What Is A Forced Labor Import Ban?
Prepared Remarks for the 2022 China Forum
On December 6, I had the privilege of participating in the China Forum, an annual event hosted by the Victims of Communism Memorial Foundation, on a panel with Shelly Han (Fair Labor Association), Irina Bukharin (C4ADS) and Virginia Wake (CBP - Forced Labor), moderated by Dr. Adrian Zenz. We had a vigorous and illuminating discussion, and I’m sharing my prepared remarks this week on FLT.
I appreciate events like this not only for the many extraordinary conversations they facilitate, but also for the chance to step back, articulate the broader picture, and offer a crisp assessment. I hope this is helpful to you.
Thank you to the Victims of Communism Memorial Foundation for convening the China Forum, and facilitating these important discussions within a framework of moral clarity about the inherent dignity and worth of every human.
Thank you also to Dr. Adrian Zenz both for inviting me to address the Forum this year, and for his tireless work on researching and documenting the many grievous dimensions of the programs of ethnic subjugation and social control in and outside of Xinjiang. I am honored to be here with you today.
As we approach six months of enforcement of the Uyghur Forced Labor Prevention Act, I wanted to take this opportunity to offer views both on the successes of the law, and where significant unaddressed challenges remain.
I am a close observer of the Uyghur Forced Labor Prevention Act, both in my capacity as an advisor to companies engaged in cross-border trade, and as a writer and commentator on the use of trade laws to eradicate supply chain links to forced labor. I understand the enormous weight of expectation that has been placed upon this law, functioning as arguably the marquis piece of U.S. legislation explicitly dedicated to the protection of human rights.
At the conclusion of these remarks, I will speak directly to the question of the UFLPA’s successes and shortcomings, highlighting a few of each. But first, I find it necessary first to speak to the nature of this law.
When I listen to people talk about the Uyghur Forced Labor Prevention Act — and by people, I mean elected representatives, Hill staffers, journalists, human rights activists, and of course, compliance personnel at importing companies — I hear a LOT of different ideas about what this law is, and therefore, on what it is expected to accomplish. Without a consensus on those questions, it is difficult to find agreement on whether the law is fundamentally a success—even among those who view these challenges with crystal moral clarity.
What is the UFLPA? In one sense, considering that we are discussing this at the China Forum at the Victims of Communism Memorial Foundation, it is an easy question to answer. This is a law that endeavors to change certain abhorrent behavior by a specific communist regime.
But in another sense, this is a very difficult question to answer, because it is a law without analogue.
The UFLPA is unlike most laws deployed to curtail problematic behavior by foreign regimes—conventional form economic sanctions. It is not a blunt instrument intended to inflict broad economic harm and incentivize changed behavior. (This is probably a good thing, given the dismal track record of broad-based sanctions in achieving targeted reforms.)
The UFLPA is dissimilar from other laws leveraged by the United States in the context of the U.S.-China trade dispute. The broad-based tariffs imposed by the previous U.S. administration were an attempt to remediate and retaliate against specific harm. The current U.S. administration has allowed the tariffs to remain as a means of preserving leverage in negotiations. The UFLPA is not intended to remediate Chinese forced labor, nor is it strictly speaking a retaliation against the practice. Given the apparent reluctance of U.S. officials to broach the topic of human rights abuses with their Chinese counterparts, one can safely assume the UFLPA was not imposed to establish leverage in the bilateral relationship.
Wherever one might look for a reference point, dissimilarities abound. The UFLPA is not a narrowly tailored instrument designed to influence the decision-making of influential individuals. It therefore doesn’t meet the definition of a targeted sanction, like its cousin in the human rights space, the Global Magnitsky Act.
On its face, the UFLPA seems like it might qualify as a so-called “business & human rights” law. But it mandates neither due diligence nor corporate disclosure, and so is an outlier from that class of laws as well.
It presents like a riddle. What type of law:
aims to change the behavior of a foreign state, but is not an economic sanction
is borne in reaction to egregious conduct, but neither remediates that conduct nor, strictly speaking, retaliates for it, and
uses the word “labor” 53 times, but is not a labor law?
The answer is that the UFLPA is a variety of import ban. Or more specifically, an augmentation of the U.S. forced labor import ban.
Now, this is an answer that raises more questions still. Because, while the U.S. forced labor import ban (Section 307 of the Tariff Act of 1930) has been around for nearly a century, it is simultaneously the hottest, newest trend in human rights laws. The U.S. has only owned a clean forced labor import ban since 2016, and isstill figuring out how best to make it work. Canada just bought a forced labor import ban, and frankly seems mystified on how to operate it. Mexico has signed a contract to buy, and the European Union and the UK have been spotted in the showroom.
The questions of
what is a forced labor import ban?
why is a forced labor import ban important? and
how should a forced labor import ban operate?
have received amazingly little attention—especially given the outrageously high levels of support this type of law enjoys. Indeed, these questions have been overlooked almost entirely within trade policy circles.
So before I come back to the initial question of where the UFLPA has been a success and where challenges remain, I will briefly address each of these neglected questions.
What is a forced labor import ban?
In the world of international trade, market access is the standard against which all is measured. Obstacles that prevent goods from reaching a particular market are called barriers to market access. This includes taxes or tariffs that make it more expensive to trade, and limitations on the allowable amount of trade (known as quotas).
