*EPF306 01/07/2004
China Not Responsible for U.S. Job Losses, Business Group Says
(U.S. must support immigration to meet labor challenges, group's head says) (720)

By Andrzej Zwaniecki
Washington File Staff Writer

Washington -- China should not be blamed for the loss of U.S manufacturing jobs because these losses have nothing to do with that country, the head of the largest U.S. business lobbying organization says.

U.S. Chamber of Commerce President Thomas Donohue said that "massive" productivity increases allowing U.S. businesses do more work with fewer employees and lower demand for U.S. goods overseas stemming from the global economic slowdown have contributed to the U.S. job losses.

Some U.S. companies, organized labor and labor supporters in Congress have blamed China's trade and monetary policies rather than those factors for the contraction of employment in the U.S. manufacturing sector, which shed more than an estimated two million jobs in 1995-2002.

Donohue told reporters January 6 that U.S. companies move their operations to China not because that country offers them unfair advantages but, principally, because it is a large market with 1.3 billion consumers. In addition, he said, when these companies scale down or close their operations in the United States to source their products in China or other countries, they are looking not only for cheap labor but also for a more business-friendly regulatory and tax environment. The U.S. regulatory and tax systems often put businesses at a disadvantage in the global market, he added.

Donohue said that the United States must be tough and persistent in demanding that China fulfill its World Trade Organization obligations but those concerned about the U.S. manufacturing industries should not blame China for problems that the Chinese have not created.

Donohue praised the Bush administration for working patiently and consistently with China on resolving issues essential to good trading relations between the two countries.

"I think we've made continued, regular and vigorous progress [working with China] in that regard, quite frankly, faster than with others we have trade relations with," he said.

Donohue said the situation is quite different with regard to U.S. companies hiring technology workers in India, who provide their services via the Internet, because these companies cannot find enough computer and software programmers and engineers in the United States.

Donohue said that with the United States' large "baby boom" generation close to retirement age, the country will soon face a situation where job growth outpaces labor force growth.

"We're going to have jobs without people [to fill them] and people without jobs" because they will lack the skills required by an advanced economy, he said. He criticized the U.S. education system for not providing students education matching U.S. economic needs.

Donohue said that immigration and guest worker programs must be part of the solution in addition to improvements in the quality of education and more training opportunities.

The U.S. Chamber of Commerce has supported expanded visa programs to meet workforce needs at both the entry-level and highly skilled ends of the spectrum.

But Donohue said the Bush administration and Congress first have to find a way, without rewarding illegal activities and compromising national security, to grant legal status to those illegal immigrants who have been working in the United States for some time.

He said that an immigration initiative he expects President Bush to launch January 7 will only partly satisfy the chamber, but that maintaining the proper balance between security and the flow of people is more important than pressing for full reform.

Bruce Josten, the chamber's vice president for government affairs, said at the briefing that security concerns have overshadowed and stalled comprehensive immigration reform, which was already well advanced prior to the terrorist attacks of September 11, 2001.

"We have to look at this now much more broadly, and, hopefully, with more time and distance from September 11, we will move on it [immigration reform]," he said.

Josten expressed optimism about chances of getting the immigration debate back on track during the 2004 election year. He said that the administration as well as both major political parties are well aware that the business community, organized labor and immigration groups are in "total" agreement on the need for reform, and that immigrants' votes may play a "crucially important" role in the coming presidential elections.

(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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