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http://www.washingtonpost.com/...Dec12?language=printer
U.S. Imposes New Curbs on Clothing Imports
Barriers Are Intended to Curtail Chinese Shipments; Plan Roils Textile Industry
By Paul Blustein
Washington Post Staff Writer
Monday, December 13, 2004; Page A15
Eighteen days before the end of a 30 year-old system restricting international trade in textiles and apparel, the Bush administration is imposing new barriers on imported clothing that is likely to curtail an expected flood of Chinese imports in the first few months of next year.
The administration's measures include an embargo that will be imposed throughout the month of January on some of the clothing shipped to the United States during the final months of 2004.
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The new rules, scheduled to be published today in the Federal Register, were posted in recent days on a government Web site. Word of their impending imposition has stirred anger among clothing retailers and importers, who contend that the barriers contravene an international agreement to open the worldwide textile trade starting in 2005. Administration officials counter that the measures are justified because the amount of clothing shipped from some foreign countries in 2004 exceeded legal limits.
The dispute is emblematic of the pitched political battles that many experts predict will continue well past Jan. 1, when the global textile trade is supposed to become much more free and similar in nature to markets such as automobiles and consumer electronics where supply-and-demand forces prevail.
On that date, the quota system that has governed the textile trade since the mid-1970s will expire, eliminating rules that capped the amount of trousers, shirts, sweaters, towels and other such items that each developing country was allowed to ship to the United States, Europe and Canada. That system was aimed at protecting the domestic textile industries of the rich nations, and once it ends, allowing countries to ship as much as they can sell, China is widely forecast to garner the lion's share of the world market because of its low costs, enormous labor supply and competitiveness.
The U.S. textile industry is determined to continue fending off the Chinese export juggernaut, however. It has filed petitions with the U.S. government seeking the imposition of "safeguards" -- caps on imports that the United States and other governments may put on Chinese textile or apparel items if those items are flooding their markets. Beijing agreed to allow such safeguards until 2008 under the terms of its entry into the World Trade Organization.
The barriers on imports to be unveiled today are different from the safeguards, which are still under consideration. Since shipments of certain types of clothing during 2004 apparently exceeded quota ceilings, an inter-agency panel, the Committee for the Implementation of Textile Agreements, is imposing restrictions on the overshipped goods.
For such goods, "entry [into the U.S. market] will not be permitted until February 1, 2005," the new rules state. And after that point, Washington will allow the goods to trickle into the U.S. market based on a "staged" system, whereby the amount allowed each month into the market will be five percent of the 2004 quota ceiling.
For example, if the government determines that more Chinese-made blue jeans were shipped to the United States in 2004 than the quota system allowed, the overshipped Chinese blue jeans will be covered by the new barriers.
The rules don't specify which countries or which types of clothing are affected, but industry sources expect most of the impact to fall on Chinese imports, the greatest area of concern. The rules include special restrictions on three categories of Chinese imports -- bras, dressing gowns and knit fabrics -- that were already subject to safeguard limits.
The action "could have very serious and negative consequences for importers," the U.S. Association of Importers of Textiles and Apparel said in a Dec. 9 memo to its members. IDS Insider, an information service for importers, told subscribers that that the administration "is clearly making every effort possible to appease the U.S. textile industry on the eve of the expiration of the . . . quota system."
By doing a favor for U.S. textile producers, the administration may secure their cooperation on other trade issues, industry sources said. Some sources interpreted the administration's action as going further, effectively accomplishing the same goal as safeguards by restricting imports shipped during 2005. But Mary Brown Brewer, a Commerce Department spokeswoman, said after conferring with a department attorney that the action "has no applicability to any goods shipped after December 31, 2004. It is only applicable to goods shipped before January 1."
Advocates for the U.S. industry argued that American importers and retailers and Chinese producers are getting what they deserve for having allowed clothing to be shipped in excess of the quota limits in 2004.
"This type of cheating and manipulation has been going on for years, and the system has never properly deterred it," said Auggie Tantillo, Washington coordinator for the American Manufacturing Trade Action Coalition. "So from our perspective, this [the imposition of the new barriers] is exactly what should happen, if not worse."
Officials at the Chinese Embassy did not return phone calls seeking a comment.
