That search is likely to become even more frustrating in the years ahead unless the Bush administration decides to get serious about enforcing the provisions of the agreement admitting China’s to the World Trade Organization, officials with the American Textile Manufacturers Institute say.
A 22 page analysis of Chinese textile and apparel import growth during the last fifteen months released by the ATMI this week concludes that China stands poised to take over two-thirds or more of U.S. textile and apparel market once more quotas are removed on Jan. 1, 2005.
The report, titled “The China Threat to World Textile and Apparel Trade,” concludes that if China follows a similar pattern when quotas are removed, it will quickly take control of between 65 to 75 percent of the U.S. market.
The result, according to the American Textile Manufacturers Institute, will be the collapse of the U.S. textile and apparel industry, one of the largest manufacturing employers in the United States, with the resultant loss of 630,000 U.S. textile, apparel and related jobs and the closure of over 1,300 U.S. textile plants.
The initial impact will actually be felt in 2004 as U.S. textile mills begin to lose billions of dollars in orders for yarns and fabrics as a result of customers shifting orders to Chinese suppliers.
These conclusions are based on a detailed analysis of 29 apparel categories, which had quotas on Chinese products removed on Jan. 1, 2002. In the fifteen months since the quota removal, Chinese market share in these categories has increased from 9 percent to 45 percent and, at current rates of growth, is projected to reach 65 percent by the end of this year.
The analysis also reveals that the impact on the entire developing world will be dramatic. With the Chinese quota removal, $42 billion in export trade is expected to shift to China from Mexico, Central America and Sub-Saharan Africa and other nations in as little as two years time.
This will result in the loss of millions of jobs in those countries. The study also reveals that, based on 2002-03 trade data, countries with trade preference programs or free trade agreements are expected to fare no better than the rest of the world.
The Chinese surge has been fueled by unprecedented price cuts, averaging 46 percent and dramatically undercutting U.S. and other suppliers. Imports from China in the de-controlled categories in 2002 increased by $980 million while imports from the rest of the world fell $813 million.
“The report concludes that the United States government and the world community must act quickly through use of the China textile safeguard and a new WTO initiative to restrain Chinese trade before millions of jobs around the world are lost,” an ATMI official said.
A copy of the full report can be found at www.atmi.org.