is entirely free of forced labor," the National Association of Manufacturers said.

The U.S. Fashion Industry Association, the Retail Industry Leaders Association, the National Retail Federation and the American Apparel and Footwear Association filed a joint submission that said: "Our members have spent years, and in many cases decades, working to identify, eradicate, remediate, and prevent forced labor in their supply chains." They said they have first-hand experience with the ban on goods made with forced labor, and in their view, a strategy that focuses on enforcement and "doesn’t distinguish between good and bad actors" could be ineffective. "To be successful, the trade strategy must recognize industry as partners working towards our mutual goal of combating forced labor."

Similarly, the National Foreign Trade Council said: "Tools that rely only on punitive actions once goods reach the U.S. border create a heavy incentive for businesses to simply drop suppliers if any forced labor compliance issues arise, leaving the supplier’s practices in place and workers at risk. A more effective approach would be to develop new tools that provide a longer, more collaborative process where potential forced labor issues are identified, recommendations are made to address issues of concern, time is allowed to implement recommendations, and positive tools/incentives for remediation are provided before imports are banned."

The Institute of Shortening and Edible Oils said: "All too often companies are viewed as perpetrators, as opposed to partners. This has prevented the sharing of crucial information that could lead to the identification of bad actors and remediation of workers in forced labor situations."

The Footwear Distributors and Retailers of America went further, saying that UFLPA detentions should not be based on meetings hearing from only civil society groups, "unproven allegations or speculation."

Wiley Rein, along with several civil society groups, said that USTR should use Section 301 to counter forced labor, because the import ban is leading Chinese companies to split production, offering a clean supply chain to the U.S. buyers and using forced labor for other buyers. The law firm, and several civil society groups, also said the Commerce Department should consider forced labor as a countervailable subsidy.

The Global Labor Justice-International Labor Rights Forum urged Congress "to reauthorize the GSP program as soon as possible and ensure that GSP benefits are contingent on protection of labor rights through robust and well-resourced investigation and review mechanisms." The Generalized System of Preferences benefits program offers tariff breaks for some exports from developing countries, and labor standards are one of the criteria for participation. Other civil society groups also asked for GSP to return soon, so it could be a carrot for countries to improve compliance.

However, the AFL-CIO argued that GSP, the Caribbean Basin Initiative and the African Growth and Opportunity Act are toothless. These programs "should be updated and monitoring and enforcement of those criteria strengthened to address the chronic failure of many GSP beneficiary countries to respect internationally recognized workers’ rights. In particular, the current requirement that countries need only 'take steps to afford' internationally recognized workers’ rights to retain their GSP benefits is much too weak, allowing countries with abysmal labor rights records to retain benefits."

A third of Thailand's GSP benefits were terminated over forced labor on fishing vessels. But the Seafood Working Group, which pushes to end forced labor in the industry, said the partial termination wasn't effective to change practices because GSP is too narrow, and did not cover tuna and shrimp, where the abuses are common. If they had been allowed to enter duty free under GSP, it would have been possible to put pressure on the exporters to make labor rights improvements and address violations of core labor standards in seafood," the group said.

Several civil society groups said Malaysia should not be eligible for the Indo-Pacific Economic Framework because the State Department has it on a list of the worst offenders for human trafficking. Others said IPEF should be conditioned on strong forced-labor standards, and even those who are making progress on fighting trafficking according to the State Department should not get commercial benefits until they solve the problem.

The American Association of Exporters and Importers said the CBP approach should change dramatically, where any supplier deeper than Tier 2 would not be considered under the ban. The group also argued that a reliable allegation should be shared with the trade a year before there's any detention. In contrast, one of the civil society groups said that detentions should be retroactive, because it said that importers learn of an investigation and rush to bring in goods ahead of a WRO.

The Motor and Equipment Manufacturers Association, asked for a very different approach, saying that CBP should create an approved supplier list and a suspected entity/product list.

Rethink Trade noted that the statute that includes de minimIs authorizes admissions for low-value shipments, but does not require it, and so the group argued that categories of goods from countries that the Labor Department has identified as having forced labor should not be eligible for the treatment.

The group also said UFLPA's approach should be repeated for other imports. "Having a default of product being altogether banned unless and until commercial interests can show a clean supply chain is an extremely effective enforcement tool that should be widely adopted as the prospect of U.S. market access being altogether cut off overcomes whatever cost savings can be derived from labor abuses," the submission said. The Alliance to End Slavery and Trafficking also argued for such an expansion.

Oritain and Applied DNA Sciences both said their tracing approaches could help stop raw materials with forced labor inputs from entering commerce; Applied DNA said it needs $7.5 million in grants to be able to identify the DNA signatures of 90% of the world's traded cotton.

NAM and the U.S. Chamber of Commerce both said they think the government should invest in supply chain technology, though the Chamber added, "However, these efforts should be tested carefully in consultation with industry partners before implementation."

Although civil society groups and business groups usually disagreed on how the government should approach fighting forced labor, in the chocolate arena they agreed. The National Confectioners Association and the International Cocoa Initiative both said that forced labor among cocoa growers is rare, and that a ban on imports would be harmful to the cause of eliminating child labor, which is common in the field. The NCA said it supports mandatory due diligence for importers.