Watching APEC, Thinking About the UFLPA

Considering public remarks at the 2023 APEC summit in San Francisco

I am—or it seems, I have become—a certain type of geeky consumer of foreign policy content. The foreign policy content I couldn’t get enough of this week was the public dialogue between U.S. officials and Chinese President Xi Jinping at and around the APEC summit in San Francisco.

I was among the first few hundred folks to watch the YouTube stream of the speeches by U.S. Commerce Secretary Raimondo, and President Xi. I mean: who could resist? The U.S.-China relationship has world historic significance. The U.S.-China trade relationship is at the heart of the geopolitical relationship. And it’s been like three seasons since any of the main characters have appeared in an episode together, so forgive me for binge-watching!

I also esteem the art of diplomacy. I find it compelling to see the President of the United States and the Chinese leader walking side by side, differences notwithstanding. When it comes to shared initiatives like the announced agreement to collaborate on reducing China’s production of fentanyl precursors, I’m a glass-half-full optimist. I’m reminded of a certain teen girl who once offered to try and smooth things over with a bothered neighbor using nothing but some fresh cookies and her considerable charm. “Dad. Let me use my powers for good,” she said. It seems to me a tech-empowered authoritarian state could be pretty effective at stamping out the production and shipment of narcotics if it wants to. If that’s the best thing to come out of APEC this year, we should welcome it.

My main interest in watching, though, was to see just how the current Administration approached the issue of forced Uyghur labor: where it ranks as a diplomatic priority, and how it is framed in the context of broader trade relationship. At any confab like this, there are public comments you’ll make to (or in the presence of) your diplomatic counterpart, public comments you’ll make when you’re not in their presence, and then the private dialogue. The art of diplomacy! If Wall Street analysts dive deep into remarks from the Chair of the Federal Reserve to divine the future of interest rate adjustments, then when the American president and Chinese leader meet face to face, why wouldn’t Substack’s leading .gif-hub for trade policy commentary on Depression-era trade legislation do the same for the UFLPA?

First, a little context. China has, shall we say, not been solicitous about foreign interest on human rights within its borders, at least historically. During the run up to China’s accession to the WTO, there was abundant concern among U.S. lawmakers, political leadership and other observers about China’s hostility to democracy, and its human rights record more generally. Ultimately those concerns were subordinated to the ambition of granting China permanent normal trade relations, and welcoming China into the WTO.

I’ve studied the historical record , and while there was a lot of discussion during that time about China’s violations of human rights, very little of it evinces an imagination for the way in which such human rights abuses might one day become woven into the fabric of global supply chains as a result of the very trade benefits being established. In retrospect, such a development was totally foreseeable. And yet it was largely unforeseen.

But whenever the issue of China’s human rights record has come up, China’s response is the same: “do not meddle in our internal affairs”. Like the Las Vegas of the international community, China says that what happens in Xinjiang stays in Xinjiang, and there’s nothing untoward happening anyway, and the world community should mind its own business. In fact, China responds with such hostility to even being asked the question, it is widely understood that the Trump Administration didn’t use its extensive trade negotiations with China ever to broach the topic of forced Uyghur labor, preferring instead to keep the focus on other acts, policies and practices causing harm to the U.S. economy, like IP theft, and forced technology transfer.

So, how was the issue handled by the Biden Administration at the 2023 APEC summit? Well, Treasury Secretary Janet Yellen gave a nice distillation of her take on the U.S.-China trade relationship for the PBS news hour:

We have a deep economic relationship and financial relationship that is generally beneficial both to China and to the United States, although we insist it be one that is fair, and have a level playing field so that American workers aren't disadvantaged, but we have a productive competition between China. We want to make sure that continues. At the same time, we intend to protect our national security and it's important for China to understand that we're doing that, and it's really non-negotiable, but we try to do that in ways that are targeted [and] narrow, but not in ways that are intended to harm Chinese people narrowly or inhibit their growth. So there is much where we can and should cooperate and the [APEC] meeting will address all of these points.

