~$200 million
* U.S. Attorney’s Office, Southern District of Georgia.
On June 12, the U.S. Attorney for the Southern District of Georgia wrapped up a five-year prosecution of 24 individuals for a forced-labor scheme in onion- and blueberry-picking in southern Georgia, as the last three defendants — Brett Bussey, Margarita Rojas Cardenas, and Nery Rene Carrillo-Najaro — admitted to:
Ten days earlier, as the three were preparing their ‘guilty’ pleas, the Trump administration’s U.S. Trade Representative Office published a plan to impose tariffs of 12.5% on goods from 54 trading partners, and 10% on six more, claiming they don’t do enough to stop imports of goods made with forced labor. Together, the 60 economies — the EU and the U.K., China and Taiwan, Jordan and South Africa, Japan and the U.K., Australia and New Zealand, Chile and Peru, Mexico and Canada, etc. — provide about 97% of America’s imports. Extrapolating from the revenue temporarily sucked in by last year’s illegal “International Emergency Economic Powers Act” decrees, this will likely cost Americans around $100 billion a year.
The logic works like this: If foreign laws aren’t good enough, forced-labor “inputs” might flow into production chains. Their unnaturally low labor costs would make them artificially cheap. That in turn would make the final goods cheaper, displacing honorably produced American goods. As we noted last week, USTR’s report contains little actual evidence, but does feature four suggestive “case studies.” Two of these claim European Union members are depriving American malt liquor and cigarette businesses of some exports, as (i) Spain’s importing of Burmese rice “strongly suggests” that Spanish breweries might have purchased “at least some” rice produced with forced labor, and likewise (ii) Polish purchasing of tobacco from three Malawian companies placed under a CBP “Withhold Release Order” from November 2019 to May of 2021 blockage of imports of tobacco from three Malawi companies “strongly suggests” that “a significant proportion” of Poland’s tobacco imports before 2020 might have had forced labor content. Sample from the malt liquor passage:
“The TVPRA list [a Labor Department publication] has flagged rice from Burma as being at risk of forced labor since 2009. … While not all of Spain’s imports of rice from Burma were necessarily produced using forced labor, the prevalence of forced labor in rice production in Burma strongly suggests that at least some of Spain’s imports of rice were produced wholly or in part with forced labor. …Faced with higher input costs, Spain would have exported a lower volume of downstream malt beer products… [while] the United States would likely have experienced greater sales, revenues, and exports of malt beer, all else equal.”
Obviously, phrases like “at least some” and “strongly suggest” themselves suggest that the report’s authors aren’t really sure Spain or Poland bought forced labor goods. And more generally, though their unexamined premise about prices — forced labor means cheaper goods and a cost advantage — feels intuitively plausible and may sometimes be correct, it’s also sometimes clearly wrong.
The report’s specific claims about rice and tobacco, for example, don’t hold up well. It doesn’t include price data, but Burmese rice sells at $339/ton this month, only 3% below India’s $351/ton and about 10% below Asia’s $378/ton average; the U.S.’ $542/ton is far above the cost of not only Burmese, but any Southeast or South Asian mass-market rice. (And rice is a very small factor in malt liquor prices anyway, probably accounting for 0.5% to 2.5% of wholesale cost.) Likewise, Malawi tobacco costs about the same as tobacco from neighboring Mozambique. So at least in these cases, there’s no evidence of a big saving on input costs.
In the U.S., meanwhile, the Georgia case’s sentencing and indictment papers provide detailed information on the actual inner working of a large forced-labor enterprise in agriculture, which did not affect the cost of goods. Its operators ran a labor contracting company called Rojas Avila Harvesting with an office in Bacon County, along with several shell companies. Farmers in six adjacent counties paid them to recruit seasonal workers from Central America for seasonal harvesting of onions and blueberries from 2015 through 2021, including handling H2A visa fees and paperwork, along with wages, transport, and other labor costs. Once the workers arrived for their jobs, the Rojas Avila Harvesting officers confiscated their passports, took much of their wages, assigned them debts to cover the travel costs, and threatened them with violence should they try to leave or get help. The trials and evidence since 2022, and journalistic accounts like this one from ProPublica, report that the scheme trapped at least 500 men and women in forced labor and brought its authors over $200 million. Though one farmer pleaded guilty to participating in the scheme, most appear to have been unaware of Rojas Avila’s actions.
