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White House re-imposes Chinese textile quotas

The Bush administration announced late Friday that it has decided to re-impose quotas on three types of Chinese clothing.
/ Source: The Associated Press

The Bush administration is re-imposing quotas on three categories of clothing imports from China, responding to complaints from domestic producers that a surge of Chinese imports was threatening thousands of U.S. jobs.

The administration action will impose limits on the amount of cotton trousers, cotton knit shirts and underwear that China can ship to this country. American retailers say that will drive up prices for U.S. consumers.

In announcing the decision Friday, Commerce Secretary Carlos Gutierrez said a government investigation had found that a surge in shipments from China since global quotas were eliminated on Jan. 1 was disrupting the domestic market.

The decision was made by the Committee for the Implementation of Textile Agreements, an interagency group led by the Commerce Department.

“Today’s action by CITA demonstrates this administration’s commitment to leveling the playing field for U.S. industry by enforcing our trade agreements,” Gutierrez said in a statement.

The action will mean that shipments in the three categories will be permitted to increase this year by just 7.5 percent, compared with shipments over a 12-month base period.

U.S. retailers had fought against the re-imposition of quotas on China, arguing that it will mean higher costs for American consumers.

Laura Jones, executive director of the United States Association of Importers of Textiles and Apparel, said the administration was going ahead with the action even though the latest trade data showed that clothing and textile imports from China actually declined in March after surging in January and February. She said the administration chose to ignore all the comments filed by U.S. retailers arguing against the action.

“Clearly, the government did not consider the facts,” she said. “To make a decision affecting billions of dollars in business less than four days after a public comment period closes only shows how little regard there is for our business.”

In its announcement, the administration said four other petitions the industry filed last year seeking re-imposition of quotas in other clothing categories could be acted upon soon because the public comment period has now ended in those cases.

Jones predicted the administration will quickly process all the cases it has pending, including several cases the industry filed last month. She said the domestic industry was “trying to recreate the quota system.”

But domestic textile and clothing makers argued that they faced the prospect of losing thousands of jobs unless something was done to stem the flow of products from China.

“The fast action to re-impose quotas by the Bush administration today has saved thousands of textile jobs in this country and we are extremely grateful,” said Cass Johnson, president of the National Council of Textile Organizations. “The U.S. government has sent a strong message that it understands the real crisis that these enormous surges present to our workers.”

Earlier this week, the council announced its support for the administration’s drive to get Congress to pass the Central American Free Trade Agreement, covering the Dominican Republic and five Central American countries.

Critics of the trade pact have accused the administration of offering to re-impose quotas on Chinese textiles as a way of appeasing lawmakers from textile districts. The administration has said the textile cases would be decided on their merits.

The American Manufacturing Trade Action Coalition, another big textile industry group which refused to back CAFTA, praised the administration’s action in the Chinese cases.

“Unfair trade practices like export tax rebates, non-performing loans, currency manipulation and other subsidies fuel China’s export surge,” said Auggie Tantillo, executive director of AMTAC. “Failure by the U.S. government to discourage these practices would make a mockery of America’s free markets.”

Tantillo said the textile industry would be filing more cases seeking re-imposition of quotas in the near future.

The United States has the power to impose caps of 7.5 percent growth in textile and clothing categories on China under an agreement that cleared the way for China’s membership in the World Trade Organization in 2001.