US Considers Further Chinese Textile Curbs

by Glen Shapiro, LawAndTax-News.com, New York

04 August 2005

Perhaps as a negotiating tactic, the US commerce department announced on Tuesday that it would consider an industry request to extend limits on Chinese sock imports and would also consider imposing caps on women's and girls' woven shirts and blouses, skirts, nightwear and swimwear. But the US delayed a decision on restricting six textile categories already under investigation.

"The US is consulting with various stakeholders in Congress about the possibility of negotiations," said US deputy secretary of state Robert Zoellick at a press conference in Beijing, speaking after a meeting with foreign minister Li Zhaoxing on textiles and broader bilateral trade issues.

"The Chinese government hopes to strike an agreement with the US similar to that with the European Union, whereby the uncertainty of when and what quotas would be imposed on which Chinese textiles would be removed," said Peter Liu Sin-shing, chairman of the textile and apparel committee of the American Chamber of Commerce in Hong Kong.

After emergency talks with the EU agreed limits on textile exports at the end of June, the Chinese Ministry of Commerce announced a provisional licensing system for textile exporters. EU trade commissioner Peter Mandelson and Chinese Commerce Minister Bo Xilai had agreed to limit the increase in Chinese textile exports by staggering their level in each of the next three years before the trade is fully liberalised in 2008.

The Ministry said that the new quota allocation system would determine how much individual textile manufacturers are allowed to sell to countries or regions that impose restrictions on Chinese textile exports or that have placed "temporary quantity restrictions on Chinese-made textile products according to bilateral agreements." The licences applied from 20th July.

This wording covers both the EU and the US, but talks between China and the US have yet to reach agreement. In May, US Commerce Secretary Carlos Gutierrez announced restrictions on the growth of imports of Chinese-made cotton pants, underwear, synthetic fiber shirts and other goods to an annual rate of 7.5%, saying there had been a surge in shipments from China since global quotas were lifted on Jan. 1. According to Commerce Department statistics, imports of Chinese textiles were up 54% in the first quarter on a year earlier.

Following the US' imposition of quotas on Chinese textiles, the Chinese reacted by withdrawing conciliatory export tariffs which were to have been quintupled from June 1. It had been a condition of the export tariff increases that China's major markets would not impose tariff or quota controls. "A previous decision to quintuple the export tariffs on 74 textile categories, on which export tariffs were imposed from January 1 this year, was revoked," the official Xinhua News Agency said, citing the Customs Tariff Commission of China's Cabinet.

Recommended