Towel makers to request 'safeguard' import curb on China

Asian Economic News, Feb 12, 2001

TOKYO, Feb. 7 Kyodo

Domestic towel makers will ask the government in the near future to impose an emergency curb on towel imports from China, officials at the Japan Towel Industrial Association said Wednesday.

Alarmed by surging imports as well as encouraged by the government's recent move to relax some of its strict requirements, the industry group will file the request possibly within this month, the officials said.

If taken, it will be the first ''safeguard'' restriction Japan has invoked. Countries are permitted under World Trade Organization (WTO) rules to impose such an import curb when domestic industries are endangered.

When requested, the economy, trade and industry minister will make a decision within about six months after launching an investigation into the issue.

The nationwide association of towel makers will formalize its plan to seek the curb at a regular general meeting Feb. 16 in Osaka, the officials said.

Import of towels and blankets made of toweling expanded 16.6% in the January-November period of last year over the same period the year before to 59,000 tons, of which 80% came from China, according to latest statistics.

The growth in imports boosted the share of such items on the domestic towel market to more than 60%, and has caused small and midsize makers to go belly up, the officials said.

The number of domestic towel makers has dwindled by two-thirds during the last two decades, they said.

In view of the plight of domestic textile makers, the Ministry of Economy, Trade and Industry (METI) relaxed at the end of last year its prerequisites for invoking a textile import curb to match the international standard.

Other Japanese textile makers also are considering lodging similar requests with the government over a number of knitted and woven garments, industry officials say.

However, their preparatory work has been slow due partly to conflicting interests among themselves, with many makers having already shifted production sites to China, they said.

Particularly outspoken in opposing the move is Fast Retailing Co., which, contracting to make 90% of its UNIQLO-brand apparel in China and offering it at low prices, is a rare domestic company enjoying a rapid sales expansion during the lethargic economy.

A safeguard action on textiles, on which countries had agreed to make prerequisites more lenient than for other products, allows a government to impose import quotas for up to three years to limit growth in imports of certain products.