Congressional Discussion of the Effectiveness of Section 307 against Imports of Goods from China Made with Forced Labor

On July 21, the House Ways and Means Trade Subcommittee held a hearing on "The Global Challenge of Forced Labor in Supply Chains: Strengthening Enforcement and Protecting Workers." Among the many issues discussed at the hearing related to forced labor in various countries, one of the issues that came up was the effectiveness of the restrictions on imports from China imposed pursuant to Section 307 of the Tariff Act of 1930. In this regard, Congressman Darin LaHood (R-IL) had exchanges with Brian Lowry of the United States Council for International Business and Charity Ryerson of the Corporate Accountability Lab. Ryerson acknowledged that: “I think there's a real lack of information coming out of the region [about whether the Chinese government has made changes in response to the restrictions], … .” At the same time, she also expressed hope that the restrictions would have an impact: “We do hope that over time, this type of loss of a market will create different incentives on the Chinese government that will address this practice.”

The full exchange is as follows:

Congressman LaHood:

... I continue to be a strong advocate that we cannot allow forced labor to prosper, we must do all we can to prevent and penalize these unacceptable practices across the globe. And we've heard many examples here today. While the United States leads the world in preventing forced labor, we must also support efforts that promote American values, including actively participating in robust trade policy and supporting trade agreements to help stem the use of forced labor practices. I've continued to work to bring attention to these issues through the work on the trade subcommittee, but also as the co-chair of the bipartisan US-China working group, and as a member of the GOP China Task Force. As we look at ways to increase clarity and transparency for US companies that work diligently to go above and beyond international standards to combat against forced labor in global supply chains, we should focus on concrete ways we can help US companies be effective. Looking particularly at goods coming from China, I recognize there are challenges with the required documentation under Section 307 of the Tariff Act of 1930, and I know we've heard a little bit about that today. I guess I want to ask the witnesses if they could talk about ways in which Section 307 regulations could be updated to provide more effective guidance for companies to utilize as relates to China. And maybe I'll start with Mr. Lowry and then go to Ms. Ryerson.

Lowry:

Thank you, Congressman, for that question. I think it is absolutely critical that we look at the current regulations, and the way in which they are enforced to consider what works and what doesn't. We've heard a number of examples and a number of comments today about things that aren't working and things that aren't happening. But I think we can find a workable solution to help address this. … And I think I would encourage further discussion about this to look at business as a partner, and to have a process that contributes to fact-finding that is collaborative and transparent, that is understandable for all engaged and inclusive, and most importantly, advances the shared objective that we've all shared today of a eradicating forced labor and supply chains. Thank you.

Ryerson:

Thank you for your question. I would just add to that, I actually agree with Mr. Lowry, on many of his points about creating this multi-step process. And I think some of what he's speaking to is the same transparency aims that a lot of us on civil society are asking for. We're looking for CBP to provide a lot more information throughout the process to us, so that we can use that information in our investigations and in order to tailor what information we're providing to them. So that greater transparency, I think, is a desire across the board.

I do think that having some flexibility, depending on the industry. When we're looking at China specifically, and particularly in the case of incarcerated workers, any kind of prison labor, whether it's an internment camp, a concentration camp or a prison, probably that deserves a straight up WRO right out the hatch. I'm not sure that we need a multi-step process and a lot of hand wringing. That's something where those goods really should not be coming into the United States and competing unfairly with domestically produced goods or other goods produced in other parts of the world that were not produced with such practices.

In other industries, like the cocoa sector, as I mentioned, more flexibility is important. And so in those cases, where we could have a multi-step process, like what Mr. Lowry was identifying with the recognition that the cocoa companies are fully aware of the problem, and have failed to solve it for so many years, I do think that that could be a helpful update to the regulations.

LaHood:

Well, thank you both for your responses on that. As a follow up, Ms. Ryerson, as it relates to China, I think we all saw the horrible pictures last year, the year before, of, it looked like the concentration camp in Xinjiang with the Uyghurs and the way that they have been treated. But I guess, what gives you any optimism that the Chinese are making changes, or acknowledging -- you can't even get them to acknowledge that this is a problem or an issue? And they continue to deny that? And so, have you seen any changes on behalf of the Chinese government that gives you hope or optimism that we're making headway here?

Ryerson:

I think there's a real lack of information coming out of the region, which has been a problem for all of us. But at the same time, it is a fact that if you dry up a market for forced labor produced goods, there will be less goods produced with forced labor. So we don't know if there's been an immediate impact in terms of releasing incarcerated religious minorities in China. We do hope that over time, this type of loss of a market will create different incentives on the Chinese government that will address this practice.