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Panelists Suggest Next Plan of Attack on Forced Labor

There are a number of tools that the U.S. government has yet to fully utilize if it truly wants to tackle China's use of forced labor to manufacture goods, according to panelists speaking June 13 at a Hudson Institute event, “Tackling the Uyghur Forced Labor Challenge.”

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For starters, the Uyghur Forced Labor Prevention Act “requires diplomatic strategy that has not yet been made publicly available [and] that, in theory, should outline risks that industry can understand and take into account as risk indicators when they're structuring their supply chains,” said panelist John Pickel, senior director of international supply chain policy for the National Foreign Trade Council. Pickel also previously served in the government as principal director of trade and economic competitiveness in the DHS Office of Strategy, Policy and Plans.

The Office of the U.S. Trade Representative also has been developing a forced labor trade strategy, according to Pickel. The comment period for the strategy is closing soon, but having that forced labor strategy as well as the diplomatic strategy would enable the industry to “get at a broader idea of what is the most effective means of actually getting at the root cause of forced labor,” he said.

Secretary of State Antony Blinken indicated in February 2024 remarks that USTR will release the forced labor trade strategy "later this year."

Panelist Scott Flipse, director of policy and media relations for the Congressional-Executive Commission on China, and event moderator Olivia Enos, Hudson Institute senior fellow, recommended actions that would hit the pocketbooks of companies that allegedly use forced labor somewhere along their supply chains.

“Put Temu on the Entity List. That would send reverberations through fast fashion world,” Flipse said. Temu is an online shopping platform with connections to China. The UFLPA Entity List flags entities using forced labor or exporting products from China's Xinjiang region.

Reporting from Hong Kong has categorized Temu not as a business-to-consumer platform but rather as an online retailer that is “labeling, shipping, warehousing and ... helping with sourcing and supplying through their suppliers,” Flipse said.

As a result, “I think that you need to treat them as such, not as an Amazon or an Etsy anymore. I think that that would send major reverberations through an industry and through this issue on the de minimis,” Flipse said, alluding to the possibility that Temu appears to be in the business of selling individual orders under de minimis allowances.

The U.S. government also should consider using sanctions against companies and individuals known for profiting from forced labor, Flipse said. That would “go after both their positions in the U.S. markets and also their financial resources.”

Moderator Enos echoed Flipse’s comments, noting that the Treasury and other federal agencies could take bolder actions, such as creating a list of bad actors that have repeatedly violated Section 321 de minimis provisions and having Treasury implement sanctions related to forced labor from China.

“I know that [Treasury] Secretary [Janet] Yellen has said that it is a priority to target Uyghur forced labor issues, but actions speak a lot louder than words,” Enos said. She referred to a recent letter from U.S. senators asking Yellen why her department hasn’t made greater use of its authority to sanction those who commit human rights violations against China’s Uyghur minority (see 2406070049).

One of the major challenges the government has faced in addressing the broader issue of forced labor has been the practice in China of moving forced labor to other facilities beyond the Xinjiang region, according to Eric Choy, executive director of trade remedy enforcement for CBP’s Office of Trade. Forced labor is used to produce Tier 2 and Tier 3 products, and these products can often end up in manufacturing facilities around the world, Choy said.

“If you look into the broad globalization of things, the forced labor and the gross human atrocities that are occurring [are] kind of like this metastasized cancer. And so in order to treat that, you’ve got to go and find where that cancer has spread to and target and pinpoint enforcement. That’s the approach that we have to take with regards to downstream manufacturing,” Choy said.

Choy added that he has noticed industries that use Tier 2 and Tier 3 products are starting to develop a better picture of their supply chains and their suppliers, “where traditionally, especially over the last several decades, industry hasn't had to do that. It’s [now] more than [going for] rapid expansion and the best cost.”