Da Asia Times del 07/04/2005
Originale su http://www.atimes.com/atimes/China/GD07Ad09.html

West blocks China's cotton route

BEIJING - Challenges loom over Chinese apparel exports as the United States and the European Union seem to be initiating steps to restrict this trade as demands from domestic producers get shriller. While the US government took the first step on Tuesday toward restricting imports of low-priced pants, shirts and underwear from China in response to pressure from its textile industry, the EU's executive commission is scheduled to present on Wednesday a framework for holding back the flood of Chinese textile imports.

US trade officials said they would "self-initiate" investigations to see whether to curb the runaway imports that have begun to gravely hurt the domestic industry. In a written statement, Commerce Secretary Carlos Gutierrez said the move is the "first step" toward determining whether the US market is indeed being disrupted, and whether the disruption can be attributed to Chinese imports. Gutierrez said the Bush administration "is committed to enforcing trade agreements and to providing assistance to the domestic textile and apparent industry, consistent with our international rights and obligations".

European Commission spokeswoman Francoise Le Bail said EU trade commissioner Peter Mandelson would unveil "the way the safeguard clause could be activated" under WTO rules to protect the European textile industry from Chinese imports, but insiders said import blockades wouldn't be put up right away. European textile association Euratex has been lobbying with Brussels to use the temporary safeguard measures allowed under WTO rules as Chinese imports have surged since the beginning of the year.

The EU had earlier assured China's textile firms that it would not follow Turkey's lead by imposing quotas on Chinese imports. Mandelson's spokeswoman, Claude Veron-Reville, had said such safeguards would only be used as a last resort. China's textile industry grew increasingly concerned that the EU might take such measures in light of the call from Euratex for action against China. There were reports that at a recent closed-door meeting, EU trade officials and politicians discussed whether Turkey's action against China should lead the EU to do likewise. Turkey decided in December to impose quotas on 42 categories of Chinese textile imports, just ahead of the lifting of global quotas.

The US Commerce Department's push to cap Chinese textile imports was met with a sharp rebuke from the Chinese side. "The United States has overprotectionist, irrational and unreasonable arrangements," said Qin Gang, a spokesman for the Chinese Foreign Ministry. "This is unfair," he said, and added that to simply blame exporting countries, especially China, for the problems of the American textile industry is unreasonable. American consumer groups are equally dismayed. They believe new quotas will lead to higher prices, imposing a hidden tax on consumers.

Textile groups and their allies in US Congress have been pressuring the Bush administration to slap emergency curbs on China, which, they say, will overrun the US market following the end of the decades-old quota system on December 31, 2004. The Chinese government agreed when it joined the WTO in 2001 to let the US and other countries impose "safeguard" restrictions on its clothing and textile exports when they surge to "market-disrupting levels". That provision, which expires at the end of 2008, allows countries to limit the growth in imports from China to just 7.5% above the previous year.

Textile quotas had seriously limited the trade. China, always a big exporter of trousers, was severely handicapped by the quota system. The US set China a quota of 5.5 million square meters, compared to 7.82 million for Bangladesh and 10.18 million for Vietnam. When the quota system ended, it was predicted that China would be the principal beneficiary of freer trade. Textile imports from China were expected to surge following the expiration of quotas controlling worldwide trade in textile and apparel products. China itself had warned that a rise was inevitable and even imposed export tariffs in a bid to address international concerns. But the increase in export volumes in the first three months of the year has proved too sharp for the West to ignore.

Compared with the first quarter of 2004, US data for January through March 2005 shows a 1,521% jump in Chinese cotton trouser imports and a 1,258% jump for knit shirts. Overall textile and apparel imports from China in the first three months of the year totaled 2.86 billion square meters, up 62.5% year-on-year. China exported nearly US$1 billion of jeans, sheets, fabric and other textile goods to the US in February alone, compared with $424 million a year ago, according to Columbia's Global Trade Information Services Inc. The 125% increase in February follows a jump of 75% in January.

Predictably, this flood of Chinese cloth is reflected in the job-loss figures. Some 381,300 textile and apparel industry jobs are estimated to have been lost in the US since January 2001, according to the American Manufacturers Trade Action Council, as 17 textile mills closed down in the first quarter itself. Since 1990, more than 1 million US jobs have been lost in the textile and apparel industries, including about 700,000 apparel jobs.

One beneficiary from the latest Western hurdles to Chinese apparel could be India. The US and the EU are India's biggest markets for textile exports, but Chinese competition has severely tied down Indian exports in most product categories ever since the global textile trade was opened up. Though many leading Western labels have been outsourcing from India after the lifting of the quotas, the Indian industry is still struggling to find a foothold in the international market amid the deluge of Chinese products.

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