Mon, Dec 13, 2004 - Page 11 News List

US textile import quotas: the end is nigh

VULNERABLE The Jan. 1 expiry date for US import quotas will flood that market with China-made clothing and `disrupt' their business, textile manufacturers say

AFP , WASHINGTON

US textile manufacturers are digging in for legal warfare to survive after the Jan 1, 2005 end of import quotas, which have so far held back a flood of "Made in China" garments.

A system of import quotas that has dominated the world textiles trade since the early 1960s is being phased out at the end of this year, leaving the necks of US producers vulnerable to China's sharp competitive edge.

Already this year, China-made textiles are expected to rise by more than 25 percent from the US$12 billion's worth imported the year before, and US producers fear an end to all quotas would be disastrous.

"We conducted a study: We are talking about 600,000 US jobs that could be lost in the textile, apparel, fiber related industries in the next few years," said National Council of Textile Organizations president Robert DuPress.

"China could wipe out entire segments of the US industry."

Textile makers contribute to US tax revenue and support local eco-nomies, often as the only major employer, he said.

But the quotas, enshrined in the 1974 Multifibre Arrangement and later in the WTO Agreement on Textiles and Clothing, expire at the end of this year.

"We are only looking at China and maybe one or two other countries being winners, everybody else will be losers," Dupress said.

"Our government and the WTO must work together to force China to change its predatory trade practices, to stop its currency manipulation to gain advantage, to stop its blatant subsidization of its industry," he said.

One of the biggest hopes for Chinese competitors in the US and elsewhere is a special "safeguard arrangement," which China agreed on during its entry negotiation with the WTO in 2001.

According to the arrangement, a WTO member can carry on limiting Chinese textile imports if they may cause "market disruptions" or threaten to impede "the orderly development of trade."

Gaylon Booker, former president of and now consultant to the National Cotton Council, recalled that in 2001, as part of the gradual lifting of the old system, quotas were removed on 28 categories of textile, eight of which contained cotton.

"In the first 12 months after the lifting of the quotas on those eight categories, there was a 640 percent increase in China's exports to the US and a more than a 70 percent drop in the price of those products," Booker said.

"There is clearly evidence there of market disruption," he said. "The major threat will be China."

Indeed, in the runup to the end of this year, US textile manufacturers have filed a slew of requests for protection from imports of Chinese-made bras, wool trousers, cotton shirts, blouses and dressing gowns they claim would disrupt the market.

China is not alone, however, in protesting such tactics.

US textile importers, too, are seeking to block what they describe as protectionist measures.

Laura Jones, executive director of the US Association of Importers of Textile and Apparel, said the lifting of the quota system "is a very good thing. I worked my whole career for this."

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