China responds to US plan for import quotas

Tuesday, April 5, 2005

China is questioning a decision by the U.S. Commerce Department that seeks to re-impose trade quotas on Chinese textiles. The three-decade long system of quotas was lifted on January 1.

"This is not reasonable," Foreign Ministry spokesman Qin Gang told reporters. "This is unfair. This is protectionist."

The U.S. administration justified their decision by presenting data which showed increases of over one thousand percent for cotton knit shirts and cotton trousers. The administration also cited a 300 percent increase of imports of underwear.

Qin disputed the U.S. reasoning for the decision.

"The major reason for this issue is that the United States has over-protectionist, irrational and unreasonable arrangements," he said.

"Other countries that are more competitive will still take over from China, and the US can't impose safeguards on those countries," Peter Liu, chairman of the textiles and apparel committee at the American Chamber of Commerce, told the Financial Times in Hong Kong. "Obviously, the US textile industry has concerns about job elimination, but on the other hand there are a lot of US industries that like to do business with China by exporting to China. If this escalates into a trade war, that's to nobody's benefit," he said.

The U.S. Association of Importers of Textiles and Apparel (AITA) also supports China's product imports.

"There is no reason to believe that imports of these products from China are causing market disruption," AITA spokeswoman Laura E. Jones said.

The U.S. administration cited a need to avoid "market disruption."

"Free trade must be fair trade, and we will work to ensure that American manufacturers and workers compete on a level playing field," read a statement issued by U.S. Commerce department spokeman Carlos M. Gutierrez. "The decision is the first step in a process to determine whether the U.S. market for these products is being disrupted and whether China is playing a role in that disruption." The statement also said the administration was "providing assistance to our domestic textile and apparel industry consistent with our international rights and obligations."

"We are very pleased that the government is taking this action," Lloyd Wood, a spokesman for the American Manufacturing Trade Coalition told The New York Times. "It sends a strong message to China that predatory trade practices will be investigated."

The U.S. Committee for the Implementation of Textile Agreements issued its decision on Monday, under the rules of the World Trade Organization (WTO). China joined the WTO in 2001.

Shirts, trousers, and underwear are one of the few remaining types of clothing manufactured in the United States. The United States is running an all-time high trade deficit with China of US$162 billion.

Sources

Associated Press. "China Criticizes U.S. Over Textile Makers" — Forbes, April 5, 2005
Alexandra Harney in Hong Kong. "HK clothing makers dismayed with US probe" — Financial Times, April 5, 2005
Paul Blustein. "U.S. Opens Challenge to Chinese Textiles" — Washington Post, April 5, 2005
Edmund L. Andrews and Elizabeth Becker. "U.S. Begins Steps to Limit Import Surge From China" — The New York Times, April 5, 2005
Martin Crutsinger, AP. "Textile imports face U.S. inquiry" — The Seattle Times, April 5, 2005

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