Of the myriad barriers to market access, the import ban stands as king, because you can’t do anything more drastic to problematic trade than stop it. If companies that lie or cheat in order to continue trading foul goods, you can whack them with penalties or other more severe forms of legal liability. But when it comes to the trade itself, an import ban is the nuclear option. Once effective, there is nothing left to negotiate.
Increasingly, there is interest in using import bans to stop all manner of problematic trade—trade linked not just to forced labor, but also to environmental harms like deforestation, or illegal, unreported and unregulated fishing. There have been discussions recently on expanding U.S. legal authority to ban imports linked to illegal foreign trade practices. A judge at the U.S. Court of International Trade just ruled to give effect to an import ban on seafood, in order to protect minority population of about 3 dozen dolphins living off the coast of New Zealand.
Against these manifold applications for an import ban, we can consider the second question, which is:
Why Specifically is a Forced Labor Import Ban Important?
And make no mistake about it. A forced labor import ban is important. Of all the bills that passed the 117th Congress, there was almost no substantive legislation as popular or as bipartisan as the Uyghur Forced Labor Prevention Act. The bill to ban the import of Russian oil had 900% more Congressional opposition than the UFLPA, with 9 votes against in the House. The bill to revoke Russia’s Permanent Normal Trade Relations status had 300% more Congressional opposition than the UFLPA, with 3 votes against in the House.
How aggressively are the people of the United States demanding an end to the trade of goods made with forced labor? So much that only a single elected representative—an arch-libertarian from Northern Kentucky—was willing to oppose it. Every other elected U.S. official took stock of the constituents they represent, and knew exactly to stand.
A forced labor import ban is important because it speaks to the one thing that the average consumer is pretty darn certain to be true about international trade: there’s a lot of imported stuff made with slave labor. And you know what? We might quibble over this goldilocks dilemma: whether there’s a lot, or a little, or maybe just a medium amount of trade in slave-made goods. But that swipe at the “rules-based” system of international trade as more-or-less indifferent to the question of trade in slave-made goods? It connects.
A forced labor import ban is thus important for a number of reasons. It is important as a statement of values, but it must be more than a means for signifying virtue. Wielded wisely, it offers legitimate hope to alter odious conduct far beyond the borders of the United States. It does this not in the manner of sanctions (I will inflict pain until you do as I say), but rather by articulating the precise conditions for obtaining the opiate of free enterprise: free trade.
Which leads me to the final question:
How should a Forced Labor Import Ban Operate?
One would think that for all the attention given to the Uyghur Forced Labor Prevention Act, and all the dialogue about using trade laws to target goods made with forced labor, this question would have a broadly accepted answer. But that is not the case.
As far as I can tell, this is a question that has essentially never been the subject of a serious policy discussion in Washington. Knowledge of any debate or discussion when the U.S. forced labor import ban was enacted in 1930 is both long forgotten and inapplicable to the reality of modern global supply chains. How a modern forced labor import ban would operate was also not significantly discussed or debated in 2016 when the law was revised to remove a longstanding loophole. In 2021, as the UFLPA was negotiated and enacted, a lot was debated, but again, as far as I can tell, little if any of that debate was focused on the fundamental questions of how a forced labor import ban should operate.
While it is beyond the scope of this event and these remarks to try and answer that question, I will offer one guiding principle. To be effective, a forced labor ban must be specific in defining what trade is problematic—and prohibited—and what trade is not. It must be enforced specifically, as well, able to separate the wheat and the chaff. I urge you to keep that in mind as I offer you this summary of the successes and shortcomings of the UFLPA to date. Without further ado:
UFLPA Successes
The United States has made an unambiguous determination that, for purposes of U.S. trade law, the programs of social control targeting Uyghurs in and outside of Xinjiang include forced labor.
The level of attention and funding associated with the UFLPA has turned the forced labor import ban from being a parochial concern, all but ignorable, to a priority issue that demands attention from the C-Suite.
UFLPA Shortcomings
CBP has virtually no ability to identify imports that do contain inputs from Xinjiang or UFLPA Listed Entities. CBP cannot yet even certainly identify goods manufactured or shipped directly from Xinjiang to the United States. Therefore, educated guesswork figures figures prominently into CBP’s approach to UFLPA enforcement—far more than in the enforcement of any other trade law.
Every importer that has run into a UFLPA detention and chosen to submit materials in response, has opted to make a showing that is not addressed, governed, or otherwise provided for by the UFLPA.
UFLPA enforcement has almost certainly been simultaneously over-inclusive, and under-inclusive. That is to say, CBP certainly targeting a significant amount of trade that is probably not supply chain linked to Xinjiang or a UFLPA Listed Entity, and there is still much trade that contains supply chain links to Xinjiang or UFLPA Listed Entities that crosses the border unabated.
CBP lacks the legal authority to seize goods made with forced labor. Though it has not publicly acknowledged this deficiency of the law, the logical implication is that even when CBP successfully identifies goods with a supply chain link to Xinjiang or a UFLPA Listed Entity, CBP’s enforcement authority is limited to denying entry, for the goods to be redirected elsewhere.
Thank you. I look forward to your questions.
There is a double "figures" in item one of "UFLPA Shortcomings."