US President George W. Bush's administration is being temporarily barred from imposing new limits on imported clothing and textile products flowing into the US from China.
The action by a federal court in New York comes as US textile makers brace for an even greater surge of Chinese apparel imports when decades-old, worldwide quotas expired yesterday.
US textile and clothing manufacturers, worried about more competition coming from China, are seeking protection from the administration to limit Chinese imports. Industry officials decried the action, saying it could further hurt beleaguered US factory jobs.
Importers of Chinese goods and the retailers that buy apparel and textiles made in China hailed the judge's decision.
Judge Richard Goldberg of the US Court of International Trade in New York on Thursday issued a preliminary injunction that temporarily bars the administration from considering petitions seeking restrictions on imports of clothing and textiles from China.
The US Association of Importers of Textiles and Apparel, whose members include J.C. Penney, Liz Claiborne and other retailers, sought the injunction. The Bush administration opposed the group's request.
The issue of trade with China has been politically touchy for the administration. Democrats have accused Bush of not doing enough to protect American workers from unfair foreign competition.
The US trade deficit with China clocked a record US$16.8 billion in October as imports flowing from the country posted all-time highs.
The administration has been pressing China to let its currency, the yuan, be set in open markets. US manufacturers claims Beijing's currency policies give Chinese companies a big competitive advantage over US companies.
Petitions seeking limits on Chinese textile and apparel imports are permissible under a special provision of the agreement China signed to gain entry into the World Trade Organization in late 2001. The US can impose temporary restrictions on such imports from China if those products are threatening market disruptions.
The petitions seeking to restrict Chinese imports are reviewed by the Committee for the Implementation of Textile Agreements, or CITA, an interagency group composed of officials of the departments of Commerce, State, Labor, Treasury and the office of US Trade Representative (USTR) Robert Zoellick.
USTR declined to comment on the judge's decision. Messages seeking comment were left for other members of the group which are defendants in the case.
Since October, the interagency group has accepted for consideration 12 requests for safeguards that allege the threat of market disruption by Chinese textile imports, according to court documents. The group hasn't acted on those requests, the court papers said.
The plaintiff in the case, the US Association of Importers of Textiles and Apparel, contended that panel's mere acceptance of these requests have thrown a wrench in some companies' 2005 business plans.
Some canceled orders in China and scrambled to find factories elsewhere, according to court documents.
Goldberg wrote that the plaintiff "raised sufficiently serious and difficult questions" to warrant a preliminary injunction.