Some tentative lessons:
ILO research validated: The Rojas Avila Harvesting scheme closely matches the International Labour Organization’s description of the nature of forced labor worldwide. ILO’s reports argue that withholding of wages, confiscation of passports, and debt bondage are especially frequent forms of forced labor; consider threats of violence relatively common; and believe risks are especially high for migrant workers. This fits Rojas Avila’s operations perfectly, suggesting that forced labor in the U.S. may not differ drastically from forced labor in other countries.
Forced-labor enterprises don’t always charge low prices: USTR’s report assumes forced-labor enterprises naturally sell their goods at below-market prices, but that’s not how the Rojas Avila Harvesting scheme worked. Its managers just diverted wage payments from workers to themselves to get as much money as they could. The onions and blueberries that its unlucky workers picked appear to have gone into American food industry and grocery supply chains at standard market prices.
U.S. itself not free of forced-labor goods: Between 2015 and 2020, the U.S. exported blueberries to 59 countries and onions to 80, with Canada the largest buyer and Caribbean island countries most reliant on U.S. supply. Press coverage suggests the farms contracting with Rojas Avila Harvesting sold to domestic buyers rather than exporting, so these particular berries and onions might not have entered international supply chains, but at this point certainty may be impossible. And while abuses on the scale of Rojas Avila Harvesting are likely rare, each year since 2020 the DoJ has prosecuted 183 to 208 people for forced labor and human trafficking crimes a year since 2020, it would probably be naïve to consider them wholly unique.
Against that background, the logic USTR employs for Spanish malt and Polish cigarettes would encourage worldwide policies along the following lines:
Again, forced labor remains an egregious human rights violation in the United States or anywhere else, and forced-labor trade an appropriate target for policy. But Americans, as well as targeted countries, would have strong and well-founded complaints about a policy like this. As the EU, Canada, the U.K., Korea, Australia, New Zealand, Japan, Taiwan, and dozens of developing countries do about the administration’s claims about them. All, really, should view forced labor not as a pretext for tariff increases, but a human rights and law-enforcement concern broadly shared and requiring sustained cooperative work to solve.
PPI’s four principles for response to tariffs and economic isolationism:
USTR’s “Section 301” report calls for tariffs on goods from 60 trading partners, alleging insufficient laws against forced labor imports.
Meanwhile:
The Justice Department’s 2021 indictment of 24 Rojas Avila Harvesting officers and employees.
On June 12, the U.S. Attorney for the Southern Georgia District announces the final sentencings.
ProPublic tells one trapped worker’s story.
And a surreal footnote: One farmer participated in the scheme and pleaded guilty in 2022. Others appear to have been duped. One of the latter, a blueberry proprietor and now Georgia State Senator, apparently unaware of the abuses, actually appeared at a USTR hearing in 2020 with a retrospectively brazen appeal for high tariffs on Mexican blueberries, arguing that supposedly low Mexican wages and labor standards provided an “unfair cost advantage” over Georgia businesses.
Compare & contrast:
Trump admin. scraps U.S. support for forced labor reduction abroad.
The Biden administration’s four-year program against forced labor and human trafficking.
And EU law on trade in forced labor products.
International research and data:
The International Labour Organization studied the scale of forced labor as of 2021.
… and profits drawn from it.
U.S. data and policy:
DHS summarizes forced labor cases by industry type.
The Justice Department on forced labor and human trafficking prosecutions.
CBP’s Withhold Release Orders and Findings since 2017.
… and similar data on Uyghur Forced Labor Prevention Act seizures.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
