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Washington Outlook Archive
James A. Morrissey, Washington Correspondent

Administration Moves To Limit Chinese Imports

James A. Morrissey, Washington Correspondent

H elp for the beleaguered US textile industry may be on the way, as the Bush administration appears to be taking serious steps to combat a surge in Chinese imports of textiles and apparel. Whether the aid will come in time and whether it will have any long-term effect remain to be seen.

Last month, the administration responded to a major surge in three apparel product categories by self-initiating safeguard measures that could lead to the imposition of quotas on Chinese imports.

Right on the heels of that action, a textile/labor coalition filed petitions covering 14 product categories, bringing to more than two dozen the number of petitions brought by the industry.

Products covered in the government’s petitions are cotton knit shirts and blouses, cotton trousers and cotton and man-made fiber underwear — products that textile manufacturers consider some of the most heavily import-impacted. The industry petitions face a months-long process that could postpone any help until late summer or fall, but the self-initiated process on three of the most critical product categories could be completed much more quickly.

Textile and apparel import data in the early months of this year following the January 1 removal of import quotas have sent shock waves throughout the domestic textile industry. Its representatives in Washington said the data clearly show how the Chinese are targeting key markets and shipping massive amounts of clothing that eventually will monopolize the markets. They are calling on the US government to take immediate steps to impose quotas on Chinese imports. In the face of a major surge in Chinese imports, the industry representatives have called upon the government to immediately self-initiate safeguard measures that would permit imposition of one-year quotas with a 7.5-percent annual growth rate.

Although the industry and its labor union have filed a number of safeguard petitions based on market disruption or a threat of market disruption, the self-initiating approach is new, and would require considerably less time than the industry petitions.

Pointing out the industry-sponsored petitions process takes months and China’s import base is growing rapidly, Cass Johnson, president of the National Council of Textile Organizations, Washington, said, ”A long drawn-out safeguard petition process will only ensure that thousands of US textile workers will lose their jobs to China’s unfair and predatory trading practices.” Johnson pointed out that if an industry-sponsored safeguard procedure were started now, it would be at least September before quotas could be put in place, and that would result in only a three-month life for the quotas. At that point, the only way to get any meaningful results would be to re-file the petitions as they expire, seeking year-to-year extensions.

Importers of textiles and apparel, who say they share the industry’s concern over domination of the market by China, said this is no time to panic, and the early data do not necessarily constitute a trend. The US Association of Importers of Textiles and Apparel, New York City, contends “there is no current basis for safeguard measures whether self-initiated or by request of the US industry.”

However, Tantillo argued the surge in Chinese exports is “just the tip of the iceberg,” and if history is any indication, Chinese imports will continue to soar and gain a virtual monopoly of the US market.

With all of these activities underway in the United States, European textile manufacturers now have joined the effort to enact safeguards. EURATEX, the major textile and apparel trade association in Europe, has filed 12 petitions with the European Union seeking action similar to that taken in the United States.

Could There Be A Deal On CAFTA?

While no one is willing to admit it, there are persistent rumors in Washington that the administration is using the textile safeguards as a trading chit to get the textile industry and its supporters in Congress to support or at least soften their opposition to the Central American Free Trade Agreement (CAFTA) that currently is awaiting congressional approval.

Textile manufacturers strongly oppose the pact in its present form because it contains provisions that would permit non-signatory nations — including China — to benefit from the trade preferences for a given amount of imports.

The administration has stated flat out that it will not renegotiate the pact and is going to seek ratification in its present form. It does not appear at this time that the administration has enough votes in Congress to win approval, due in part to opposition from textile manufacturers and some agricultural interests, including the powerful sugar lobby.

At least at this point, textile lobbyists say the safeguards and CAFTA are two entirely separate issues. While they contend the government’s actions on safeguards are “a step in the right direction,” they maintain — at least at this point in time — they are not enough. That question will play out over the next few weeks, as Congress begins consideration of CAFTA.

New Trade Rep Has Tough Agenda

US Trade Representative (USTR) nominee Rob Portman faces a tough road ahead as he works to implement President Bush’s “bold trade agenda.” That agenda includes regional and individual country free trade agreements, efforts to get better overseas market access for US products, elimination of trade barriers and work towards the completion of the worldwide Doha Round of trade liberalization negotiations.

Portman has earned a reputation as a strong supporter of free trade, developed during his service on the trade subcommittee of the House Ways and Means Committee.

As a Republican member of Congress from Ohio — a state that has been plagued by steel import problems — Portman has supported measures to help the steel industry combat imports.

New Handling Of Trade Data Should Be A Plus

As the Bush administration grapples with ways to deal with growing textile and apparel imports, the Commerce Department’s new procedures for publishing data on a more timely basis should be a real plus.

The textile industry has long cited a delay in publishing trade data as something that has undercut textile programs. In connection with the current efforts to get safeguards based on market disruption or a threat of market disruption, the delay in getting data has resulted in making safeguards less effective than the industry would like.

By the time data became available and petitions went through a months-long evaluation process, it would be near the end of the calendar year, and any safeguards that might be granted would be in effect for only a short period of time and would have to be rolled over on the basis of new petitions.

Under the new system for monitoring trade data, the Commerce Department and the general public will have much more timely access to trade data from the US Customs and Border Protection Agency. The new system will enable policy makers to more quickly analyze the impact of imports on the US market. Under this new system, preliminary trade data will be published biweekly at http://otexa.ita.doc.gov — a website maintained by the Commerce Department’s Office of Textiles and Apparel.

May 2005