Coalition scores victory with China textile quotas
By Susan M. Andrews -- Furniture Today, November 23, 2003
Washington — A coalition of U.S. textile groups scored a victory last week when the government decided to impose temporary quotas on three types of textile imports from China.
The coalition filed petitions in July asking the government to implement the "textile safeguard," a provision that allows the United States and other World Trade Organization members to impose temporary quotas on textile imports from China if their markets are disrupted and trade is threatened.
The temporary one-year quotas, likely to go into effect within 90 days, will cover knitted fabric, dressing gowns and robes, and cotton brassieres, and will hold China to a 7.5% increase in these categories unless a higher number is negotiated with the Chinese. That's significant, considering that U.S. imports from China in the past two years in those categories have soared 600%.
While those categories cover a little less than 5% of China's textile and apparel shipments to the United States, Lloyd Wood, director of media relations for the American Manufacturing Trade Action Coalition, said the domestic textile industry intends to file as many China safeguard petitions as necessary to obtain a U.S.-China agreement that covers most of the more than $10 billion in imported textile products from China.
Auggie Tantillo, Washington coordinator for AMTAC, said that while furniture fabrics from China are still under quotas, the hope is that the initial safeguard will blossom into a comprehensive arrangement that will preclude the need for safeguards for upholstery fabrics when their quotas disappear on Jan. 1, 2005.
"Hopefully, by this time next year, we will have a structured arrangement in place that makes sense for everybody," he said.
Last week's move provides some temporary relief to the American companies that blame Chinese imports for bankruptcies, mill closings and layoffs in a domestic textile industry that has lost a third of its workforce, or 316,000 jobs, since 2001 when President Bush took office.
U.S. Commerce Secretary Don Evans said the decision "demonstrates the Bush administration's commitment to our trade rules and America's workers. I believe this will advance our future dealings with China, for no market operates fairly without open dialogue."
"This is only the beginning," said Cass Johnson, interim president of the American Textile Manufacturing Institute. He said the decision "sends a strong signal to Chinese officials that they should take immediate steps to cease their attempts to dominate international trade in textiles and apparel, including an immediate end to China's blatant manipulation of its currency."
China poses a challenge for American producers of upholstery fabric.
Roger Berkley, president of Weave Corp., said the flooding of the mass market with cheap Chinese imports "not only squeezes the ability of the U.S. mills to make money, but it has also threatened to put U.S. raw material vendors, spinners and dyers out of business, making sourcing more difficult."
"I have always favored open markets and the inclusion of China in the WTO," said Larry Liebenow, president and CEO of Quaker Fabric. "The problem we haven't resolved is the strain that comes from the interfacing of such a large non-market economy — China — with a highly developed market economy — the United States.
"Efforts to tackle these issues, whether it's to get China to de-peg is currency from the dollar and let it increase, or petitions like the one from the bedroom manufacturers related to the antidumping question or the textile safeguards like the ones recently announced — all these are rough efforts to deal with the fundamental issue, which is that China is a non-market economy," Liebenow said.
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