US caps import of Chinese garments
Toh Han Shih
The United States this week imposed its first 'safeguard quotas' on Chinese garments since global textile quotas expired on January 1.
The quotas cap imports of cotton knit shirts at 4.7 million dozen, cotton trousers at 4.34 million dozen and underwear at 5.06 million dozen pairs, for the remainder of the calendar year.
But the US and the European Union simultaneously renewed calls for negotiations with China in order to seek a 'mutually satisfactory solution' to the textile trade dispute.
The US government would make 'every effort' to reach an accommodation with the central government within 90 days, a US Department of Commerce announcement said.
Dialogue between the parties is mandated under the World Trade Organisation rules that allow the imposition of safeguard quotas on Chinese textiles until the end of 2007 in cases where an import surge disrupts local textile markets.
But Peter Liu Sin-shing, chairman of the textile and apparel committee of the American Chamber of Commerce in Hong Kong, warned that settlement was likely to prove difficult. 'It's no longer just textiles. The whole thing is politics involving the passage of Cafta [Central American Free Trade Agreement] and the revaluation of the Chinese yuan,' he said.
On Monday, the European Commission also called for formal consultations with the central government on the EU's proposed safeguard quotas on Chinese T-shirts and flax yarn. Yesterday, EU Trade Representative Peter Mandelson was scheduled to meet Chinese vice-minister and special textile negotiator Gao Hucheng.
'The EU is more receptive than the US to creating a win-win situation with China, with which it has a good working relationship,' said Willy Lin Sun-mo, vice-chairman of the Hong Kong Textile Council.
'If the EU strikes a deal while the US refuses to compromise on quotas, the US will look bad in the global trading community, but it may not care as the Bush administration is more concerned with domestic politics.'