China Set to ''Dominate'' Textile, Apparel Trade
New report forecasts shifts in US supplier base after quotas end in 2005
WASHINGTON, DC - 02/11/04 - China is expected to become the supplier of choice for most US textile and apparel importers after the expiration of quotas in 2005 under the Uruguay Round Agreement on Textiles and Clothing, a US trade panel says.
China is poised to become a dominant player in the US textile and apparel market because it has the ability to make almost any type of textile and apparel product at any quality level at a competitive price, the US International Trade Commission (USITC) has said in a just-released report on the effects of the new textile and apparel trade regime.
The report said, however, that it is difficult to assess how fast textile and apparel imports from that country are likely to grow because of the uncertainty over the use by the US and other importing countries of the textile-specific safeguard provisions in China's World Trade Organization accession agreements.
In November, 2003 the Bush Administration imposed quotas on three types of textile products imported from China under the provision allowing such measures in instances when Chinese imports are causing domestic US market disruptions.
The USITC report said that the growing role of imports from China is likely to cause significant shifts in the US overseas supplier base. To reduce the risk of sourcing materials and products from one country, US importers plan to expand trade relationships with low-cost countries other than China, particularly India, it said.
Bangladesh or Pakistan is expected to emerge as a major supplier for a narrow range of products, it added.
While many countries' share of the US market is likely to decline, a large number of overseas economies are expected to become second-tier suppliers in specialized goods and services, the report said.
Because of geographic proximity and associated low shipment costs, Mexico and Caribbean countries are likely to remain the first-line producers of fast-selling and late-order products, the report said.
The report also concluded that either a Central American free trade agreement or a more comprehensive Free Trade Area of the Americas agreement is expected to boost textile and apparel imports from the hemisphere, especially from Central American and Caribbean markets, if it allows the use of third-country fabric.
The free trade agreement between the US and El Salvador, Guatemala, Honduras, and Nicaragua concluded in December, 2003 contains a provision that would allow duty-free imports of some apparel made in those countries that contains certain fabrics from Mexico and Canada.
To become law, the agreement, which was later joined by Costa Rica, has to be approved by Congress.
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