(Washington Post)
Eighteen days before the end of a 30 year-old system restricting international trade in textiles and apparel, the Bush administration is imposing new barriers on imported clothing that is likely to curtail an expected
flood of Chinese imports in the first few months of next year.
The administration's measures include an embargo that will be imposed throughout the month of January on some of the clothing shipped to the United
States during the final months of 2004.
The new rules, scheduled to be published today in the Federal Register, were posted in recent days on a government Web site. Word of their impending imposition has stirred
anger among clothing retailers and importers, who contend that the barriers contravene an international agreement to open the worldwide textile trade starting in 2005. Administration officials counter that the measures
are justified because the amount of clothing shipped from some foreign countries in 2004 exceeded legal limits.
The dispute is emblematic of the pitched political battles that many experts predict will continue
well past Jan. 1, when the global textile trade is supposed to become much more free and similar in nature to markets such as automobiles and consumer electronics where supply-and-demand forces prevail.
On that
date, the quota system that has governed the textile trade since the mid-1970s will expire, eliminating rules that capped the amount of trousers, shirts, sweaters, towels and other such items that each developing
country was allowed to ship to the United States, Europe and Canada. That system was aimed at protecting the domestic textile industries of the rich nations, and once it ends, allowing countries to ship as much as they
can sell, China is widely forecast to garner the lion's share of the world market because of its low costs, enormous labor supply and competitiveness.
The U.S. textile industry is determined to continue fending
off the Chinese export juggernaut, however. It has filed petitions with the U.S. government seeking the imposition of "safeguards" -- caps on imports that the United States and other governments may put on
Chinese textile or apparel items if those items are flooding their markets. Beijing agreed to allow such safeguards until 2008 under the terms of its entry into the World Trade Organization.
The barriers on
imports to be unveiled today are different from the safeguards, which are still under consideration. Since shipments of certain types of clothing during 2004 apparently exceeded quota ceilings, an inter-agency panel,
the Committee for the Implementation of Textile Agreements, is imposing restrictions on the overshipped goods.
For such goods, "entry [into the U.S. market] will not be permitted until February 1,
2005," the new rules state. And after that point, Washington will allow the goods to trickle into the U.S. market based on a "staged" system, whereby the amount allowed each month into the market will be
five percent of the 2004 quota ceiling.
For example, if the government determines that more Chinese-made blue jeans were shipped to the United States in 2004 than the quota system allowed, the overshipped
Chinese blue jeans will be covered by the new barriers.
The rules don't specify which countries or which types of clothing are affected, but industry sources expect most of the impact to fall on Chinese imports,
the greatest area of concern. The rules include special restrictions on three categories of Chinese imports -- bras, dressing gowns and knit fabrics -- that were already subject to safeguard limits.
The action
"could have very serious and negative consequences for importers," the U.S. Association of Importers of Textiles and Apparel said in a Dec. 9 memo to its members. IDS Insider, an information service for
importers, told subscribers that that the administration "is clearly making every effort possible to appease the U.S. textile industry on the eve of the expiration of the . . . quota system."
By doing
a favor for U.S. textile producers, the administration may secure their cooperation on other trade issues, industry sources said. Some sources interpreted the administration's action as going further, effectively
accomplishing the same goal as safeguards by restricting imports shipped during 2005. But Mary Brown Brewer, a Commerce Department spokeswoman, said after conferring with a department attorney that the action "has
no applicability to any goods shipped after December 31, 2004. It is only applicable to goods shipped before January 1."
Advocates for the U.S. industry argued that American importers and retailers and
Chinese producers are getting what they deserve for having allowed clothing to be shipped in excess of the quota limits in 2004.
"This type of cheating and manipulation has been going on for years, and the
system has never properly deterred it," said Auggie Tantillo, Washington coordinator for the American Manufacturing Trade Action Coalition. "So from our perspective, this [the imposition of the new barriers]
is exactly what should happen, if not worse." |
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Update: China to Limit Some Textile Exports
with New Tax, Ahead of Quota Removal
(Canadian Press) China said Monday it will impose a new tax on textile exports, responding to U.S. and European pressure to limit them amid fears that low-cost Chinese textiles will flood
markets abroad when global quotas expire next month.
The tariff is to be imposed on unspecified textile products beginning Jan. 1, the Commerce Ministry said. It didn't say how high the duties would
be, so it wasn't clear whether they will satisfy Washington, which is considering whether to impose import limits.
Duties are to be based on the quantity of the export rather than the value of the
goods in order to "encourage high-end textiles," the Commerce Ministry said in a statement.
China is a dominant competitor in the annual $350-billion-US world textile trade.
World
Trade Organization members, including China, will see quotas on textile and clothing trade expire on Jan. 1 as part of a WTO agreement. The United States and the European Union worry that the change will
result in a glut of Chinese goods pouring into their markets, devastating domestic producers.
China's decision to impose export taxes should avert a trade war with the United States, the European
Union and other major economies, said Carl Weinberg, chief economist for Valhalla, New York-based High Frequency Economics.
"In a larger sense though, a big distortion to free trade remains as a
consequence of this decision," Weinberg wrote in a research report.
The administration of U.S. President George W. Bush has until February to decide whether to protect American textile companies
by imposing temporary limits on Chinese textile imports.
U.S. textile producers won the right to request such relief through 2008 as part of China's entry into the World Trade Organization three
years ago in 2001. Dozens of U.S. retailers, including J.C. Penney Co. and Liz Claiborne Inc., have filed suit to block the Bush administration from imposing textile limits, which would raise the price of
imported clothing and other goods.
China's commerce ministry statement also encouraged Chinese textile firms to invest overseas. U.S. clothing and textile producers are asking for restrictions that
would limit the growth of American imports of Chinese products in certain categories to 7.2 per cent a year. "For investors," Weinberg's report said, China's decision "adds value to the share
prices of Asian, North American and Euroland textile manufacturers simply by keeping them in business longer." |
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