Commerce Secretary Gina Raimondo sounded a remarkably similar vision of the U.S.-China trade relationship, although hers is worth capturing more extensively, because, to paint the picture for you, Xi Jinping is sitting at a VIP table just a few feet in front of her while she delivers these remarks. This falls in the diplomatic category of public remarks you’ll make to (or in the presence of) your diplomatic counterpart.

Here’s how she described the U.S.-China trade relationship:

Now the principles that govern the overall relationship of course underpin our economic relationship. We will—we have to protect what we must, but we will promote where we can . . . . [W]e have a large consequential, significant, economic relationship with China that sustains over a million jobs here in America. We want to trade with China. We want robust trade with China on a level playing field that is reciprocal and that is fair. We want that with all of our large trading partners.

. . .

Now, obviously . . . national security [is] our priority, indeed China's priority is to protect [their] national security and [ours is also] to defend our system of values. Bolstering our national security requires us to diversify our supply chains, especially for critical goods, invest in our own industrial base, and adopt targeted, narrow, precise protections to protect our most sensitive technology, quite frankly so it can't be used against us.

That being said, I want to be very clear: the vast majority of our trade and investment relationship does not involve national security concerns and we are committed to promoting reciprocal trade and investment in those areas. And I think that's a very important message for that to happen. We obviously need to make progress in addressing the concerns of U.S. businesses . . . . But I think we can do that. There are concerns. But through candid and direct diplomacy, like i saw and participated in today at Woodside, with hard work and good faith we will make progress on these issues.

If I can try to summarize, the common talking points for both Secretaries Yellen and Raimondo were essentially (1) we have and want to have a deep and robust economic & trade relationship with China, (2) it needs to be fair and a level playing field for American workers, (3) we’re going to take narrow targeted steps to protect national security where we must, but other than that, (4) the “vast majority” of trade does not involve such national security concerns, so we want a vibrant reciprocal trade and investment relationship.

What’s interesting to me is that this message doesn’t shy away from referencing the most important caveats to its “open to trade” policy toward China. Rather, it highlights them. I hear the “fair” and “level playing field” comments as code for tariffs that are and will remain fixtures of U.S.-China trade. The “national security” carve-out appears, in context, primarily to refer to U.S. export controls on semiconductors, restraints on the utilization of Chinese critical minerals, and America’s prioritization of supply chain resiliency, etc. But if there’s intended to be an oblique or discreet public reference to America’s view on China’s use of forced Uyghur labor in either of these remarks, I can’t rightly put my finger on it. Perhaps in Secretary Raimondo’s reference to “defend[ing] our system of values”? It’s really hard to say.

The Biden Administration did not altogether abrogate reference to the Uyghur issue, however. Rather, at a different event coinciding with the APEC summit (with no Chinese officials present, as far as I can tell), Secretary of State Blinken delivered a speech for “The Rollout of the Presidential Memorandum on Advancing Worker Empowerment, Rights, and High Labor Standards Globally”.

While Secretary Blinken’s speech did not touch on forced Uyghur labor directly, the Presidential Memorandum he was touting announces a new “whole-of-government approach” to advancing worker rights and promoting international labor rights, including a whole host of specific directions and instructions to various government agencies to “coordinate”, “cooperate”, “advance” (and many other verbs) these important topics.

Buried in that Memorandum, in the thirty-fourth such direct instruction, found in romanette (vii) of subsection (e) of Section 3, and following a long list of direct instructions to virtually every other government agency, including the Secretary of Energy, Secretary of State, Secretary of Treasury, Administrator of USAID, the U.S. Trade Representative, and even the Attorney General, the Secretary of Homeland Security is directed to “utilize available customs authorities, as applicable, to address forced labor and related abuses in global supply chains.” (Emphasis added.) Not to eliminate trade in slave made goods, mind you. But to address it.

The headline grabber from Secretary Blinken’s speech was that this Memorandum “formally recognizes that labor rights are key to our national security and to our foreign policy.  This is not simply a domestic issue; it is for us a matter of national security, a matter of foreign policy.” National security: it’s not just for steel and aluminum tariffs anymore.

As far as I can tell, this is the closest that any public remarks by U.S. officials at or around or, in this case, linked to the APEC summit came to discussing the issue of forced Uyghur labor or the U.S. trade prohibition against it. As always, if I’ve missed something, I trust the crack team of FLT readership will set me straight, and I’ll update this post *right here* accordingly.

