The Bush administration, sending another signal that it intends to limit imports of clothing from China next year, announced yesterday that it will consider a request by the U.S. textile industry to maintain caps on shipments of Chinese-made cotton trousers to the United States.
The administration has taken a series of steps suggesting that it plans to blunt the impact of a major shift toward free trade in the global textile and apparel industry. On Jan. 1, a system of quotas that has governed the industry for three decades is to expire, which will allow developing countries to export as much as they like to the U.S. and European markets. Many experts expect that the end of quotas will enable Chinese producers to capture a vast swath of the global market because of their low cost and efficiency.
U.S. textile makers contend that their industry, which has already lost hundreds of thousands of jobs in recent years, stands to lose more to China. They are asking the administration to effectively extend the quotas for a while longer -- at least as they apply to goods from China. Washington is permitted to impose further limits on Chinese clothing imports until 2008 under a "safeguard" procedure that was established when China entered the World Trade Organization. Under the safeguards, the growth in Chinese imports can be capped at 7.5 percent per year.
Yesterday's action was just a procedural step, in which an interagency committee accepted for consideration a petition filed by the industry seeking to impose safeguard limits on cotton trousers. But it was important because the petition was based on the "threat" that Chinese trousers would "disrupt" the U.S. market once quotas are lifted, rather than on evidence that market disruption was actually happening. Retailers and wholesalers that import Chinese clothing have objected that safeguards should be considered only after it is clear that the market is being disrupted.
The interagency group, the Committee for the Implementation of Textile Agreements (CITA), agreed last week to impose safeguards on imports of Chinese socks, based partly on the "threat" and partly on evidence that disruption was already occurring. The textile industry has also filed petitions for "threat-based" limits on Chinese shirts, sheets and other textile items.
CITA Chairman, James C. Leonard III, deputy assistant secretary of commerce for textiles, apparel and consumer goods, said in a prepared statement that the committee "has determined that the request [concerning trousers] contains the information . . . warranting consideration."
That drew a frustrated retort from Erik O. Autor, vice president and international trade counsel for the National Retail Federation. "Based upon the record so far, I would be surprised to see CITA reject any of these petitions," he said.
Accusing CITA of "operating in a black box," Autor said neither the evidence cited in the petition nor detailed grounds for CITA's decision were being made public. "I don't know what CITA determines to be a sufficient petition or an insufficient petition," he said. "I don't think this sends a good message about how this whole procedure operates."