China Apparel Quota Issue Heats Up
Trade group takes the Commerce Department to task as textile, apparel quotas are set to be lifted January 1
WASHINGTON, DC - 12/06/04 - A major textile industry association has filed a lawsuit to prevent the US Department of Commerce from considering the imposition of import quotas on textiles and apparel imported from China.
The New York-based Association of Importers of Textiles and Apparel (USA-ITA) said in a statement that it went to court last week seeking an injunction to stop the US government from "wrongly considering imposing safeguards against products of China."
USA-ITA said the Commerce Department and four other agencies that comprise the Committee for the Implementation of Textile Agreements (CITA) were "accepting requests from anonymous petitioners based solely on 'anecdotal bits and pieces of information' in violation of importers' due process rights."
USA-ITA Executive Director Laura Jones said CITA had "changed the rules" that banned petitions based "on some future threat" and that "guaranteed that only when current data was available showing an increase of imports would the safeguard process be deployed."
The government's action on safeguard petitions, she said, are "misguided," she said, asserting that US manufacturers are making a "bogus attempt" to blame others for their failure to compete.
Jones accused textile manufacturers - who have long voiced concerns that Chinese imports will dominate the market when decades-old global quotas end on January 1 2005 - of "attacking" their own customers and said "a better approach would be to create partnerships between the mills and their customers."
According to Textile World Magazine, in 2002, the CITA imposed one-year quotas with 7.5%-percent growth on three product categories-knit fabrics, cotton and man-made fiber dressing gowns and robes, and cotton and man-made fiber brassieres.
That decision was based on a finding by CITA that there was actual market disruption with the coalition expected to fill a new petition asking for a one-year extension of those quotas.
CITA also determined that imports of cotton, wool and man-made fiber socks are both disrupting and threatening to disrupt the market, and it has notified the Chinese government that a "unilateral quota will be imposed unless some agreement can be reached through bilateral consultations."
In October, the magazine reported, the coalition took a new tack and started filing petitions based on a threat of market disruption in view of the fact that all quotas are lifted in just a few weeks.
The CITA then accepted for review a petition based on a threat of market disruption for four categories of men's and boys', and women's and girls' pants.
Once a petition qualifies on a technical basis, the CITA will publish a notice asking for public comments on the proposal for 30 days. After that, the CITA has 60 days to reach a decision, and if the decision is favorable it will notify the Chinese government that it wants to engage in consultations on a bilateral agreement.
If agreement is not reached after the consultations, the administration can impost a one-year quota with a 7.5% growth rate.
The coalition has filed five additional petitions based on a threat of market disruption for wool trousers; men's and boys', and women's and girls' cotton knit shirts; men's and boys', and women's and girls' man-made fiber shirts; non-knit cotton and man-made fiber shirts; and cotton and man-made fiber underwear.
Retailers across the country have sharply attacked the threat-based petitions charging that they will continue what they call the "failed protectionist practices of the past 40 years."
Eric Autor, vice president and international trade for the National Retail Federation, told the trade magazine that, "If US retailers can't get sufficient merchandise from China, they'll simply turn to other foreign manufacturers, not US manufacturers."
Domestic manufacturers in the US, "who have trouble competing with China on the products in question refuse to acknowledge that the apparel market today is global, and they need to engage in that market."
The only people who would benefit from continued quotas, he added, "are a handful of Chinese businessmen who hold quota allocation rights," Autor said.
China has responding to the quota threat warning Washington last month that any import quotas placed on Chinese textile products "would seriously impact bilateral trade ties," and that it "reserved the right to take up the issue with the World Trade Organization."
A Commerce Department spokeswoman quoted last week in The Wall Street Journal said Washington "would stand by its decision to accept the petitions."
The government, she said. "has ample authority under US law to take the safeguard actions requested by the petitioners."
The petitions by US-based manufacturers are based on a special safeguard arrangement that China agreed on during its entry negotiation with the WTO in 2001.
According to the arrangement, a WTO member state can continue to limit Chinese textile imports on the grounds they may cause "market disruptions" or threaten to impede "the orderly development of trade".
The Bush Administration has 10 days to respond to the USA-ITA lawsuit.
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