Is Forced Uyghur Labor a Big Deal?

Maybe it’s just availability bias, but I think that the issue of forced Uyghur labor, and China’s treatment of the Uyghur community writ large, is a really big deal. I think the intersection of forced Uyghur labor in global supply chains is a substantial and legitimate concern in the U.S.-China trade relationship. I can’t speak for anyone else, but, given the chance, it’s precisely the sort of thing I’d want to talk about with Chinese leadership. A lot.

I am in no way privy to the “candid and direct diplomacy” that Secretary Raimondo saw and participated in at Woodside. It is totally possible that after re-establishing the the military-to-military dialogue, and covering climate change, public health and the fentanyl cooperation, the next order of business was China’s treatment of Uyghurs. But in public discourse at APEC, I’m not sure the issue was ever broached.

It could be that the Administration’s perception is that there really just isn’t all that much trade that is affected by forced Uyghur labor. To be honest, I’m not aware of any credible estimates of the extent to which U.S. import trade actually involves supply chains tainted by forced Uyghur labor. The closest thing we have to any actual statistic on that front is the fact that approximately half of what CBP thought might be tainted by forced Uyghur labor was successfully proven not to be. So it’s conceivable the aggregate value of affected trade is actually small.

That said, in early days, there were estimates that as many as 80,000 Uyghurs had been transferred as a part of forced labor programs. Today, the research and documentation have evolved considerably, and the best academic estimates are that millions of Uyghurs have been affected by such programs. While avoiding forced Uyghur labor in any given supply chain is not particularly hard—in fact, it’s a completely navigable challenge, if you know what you’re looking for and what kind of proof will be considered complete—but it will require more structure, clarity and collaboration from the United States government to be accomplished. And if China understood that this was a serious priority with respect to the U.S.-China trade relationship, that wouldn’t hurt either.

It could be that the Administration simply sees the UFLPA as a poorly constructed quasi-trade law, and they’re reluctant to talk up the importance of complying with a feeble legal mechanism. I get that. Or maybe they just understand that China regards this all as an internal affair, and in whittling down the diplomatic priorities, this one fell to the cutting room floor. Maybe it’s some combination of all of the above. 

I just think that on the merits, China’s wrong when they say that their treatment of Uyghurs is an internal affair. I suppose a repressive government could crush the voice of a dissenting pro-democracy activist within its own territory, and that could, arguably, be an internal affair. But forced Uyghur labor ceases to be an internal affair the moment it intersects with merchandise destined for international commerce, particularly the United States. U.S. law takes the condition of labor at any point in a global supply chain, no matter how attenuated or internal to a foreign jurisdiction it may be, and establishes indirect jurisdiction over that labor, by regulating the ultimate cross-border movement of goods.

I can understand why it might be hard for China to accept this. We haven’t been talking about it for a very long time. And also, a socialist dictatorship knows that it can do no wrong. But in a capitalist economy, the customer is always right.  Immovable object, meet irresistible force. In this case, the largest consumer economy in the world has chosen to dictate the terms of its consumption. And not just that; no individual American wants to buy anything made with forced labor, Uyghur or otherwise.

The absence of a contrary constituency—call it, a “pro forced labor” constituency—used to puzzle me. If there is no constituency for forced Uyghur labor (and I’ve yet to encounter any), and we’re all rowing in the same direction, then who exactly are we contending with?

While watching Xi Jinping’s remarks in San Francisco, I finally understood the answer. Near the end of his speech to an audience of American businesspeople, Xi concluded with this:

China has no intention to challenge the United States or to unseat it.  Instead, we will be glad to see a confident, open, ever-growing and prosperous United States.  Likewise the United states should not bet against China, or interfere in China’s internal affairs, instead it should welcome a peaceful, stable, and prosperous China.

(Emphasis added.) And the room erupted in applause.

At that moment, I realized that the opposite of opposing forced Uyghur labor isn’t supporting it. Rather, it’s deciding that forced Uyghur labor in international commerce is trivial, or agreeing that it’s an internal Chinese affair. And being willing—maybe even eager—to look the other way.