19 May 2005

(Quotas imposed on more products, Commerce Department says)

Washington -- The United States is expanding its list of textile and apparel products from China that are subject to temporary quotas.

In a May 18 news release, the department said that an interagency group it chairs -- the Committee for the Implementation of Textile Agreements (CITA) -- has determined that a surge in imports of certain men’s and boy’s shirts, trousers, knit shirts and blouses, and combed cotton yarn from China is threatening to disrupt the U.S. market.

Increases in imports by quantity of these products ranged from 120 percent to 328 percent in the first quarter of 2005 from the same period in 2004, following the expiration of the global textile quotas system on the last day of 2004, according to the department.

The new quotas will limit the growth of 2005 imports from China in those categories to 7.5 percent above the previous year’s level.

The May 18 decision followed Bush administration action May 13 to impose temporary quotas on imports from China in three other clothing categories.

These actions are allowed under China’s World Trade Organization (WTO) agreements, the release said.

“We will enforce our trade agreements to ensure that U.S. companies get a fair deal as they compete in the global marketplace,” Secretary of Commerce Carlos Gutierrez said in the release.

Chinese officials have criticized the earlier decision as a violation of the WTO agreement on textiles and apparel.  Following the May 18 announcement, however, Chinese Foreign Ministry spokesman urged the Bush administration to resolve the problem “through dialogue and in a constructive manner,” according to news reports.

The quotas will take effect when the Bush administration calls for official consultations with China on a solution, expected by the end of May.  “We will consult with the Chinese to find a solution that will permit the orderly development of trade in a quota-free environment,” Gutierrez said May 13. If a “mutually satisfactory agreement” cannot be reached by the conclusion of the consultations period, the quota will remain in place through the end of 2005, the release said.

The committee resumed consideration of requests for the imposition of temporary quotas in 12 categories after a federal appeals court lifted a December 2004 injunction placed by the U.S. Court of International Trade on CITA proceedings related to those requests, the release said.

U.S. textile and apparel industries, which have lost many jobs partly because of competition from low-cost producers in developing countries, petitioned the Bush administration to introduce safeguard actions temporarily restricting certain categories of textile and clothing imports from China.

U.S. clothing importers, who have opposed import restrictions, have criticized the administration’s action.

In a separate development, the European Union warned China May 17 that it would use sanctions against textile imports from that country if China did not act to curb exports.

For additional information see a Washington File series on U.S.-China economic relations.

The full text of the news release on CITA is available on the Department of Commerce Web site.