US-China textile row worsens

The United States has announced that it was re-imposing import quotas on two types of Chinese clothing and textiles, intensifying trade tensions between the two nations.

Cheap Chinese imports are said to be destroying the US industry
Cheap Chinese imports are said to be destroying the US industry

President George Bush’s administration on Thursday said that it would limit imports of fabric made with synthetic filament threads as well as bras, girdles, panty girdles and corsets in response to a surge in shipments that have battered the US industry.

The action was taken hours after US and Chinese negotiators broke off an effort in Beijing to reach a comprehensive agreement covering all categories of US-made clothing and textiles being disrupted by a surge in Chinese imports since global quotas were lifted on 1 January.

The administration announced it was extending until 1 October a deadline for making decisions in four other cases covering sweaters, robes, knit fabric and wool trousers.
The delay is an effort to pressure the Chinese to accept comprehensive limits or risk even more tight growth limits.

US textile and clothing makers, who contend that a flood of Chinese imports has cost 26,000 jobs and forced 19 textile plants to close since the first of the year, praised the administration’s action. They pledged to keep trying to re-impose quotas on several types of clothing and textiles until China agrees to a comprehensive deal.

According to the terms under which China was admitted to the World Trade Organisation, the United States can re-impose quotas known as “safeguards” that limit import growth in covered categories to 7.5% per year.

US industry

“The US textile industry will file as many safeguard cases as it takes to halt these job-killing trade practices,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition.

The administration in May began re-imposing quotas on several types of clothing to cope with a surge in Chinese imports that has pushed America’s trade deficit with China 32% higher through the first six months of this year than during the same period in 2004.

Chinese President Hu Jintao will visit the White House next week  

Chinese President Hu Jintao will
visit the White House next week  

Last year’s deficit hit a record $162 billion, the largest imbalance ever recorded with a single country, and has greatly heightened trade tensions between the two countries.

Chinese President Hu Jintao is scheduled to visit the White House for meetings with Bush next Wednesday.

A number of US lawmakers are sponsoring legislation that would impose across-the-board tariffs of 27.5% on Chinese imports as retaliation for what American manufactures believe is China’s manipulation of its currency to gain advantage over US products.

Worried retailers

American retailers have complained the imposition of quotas will raise clothing prices for US consumers. China has reached its limit in several clothing categories, leaving retailers to scramble for other suppliers.

The US announced the new quotas after unsuccessful negotiations over three days in Beijing aimed at forging a comprehensive agreement to limit imports. US officials said they would schedule a third round of negotiations soon. The Bush administration had hoped an agreement could be reached before Hu’s visit next week.

The Chinese state media has suggested that Beijing’s position might be strengthened by an uproar in Europe over a backlog of Chinese textiles at European ports under a quota system negotiated in June.

In Brussels, European Union Trade Commissioner Peter Mandelson unveiled a plan on Thursday to unblock some 75 million garments held up at EU borders after Chinese textile imports reached the 2005 quota limits.

Source : News Agencies

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