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West blocks China's cotton
route
BEIJING - Challenges
loom over Chinese apparel exports as the United
States and the European Union seem to be
initiating steps to restrict this trade as demands
from domestic producers get shriller. While the US
government took the first step on Tuesday toward
restricting imports of low-priced pants, shirts
and underwear from China in response to pressure
from its textile industry, the EU's executive
commission is scheduled to present on Wednesday a
framework for holding back the flood of Chinese
textile imports.
US trade officials said
they would "self-initiate" investigations to see
whether to curb the runaway imports that have
begun to gravely hurt the domestic industry. In a
written statement, Commerce Secretary Carlos
Gutierrez said the move is the "first step" toward
determining whether the US market is indeed being
disrupted, and whether the disruption can be
attributed to Chinese imports. Gutierrez said the
Bush administration "is committed to enforcing
trade agreements and to providing assistance to
the domestic textile and apparent industry,
consistent with our international rights and
obligations".
European Commission
spokeswoman Francoise Le Bail said EU trade
commissioner Peter Mandelson would unveil "the way
the safeguard clause could be activated" under WTO
rules to protect the European textile industry
from Chinese imports, but insiders said import
blockades wouldn't be put up right away. European
textile association Euratex has been lobbying with
Brussels to use the temporary safeguard measures
allowed under WTO rules as Chinese imports have
surged since the beginning of the year.
The EU had earlier assured China's textile
firms that it would not follow Turkey's lead by
imposing quotas on Chinese imports. Mandelson's
spokeswoman, Claude Veron-Reville, had said such
safeguards would only be used as a last resort.
China's textile industry grew increasingly
concerned that the EU might take such measures in
light of the call from Euratex for action against
China. There were reports that at a recent
closed-door meeting, EU trade officials and
politicians discussed whether Turkey's action
against China should lead the EU to do likewise.
Turkey decided in December to impose quotas on 42
categories of Chinese textile imports, just ahead
of the lifting of global quotas.
The US
Commerce Department's push to cap Chinese textile
imports was met with a sharp rebuke from the
Chinese side. "The United States has
overprotectionist, irrational and unreasonable
arrangements," said Qin Gang, a spokesman for the
Chinese Foreign Ministry. "This is unfair," he
said, and added that to simply blame exporting
countries, especially China, for the problems of
the American textile industry is unreasonable.
American consumer groups are equally dismayed.
They believe new quotas will lead to higher
prices, imposing a hidden tax on consumers.
Textile groups and their allies in US
Congress have been pressuring the Bush
administration to slap emergency curbs on China,
which, they say, will overrun the US market
following the end of the decades-old quota system
on December 31, 2004. The Chinese government
agreed when it joined the WTO in 2001 to let the
US and other countries impose "safeguard"
restrictions on its clothing and textile exports
when they surge to "market-disrupting levels".
That provision, which expires at the end of 2008,
allows countries to limit the growth in imports
from China to just 7.5% above the previous year.
Textile quotas had seriously limited the
trade. China, always a big exporter of trousers,
was severely handicapped by the quota system. The
US set China a quota of 5.5 million square meters,
compared to 7.82 million for Bangladesh and 10.18
million for Vietnam. When the quota system ended,
it was predicted that China would be the principal
beneficiary of freer trade. Textile imports from
China were expected to surge following the
expiration of quotas controlling worldwide trade
in textile and apparel products. China itself had
warned that a rise was inevitable and even imposed
export tariffs in a bid to address international
concerns. But the increase in export volumes in
the first three months of the year has proved too
sharp for the West to ignore.
Compared
with the first quarter of 2004, US data for
January through March 2005 shows a 1,521% jump in
Chinese cotton trouser imports and a 1,258% jump
for knit shirts. Overall textile and apparel
imports from China in the first three months of
the year totaled 2.86 billion square meters, up
62.5% year-on-year. China exported nearly US$1
billion of jeans, sheets, fabric and other textile
goods to the US in February alone, compared with
$424 million a year ago, according to Columbia's
Global Trade Information Services Inc. The 125%
increase in February follows a jump of 75% in
January.
Predictably, this flood of
Chinese cloth is reflected in the job-loss
figures. Some 381,300 textile and apparel industry
jobs are estimated to have been lost in the US
since January 2001, according to the American
Manufacturers Trade Action Council, as 17 textile
mills closed down in the first quarter itself.
Since 1990, more than 1 million US jobs have been
lost in the textile and apparel industries,
including about 700,000 apparel jobs.
One
beneficiary from the latest Western hurdles to
Chinese apparel could be India. The US and the EU
are India's biggest markets for textile exports,
but Chinese competition has severely tied down
Indian exports in most product categories ever
since the global textile trade was opened up.
Though many leading Western labels have been
outsourcing from India after the lifting of the
quotas, the Indian industry is still struggling to
find a foothold in the international market amid
the deluge of Chinese products.
(Asia
Pulse/XIC/PTI) |
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