Western governments say the Communist China's regime uses forced labor of Uyghur and other Muslim minorities in East Turkistan, also known as Xinjiang, the world’s leading producer of cotton and raw materials used in solar panels.
US Congress and Biden administration officials are stepping up pressure on American businesses to stop imports from the Western Chinese region of Xinjiang as Beijing’s alleged use of forced labor emerges as a top item on their bilateral trade agenda.
Imports of cotton and tomato products have already been effectively banned since January, and penalties on purchases of some solar materials were implemented in June.
Tougher restrictions are afoot. Congress is expected to approve legislation later this year that would prohibit imports of all products from Xinjiang unless the importer can prove their items are free of forced labor—a high bar.
The Uyghur Forced Labor Prevention Act passed the Senate by unanimous consent last month and is awaiting approval by the House, which passed a similar bill by a wide bipartisan vote last year.
The legislation would also increase resources for the Customs and Border Protection. The CBP has detained 967 shipments in forced-labor cases in the current fiscal year, which began in October, mostly linked to the Xinjiang cotton bans. That number is roughly triple the cases in all of the previous year.
The legislation would substantially enhance enforcement by the CBP, said Scott Nova, executive director of Worker Rights Consortium, a nonprofit, independent labor-rights monitoring group partly funded by universities. That has significant implications for companies, Mr. Nova stated.
The Biden administration is conducting a broad review of trade policy toward Communist China.
It listed a wide range of industries as having heightened human-rights concerns, including agriculture, food processing, cellphones and toys, in addition to cotton and renewable - energy products.
Industry is rushing to move out of East Turkistan
Ms. Katherine Tai, the U.S. Trade Representative, said the guidance demonstrated the administration’s commitment to ending forced labor, especially in global supply chains. Our worker-centered trade policy will champion workers’ rights and address unfair competition, especially when it is based on human exploitation, she said.
Industry representatives and trade lawyers say importers are rushing to move out of Xinjiang in anticipation of the Uyghur forced-labor legislation, particularly in the solar industry, which has relied heavily on polysilicon, a solar panel component, from the region.
We have been very public in pushing companies to move out of Xinjiang to areas where all products coming into the U.S. can be independently audited by third parties, said Mr. John Smirnow, general counsel and vice president of market strategy for Solar Energy Industries Association. The trade group has issued a protocol to help companies trace their supply chains, and its 280 member companies have signed a pledge against forced labor, he said.
While importers and trade lawyers expect the legislation to pass with key provisions approved by the Senate intact, House lawmakers may try to add a few tougher conditions, including public disclosure to the Securities and Exchange Commission of any engagement with a Xinjiang entity and shortening the implementation period for the law.