Threat to China textile quotas

PUBLISHED : Wednesday, 03 November, 1993, 12:00am
UPDATED : Wednesday, 03 November, 1993, 12:00am

CHINA's already tight US clothes and textiles quota allowance will be slashed next year if mainland officials fail to meet stringent demands from America to curb transshipments, says a US Government trade official.

New measures in the on-going US war on transshipment include 30-day embargoes on trade with countries by-routing goods and a trebling of quota charges for repeat offenders.

Speaking at the World Knitting Congress yesterday, deputy assistant secretary for textiles, apparel and consumer goods industries Rita Hayes said the top item on the agenda at next week's meeting with Chinese officials is moves to toughen up on transshipment.

''One of our main objectives is to renew this and 25 other expiring bilaterals with stronger language to combat circumvention, especially through transshipment,'' Ms Hayes said.

''If we cannot reach agreement by the time the bilateral expires, we will have to consider alternatives, which include unilateral restraints.'' She said talks with China to date had not made much progress.

Steps to control imports arriving fraudulently in the US - which is the world's biggest recipient of these goods from overseas - already have been dubbed ''trade terrorism'' by disgruntled traders.

Agreement between the US and China must be finalised by the end of the year, when the existing arrangement expires.

The bilateral deal covers circumvention, quota cutbacks, and US targets on transshipment which China should aim to meet.

Ms Hayes said: ''We are asking China, number one, to sign our transshipment circumvention language, and secondly to look at our quotas.'' Transshipment from China is reckoned to cost the US between US$2 billion and $4 billion a year.

Ms Hayes chairs the recently created Committee for the Implementation of Textile Agreements (CITA), which has developed initiatives to reduce transshipments including the formation of a Transshipment Task Force.

This is co-chaired by Ms Hayes and US Trade Representative (USTR) chief textile negotiator Jennifer Hillman, with participants from the departments of commerce, justice, state, treasury and USTR.

The taskforce already has acted, asking for the co-operation of exporting governments and stiffening penalties for offenders.

Under the new provisions, repeat offenders can now be charged three times the usual cost of quotas for each transshipment found originating within their borders.

A new transshipment policy - covering 66 countries that are neither members of the General Agreement on Tariffs and Trade (GATT) nor the Multifibre Arrangement (MFA) - enables the US to impose an embargo on offending countries.

Ms Hayes said: ''Under this new transshipment policy, when we have reasonable suspicion that goods have been transshipped, our government will ask the government of the alleged country of origin to allow factory inspections.

''Their government will have 15 working days to respond. If that country agrees to inspection, imports from it can continue, and a customs investigative team will go out to inspect its factories.

''If that country refuses inspection, it will be given 10 days notice of the consequences and one more chance to comply.

''If they still refuse inspection, notice of an embargo will be published in the Federal Register, to be effective within 30 days.'' The embargo will be suspended if the country agrees to inspection. The new policy has so far been used against six countries.

''Our aim is to make everyone involved in a transshipment scheme - importers and exporters, the source country and the transit country - all think twice.

''We want them to decide that the risks are too great, and the penalties for violation too severe, to be worth any gain.''