Textile groups file new safeguard petitions
Oct 22, 2004 12:00 PM, By Forrest Laws Farm Press Editorial Staff
A coalition of U.S. apparel, textile and fiber-producing trade groups has begun filing new safeguard petitions to try to head off an “explosion” of Chinese textile imports they say could destroy the U.S. textile and apparel manufacturing sector.
The first petition, which requests that the U.S. Department of Commerce invoke the safeguard provisions of China's WTO accession agreement on imports of men's and boys' and women's and girls' cotton trousers, was filed by representatives of the coalition on Oct. 8.
The coalition filed another set of petitions — involving the categories of men's and boys' and women's and girls' man-made fiber trousers, wool trousers, cotton knit shirts and man-made fiber knit shirts — on Oct. 13. U.S. importer and retailer groups condemned the petitions as “misguided and baseless.”
Leaders of the manufacturers and producers coalition say those petitions and others that will be filed in coming days are aimed at trying to prevent a repeat of what happened in 2002 when quotas expire on all textile and clothing products on Jan. 1, 2005.
“In the apparel and home textile categories released from quota in January 2002, China exploded from less than 10 percent market share in 2001 to more than 70 percent market share as of June 2004,” said Cass Johnson, president of the National Council of Textile Organizations.
“Absent the implementation of safeguards, China will capture similar market share post-2005 and destroy the textile and apparel manufacturing complex, one of the largest employment sectors in the United States.”
The remaining petitions will be filed to try to limit growth in Chinese exports of cotton and man-made fiber underwear, cotton sheets, synthetic filament fabric and cotton yarn to 7.5 percent per year under the safeguard provisions of China's WTO accession agreement.
The WTO agreement, signed by China in 2001, provides safeguards to prevent the disruption of orderly market development by the United States and other countries in connection with the approaching expiration of textile and apparel quotas on Jan. 1.
The Committee on the Implementation of Textile Agreements has 15 days to notify the coalition if it will accept any or all of the petitions, but National Cotton Council leaders said U.S. textile and apparel manufacturers have been assured a fair hearing within the administrative process.
“The categories named in the filed petitions and those expected in the near future are vitally important to maintaining a minimum critical mass for continued textile and apparel manufacturing in the United States,” said NCC Vice President Stephen Felker. “The experience of the U.S. sector since 2002, when selected categories of textile and apparel products had quotas eliminated, demonstrates the tremendous potential for surges in imports from China.”
Chinese imports in some categories soared by 600 percent in the first 12 months after quota elimination with associated price declines of 53 percent, said Felker, a Georgia textile executive. Imports from China in all categories with quota elimination have risen 1009 percent since 2001.
“This surge in Chinese imports directly reduced U.S. production as well as imports from our hemispheric trading partners that often contained U.S.-manufactured components,” he noted.
Importer and retailer representatives accused the U.S. textile industry of taking aim at its customers. “The U.S. textile industry trade associations have attacked the American retailers and importers who are the customers of U.S. mills,” said Laura Jones, executive director of the U.S. Association of Importers of Textiles and Apparel.
“The best way to maintain jobs in the United States is to create partnerships between the mills and their customers — instead of trying to harm our members. They need us to stay healthy if they want to stay in business.”
But National Cotton Council leaders said the situation for domestic and Western Hemisphere textile manufacturers could become even more desperate if no action is taken on the petitions.
The United States currently manufactures about 45 million dozen cotton trousers annually but imports 63 million dozen from NAFTA and the CBI, mostly made with U.S. components, they said. Due to quotas, China exports 2.8 million dozen cotton trousers to the United States. Based on the U.S. experience in 2002, without safeguard action, Chinese imports of cotton trousers will rise to 19.6 million dozen.
“This will come at the direct expense of U.S. manufacturers and hemispheric partners using U.S. components,” said NCC President Mark Lange. “There is no need to wait for economic damage of this magnitude to occur. The agreement permits action based on the threat of market disruption.”
Responding to questions during a media briefing on the petitions, Lange said the cotton industry is not worried about the possibility of Chinese retaliation against U.S. cotton producers because of the NCC stance on the safeguard petitions.
“We are continuing to work with our government to seek to have the Chinese honor all of their agreements with the United States,” he said.
