China faces clothing export war with US

PUBLISHED : Friday, 13 June, 2003, 12:00am
UPDATED : Friday, 13 June, 2003, 12:00am

American textile manufacturers petition the Bush administration for quotas

United States textile manufacturers are poised to file a submission to the Commerce Department that could restrict Chinese clothing exports, including those produced by Hong Kong-owned factories on the mainland, within as little as 90 days.

The looming showdown will be the first of its kind under newly minted rules that allow the US government to unilaterally impose quotas or tariffs on Chinese textile exports despite the country's accession to the World Trade Organisation.

'We will [submit the filing] in the next few weeks,' said Cass Johnson, a Washington-based senior vice-president with the American Textile Manufacturers Institute. 'We are taking nothing for granted. This is going to be a full-court press.'

So far this year, the Bush administration has considered - and rejected - similar petitions filed under Section 421 of the US Trade Act by American manufacturers of clothes hangers and 'pedestal actuators', obscure mechanical components that raise or lower seats on wheelchairs.

Both petitions were endorsed by the US International Trade Commission, but subsequently vetoed by the White House. This time, however, the Bush administration will be confronted by the full might of a powerful industry lobby as it gears up for an election year.

The US textile industry's submission will also take a different bureaucratic route from the Section 421 actions. If it is backed by the Commerce Department after a 45-day period for review and public comment, it then goes to an interagency panel comprising representatives from the departments of commerce, labour, state, treasury and the office of the US Trade Representative.

'It's a fast, simple and efficient procedure. From start to finish it's only about 90 days,' Mr Johnson said.

The US industry has cited an alleged 140 per cent surge in mainland textile and apparel exports, 50 plant closures and 40,000 job losses over a 12-month period as justification for protection.

They said the surge was attributable to huge increases in Chinese exports of gloves, bras and 29 other items that were removed from quota controls in January last year. They fear even worse after quotas are lifted on all garment categories in January 2005.

The US textile industry also blames 'Chinese currency manipulation' and 'China's illegally pegged currency' for the sharp increases, alleging that the yuan is about 40 per cent undervalued.

'The closure of United States textile plants reflects their declining competitive power,' said Samuel Choi, director of Hong Kong-based Victory City International Holdings. 'They must accept the fact that they are being phased out from global competition.'

Lai See - B2, Editorial - A12

Material evidence

New rules allow the US to unilaterally impose quotas on Chinese textile exports despite the country's WTO entry

The US textile industry blames 'Chinese currency manipulation' for the sharp rises in exports

The US textile industry suffered 50 plant closures and 40,000 job losses over a 12-month period