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Textile Firms to Seek Import Restrictions

U.S. manufacturers cite the 'threat' of Chinese products flooding world markets when quotas end this year.

September 02, 2004|Evelyn Iritani | Times Staff Writer

U.S. textile and apparel makers stepped up their fight against cheap foreign goods on Wednesday, announcing plans to ask the Bush administration to restrict imports of dozens of categories of Chinese apparel and textile products.

The manufacturers want the U.S. government to impose restraints based on the "threat" that imports of Chinese-made T-shirts, khaki pants, towels and other products will surge after global quotas on apparel and textile products are removed at the end of this year.

U.S. manufacturers have never sought restraints against China under global trade laws based on the threat of damages rather than actual harm. But they argue that Washington must move sooner rather than later, given China's already significant inroads into the U.S. market.

Without some restraints, domestic textile and apparel makers predict, China will take over world textile and apparel markets when the quotas cease, triggering the loss of millions of jobs in the U.S. and elsewhere. They have allied with poor nations in an effort to persuade the World Trade Organization to delay the quota system phaseout for three years. The decades-old system allots quotas for countries to sell apparel and textiles to the U.S. and other developed countries.

Sluggish job creation has been a major topic in this year's tightly fought presidential election, prompting U.S. textile and apparel makers to step up lobbying efforts in Washington in recent weeks.

Although many believe it is unlikely the U.S. government will accept the petitions based solely on the threat of injury, the manufacturers hope their actions will bolster the Bush administration's effort to persuade China to voluntarily restrain its exports. U.S. Undersecretary of Commerce Grant Aldonas is slated to travel to Beijing next week to discuss trade matters.

Auggie Tantillo,a former U.S. trade official and executive director of the American Manufacturing Trade Action Coalition, said the group had been assured by the Bush administration that it was "well within our rights" to file a petition based "purely on threat" that considered China's exporting record and "enormous" production capacity.

The petitions will seek redress under safeguard rules reluctantly agreed to by China as part of its admission into the WTO. Under those rules, China agreed to allow countries to impose temporary restraints if the lifting of apparel and textile quotas resulted in a surge of imports that threatened domestic producers.

In those instances, countries were allowed to impose a one-year quota on Chinese goods that was 7.5% larger than the previous year's imports.

U.S. manufacturers said they would file the petitions in the "very near future" and push for a quick decision from U.S. trade officials, given China's recent gains in the U.S. market. The U.S. government is required to make a ruling within 90 days of accepting a request for safeguard action.

As of June, China had captured a 72% share of the U.S. import market in 29 categories released from quotas in 2002, according to the American Manufacturing Trade Action Coalition. That eleven-fold increase in Chinese market share included a variety of categories, including baby clothing and women's nightgowns.

Critics of restraints, including major retailers and other importers that benefit from low-cost goods, said the chances of the petitions being accepted are slim. They said under WTO rules, the U.S. must wait until quotas are lifted and there is evidence of a surge in Chinese imports before imposing any restraints.

"As long as a product is not quota-free, there is no legal basis for that action," said Brenda Jacobs, advisor to the U.S. Assn. of Importers of Textiles & Apparel, a Washington trade group.

U.S. trade officials have taken a similar stance in the past. Commerce Department spokeswoman Mary Brown Brewer would not comment on Wednesday's announcement but said her agency required "sufficient specific factual data" to determine whether imports were "disrupting or threatening to disrupt the U.S. market."

As for China, its government would be loath to accept a voluntary restraint because it already faces much tougher restrictions than other producers, said Nicholas Lardy, a China expert at the Institute for International Economics in Washington.

Chinese officials had no comment.

China depends on its export-oriented manufacturers to provide jobs for millions of people that are leaving farms and defunct state-owned firms.

U.S. importers say consumers are the biggest losers in the present system because they pay billions of dollars extra for apparel and textile goods under quota.

They also dismissed the claim that China posed a new threat to U.S. manufacturers, given America's decades-long embrace of cheap textile and apparel imports.

Even if Washington imposed restraints on China's imports, which it did last year on Chinese-made bras, nightgowns and knit fabrics, importers predict orders would shift to other low-wage countries instead of returning to higher-cost U.S. factories.

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