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China slams US plan to put new limits on textiles

This file photo dated March 30 last year, shows a Chinese worker going about her duties at a factory manufacturing textiles for export, mainly to the US, in Haikou, on the southern Chinese island of Hainan. PHOTO: AFP

Trade tensions between the US and China escalated when the Bush administration said it will set new limits on the amount of clothing that China can ship to America.

Wednesday's announcement was the second time in five days that Washington imposed such quotas, acting on complaints that a surge of Chinese apparel was hurting US companies.

The new batch of Chinese goods facing restrictions are men's and boy's cotton and man-made fiber shirts; man-made fiber trousers; man-made fiber knit shirts and blouses; and combed cotton yarn.

A textile industry representative said the categories of trousers as well as shirts and blouses would affect men's and women's products.

American retailers are concerned the quotas will raise prices of these goods for US consumers.

The government committee, led by the Commerce Department, that made the decision found that those categories of imports threatened to disrupt the US market. Shipments of Chinese textiles and apparel to the US have surged since the end of global quotas Jan. 1.

Just on Friday, the administration said it was re-imposing quotas on three categories of clothing imports from China -- cotton trousers, cotton knit shirts and underwear.

Commerce Secretary Carlos Gutierrez said Wednesday's decision "demonstrates the administration's continued commitment to America's textile manufacturers and their employees."

The US, he said, "will enforce our trade agreements to ensure that US companies get a fair deal as they compete in the global marketplace."

The step will mean that shipments of the categories of clothing cited Wednesday will be permitted to increase this year by just 7.5 percent compared with shipments over a 12-month base period.

The US has the power to set the limits on Chinese goods under an agreement that cleared the way for Beijing's membership in the WTO in 2001.

China appealed to the US on Thursday to settle a dispute over surging Chinese textile imports through dialogue instead of unilaterally imposed quotas.

"No side should take unilateral actions," said Kong Quan (孔泉), spokesman for the Chinese Foreign Ministry. "We hope the US side could solve relevant problems through dialogue and in a constructive manner."

The commerce minister for China, Bo Xilai (薄熙來), criticized the US and the EU for blaming China for the fast growth of Chinese textiles in their markets and for taking measures to curb the influx.

"This is unfair," Bo told an audience of international business people at the Fortune Global Forum in Beijing.

Bo said Europe and the US dragged their feet on lifting their quotas in stages so their markets became flooded when the global quotas expired. That's the reason China's exports have grown so dramatically in the first quarter of the year, he said.

"Once an agreement is reached, everybody has to abide by their commitment. Otherwise, there is no point in negotiating rules," Bo said.

The American Manufacturing Trade Action Coalition, a textile industry group, praised the move.

"Failure to act would have cost tens of thousands of US jobs," said the group's executive director, Auggie Tantillo.

But Laura Jones, executive director of the US Association of Importers of Textiles and Apparel, was critical.

"These restrictions on imports from China will do absolutely nothing to help the US textile industry -- and the government knows it," said Jones, whose group includes large retailers.

Target Corp said it could shift the source of its imports, depending on changes in quotas.

"China is very important to us, but it still represents less than half of our direct imports," the company's president, Gregg Steinhafel said Wednesday at Target's annual meeting, before the new limits were announced.

Tim Lyons, a spokesman at J.C. Penney Co, said "It was expected that a safeguard would be imposed at some point. We are adequately prepared."

US-China trade is a politically sensitive issue for the administration. America's trade deficit with China set a record last year, US$162 billion. That was the largest imbalance ever with a single country.
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