The Bush administration, in a further escalation of trade tensions between the United States and China, announced Tuesday it had decided to impose quotas on three types of textile products in an effort to give the U.S. textile industry temporary breathing room from a flood of Chinese imports.
The decision will affect Chinese imports of knit fabric, dressing gowns and robes and bras.
U.S. textile makers hailed the announcement as a major victory to protect their beleaguered industry while critics warned that the decision would hurt American consumers by raising prices.
Cass Johnson, interim president of the American Textile Manufacturers Institute, praised the administration for granting import relief for all three products categories the industry had asked to be covered.
“Clearly, the enormous surges we have seen in Chinese imports in these categories and the damage they have caused to our industry, workers and communities warranted such action,” Johnson said in a statement. “We also want to thank our many friends in Congress who worked so hard to convince the administration to take this action.”
The administration came under heavy pressure from lawmakers representing textile states in the South. The administration will need votes from Republican House members from this region in order to pass upcoming free trade agreements it is negotiating with various nations.
Laura E. Jones, executive director of the U.S. Association of Importers of Textiles and Apparel, called the administration’s action “pure politics.”
“Not a single job is going to come back to the United States because of this decision,” she said in a statement. “Slapping the quota on China will merely shift the trade to other countries, mostly in Asia.”
Erik Autor, trade counsel for the National Retail Federation, said that the administration’s decision “will create shortages that could lead to dramatic increases in prices for American consumers while doing nothing to protect American jobs.”
In announcing the action, Commerce Secretary Don Evans said that it “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,” Evans said in a statement.
The U.S. industry, complaining it was being harmed by a flood of textile products from China, had petitioned the government in July for import relief through the imposition of quotas.
The industry petitions were filed under a special provision of the agreement China signed to gain entry into the World Trade Organization. This provision allows the United States and other WTO members to impose temporary quotas on textile imports from China in the event that those products are causing market disruptions.
The industry successfully won the re-imposition of quotas in three product areas where quotas had been removed in January 2002 as part of a decade-long phaseout of textile quotas worldwide under the Multifiber Agreement.
Consumer groups argued that the administration action sets a bad precedent for the future and will encourage the U.S. industry to petition for the re-imposition of other quotas that are scheduled to be removed on Jan. 1, 2005.
As part of the negotiations that covered China’s entry into the WTO, the United States secured provisions that allow it to re-impose quotas on China at least through 2008 to deal with surges in textile shipments to the United States that are found to be “a significant cause of material injury, or threat of material injury to the domestic industry.”