U.S. manufacturers mull measures to curb China textile imports

Asian Economic News, Jan 18, 2005

HONG KONG, Jan. 10 Kyodo

Manufacturers in the United States may file for fresh safeguard measures to curb an influx of textile and apparel imports from China following the end of quotas Jan. 1 this year, a senior U.S. Commerce Department official visiting Hong Kong said Monday.

''Nothing would bar U.S. industry from filing (for) another safeguard mechanism,'' Undersecretary of Commerce for International Trade Grant Aldonas told a press conference arranged by the U.S. Consulate in Hong Kong.

''The industry will make its own judgment. It can file on the same category,'' he said, referring to the recent ruling by a New York court blocking the United States from imposing new curbs on imports from China. The administration of U.S. President George W. Bush has indicated it will appeal the decision.

Aldonas also took issue with local preferential treatment in China and other developing countries, saying, ''There are a number of factors that reduce the costs...that are unfair.''

The U.S. textile industry has maintained that China has policies and practices that distort trade and investment in the textile sector, including high tariffs, improper customs valuation practices, arbitrary import taxes, nontransparent import licensing, subsidies provided to state-owned enterprises, value-added tax rebates, and currency undervaluation.

Intellectual property rights violations, including textile design ''knock-offs'' and trademark piracy, have also been a serious problem in China.

Under the World Trade Organization, the Multi-Fiber Arrangement, a four-decade-old agreement that allowed the WTO to impose quotas on the import of textile and apparel products expired Jan. 1, sparking fears of a flood of cheap imports from developing countries, especially China.

Currently, China makes around 17 percent of clothes worn around the world. But the WTO expects it to grow to 50 percent in 2008.

To avert trade wars with the United States and Europe, China has voluntarily placed a tax of 2-6 percent on its low-cost textile exports. But industry representatives in the West have said the measure will not help much.

As a condition for China's accession to the WTO, the United States can impose ''safeguard'' restrictions on textile and clothing imports from China until 2008.