The U.S. textile industry said yesterday that it is formally asking the Bush administration to cap China's shipments of trousers, shirts, sheets and other textile items to the United States, warning that an expected flood of Chinese imports next year will otherwise wipe out thousands of American jobs.
The move marks an effort by the U.S. industry and its main union to stave off the impact of a momentous change in international trade rules that is scheduled to take effect on Jan. 1, when a 30-year-old system governing worldwide commerce in textiles and apparel expires. The system sets highly specific limits on the amounts of clothing and fabric that each country can export to the United States and the European Union. Once those limits are lifted, many experts predict that low-cost Chinese manufacturers will grab a major share of the more than $400 billion global textile market from producers in Asia, Latin America and the Caribbean.
The petitions that the U.S. industry is filing this week, if approved by an interagency U.S. government committee, would limit the annual growth of Chinese imports in nine targeted textile and apparel categories to as little as 7.5 percent. Those limits, known as safeguards, apply only to China under the terms of the agreement that gave Beijing membership in the World Trade Organization and could continue until 2008.
The U.S. textile industry has been in decline for decades -- it lost 350,000 jobs in the last three years, and now employs about 700,000 -- but it retains political clout. The petitions come amid a presidential election in which the loss of manufacturing jobs is a major issue. In a move that could put the White House on the spot, the industry filed an initial petition, on cotton trousers, late Friday so that the administration committee would have to decide by Nov. 1 -- the day before the election -- whether there is enough evidence against the Chinese to proceed to a final decision. A final ruling would not be issued until January.
Unless Washington implements the safeguards, China will "destroy the textile and apparel manufacturing complex, one of the largest employment sectors in the United States," said Cass Johnson, president of the National Council of Textile Organizations, adding that the move is backed by textile and apparel associations in 51 countries that are also afraid of unbridled Chinese competition.
The five industry groups backing the petitions were joined by Unite Here, the union representing many textile and apparel workers. Edgar Romney, the union's executive vice president, said that "without decisive action by the U.S. government" the jobs lost in the past three years "will pale in comparison to the jobs that will be lost in 2005 and beyond."
Critics derided the petitions as a desperate ploy by a dying industry. "China is clearly not the problem for the U.S. textile industry. The problem is the industry itself," said Laura E. Jones, executive director of the U.S. Association of Importers of Textiles and Apparel, in a statement.
Imposing safeguard limits "would continue the failed protectionist policies of the past 40 years while doing nothing to create or preserve U.S. jobs," agreed Erik Autor, international trade counsel of the National Retail Federation. "If U.S. retailers can't get sufficient supplies of merchandise from China, they'll simply turn to other foreign manufacturers, not U.S. manufacturers . . . and the American consumer would be left paying artificially high prices at a time when prices should be dropping because of the end of the quota system."
U.S. textile industry representatives insisted, however, that China poses a particularly grave threat to them. That is partly because of China's fixed currency and other practices that, according to the U.S. industry, enable Chinese producers to slash prices to rock-bottom levels. In addition, many U.S. firms have established outposts in Central America and the Caribbean that sew garments using fabric made in the United States. If those operations are drastically undercut by the Chinese, U.S.-based fabric makers will be in trouble.
In addition to the petition on cotton trousers filed Friday, industry officials said they would file four petitions today, covering trousers made with synthetic fibers, cotton knit shirts, synthetic knit shirts and non-knit shirts. During the remainder of this week, they said, they will also file petitions covering wool trousers, cotton sheets, cotton yarn and synthetic filament fabric.
Altogether, these categories account for $1.3 billion, or about 14 percent, of China's textile and apparel shipments to the United States. The industry said it also intends to ask for the renewal of safeguard measures in three categories -- bras, dressing gowns and knit fabric -- that were imposed late last year. In those categories, quotas were previously lifted.
Industry officials voiced confidence that their petitions would be accepted. But they acknowledged they are basing their petitions on the "threat" that Chinese imports will "disrupt" the U.S. market, rather than on evidence that it is already happening. They said the threat is obvious because in categories where quotas were previously lifted, Chinese imports surged; moreover, China has dominated the textile and apparel market in countries such as Japan and Australia where no quotas exist.
A Commerce Department spokeswoman, Mary Brown Brewer, said industry groups "are well within their rights to file petitions based on market disruption or threat of market disruption."
But the industry has to provide "more than anecdotal evidence" to support its petitions, said a department official who declined to be identified because of the sensitivity of the issue. "There's got to be clear, hard evidence" that Chinese imports pose a threat in specific categories, such as data showing significant Chinese investment in those categories.