China and Vietnam Imports Continue Massive Surge

China and Vietnam muscled out foreign competitors in the first quarter and fueled the overall growth in apparel and textile imports.

WASHINGTON — China and Vietnam muscled out foreign competitors in the first quarter and fueled the overall growth in apparel and textile imports.

This story first appeared in the May 14, 2003 issue of WWD.  Subscribe Today.

In the quarter ended March 31, imports of all textiles and apparel rose 18.6 percent to 9.83 billion square meters equivalents against the same period in 2002, according to the Commerce Department’s report released Tuesday.

Apparel imports rose 20.8 percent in the same period to 4.55 billion SME, while textile imports rose 17.3 percent to 5.28 billion SME.

“The essence of the first quarter’s jump is the continuing flood of imports of Chinese textiles and apparel that are no longer subject to quotas,” said Donald Foote, director of the agreements division at Commerce’s Office of Textiles & Apparel.

For months, China and Vietnam have led the pack in accelerating the growth in imports, although Vietnam is a much smaller supplier than China. The two neighboring countries figured prominently in the overall import growth.

The textile industry is concerned about China’s growing dominance and two trade groups renewed the call Tuesday for reimposing quotas on several apparel categories.

“We are having a massive import surge,” said Augustine Tantillo, Washington coordinator for American Manufacturers’ Trade Action Coalition. “The U.S. government has the ability to do something about the major component, which is China, but they are sitting on their hands.”

Eight months ago, the American Textile Manufacturers Institute asked the Bush administration to reimpose quotas on five apparel and textile import categories from China that had been lifted as part of the gradual phaseout of World Trade Organization-member quotas by 2005.

In response, Grant Aldonas, undersecretary for international trade at Commerce, told mill executives at the ATMI’s annual meeting on April 3 that the administration would shortly issue guidelines for how to file a request under a safeguard provision negotiated in 1997 as part of China’s accession to the World Trade Organization.

That was one month ago and those guidelines still have not been issued.

“The safeguard mechanism was developed several years ago and there should have already been a process in place,” said Parks Shackelford, president at ATMI. “Right now we are waiting for just the process, not even a decision on our request.”

Jim Leonard, deputy assistant secretary of textiles, apparel and consumer goods industries at Commerce, said the draft of the China safeguard procedures is being reviewed.

“Even though this is a [Committee for the Implementation of Textile Agreements] process, other people are asking questions and we are answering them because this is China and China is very important,” Leonard said. “We have briefed both administration people and interested parties on the Hill about the draft of the procedures and we continue to answer questions about it.”

Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel, said the safeguard mechanism should be reviewed on a case-by-case basis.

“We continue to see categories of trade going to China from other Asian suppliers and not necessarily from U.S. producers,” said Hughes. “There has to be an explanation of how Chinese shipments are harming domestic manufacturers.”

The import surges prompted U.S. officials to take action against Vietnam late last month with a quota-setting bilateral textile agreement. The agreement, which went into effect May 1, imposes quotas on 38 apparel and textile categories and limits the value of Vietnamese apparel imports to about $1.7 billion in the first 12 months.

Meanwhile, apparel and textile imports from Vietnam and China continued to soar in March and in the first quarter.

Imports from China swelled 125.1 percent in the first quarter to 1.6 billion SME, while imports from Vietnam rose 877.9 percent to 196 million SME in the first quarter.

For March, imports from China rose 110.8 percent, while imports from Vietnam rose 565 percent compared with March 2002. Overall apparel and textile imports in March rose 17.4 percent to 3.2 billion SME.

In textiles, China dominated first-quarter trade with man-made fiber furnishings such as blankets, quilts comforters, curtains, drapes, luggage, handbags and tents, according to Foote.

China and Vietnam also saw big gains in apparel import growth. with China accounting for 31 percent of the first-quarter increase and Vietnam making up 21 percent. Seven other countries together took up an additional 28 percent of the first-quarter growth: Honduras, Cambodia, Indonesia, India, Pakistan, the Philippines and El Salvador.

Of note, some other foreign suppliers held their own against the two Communist countries in the apparel and textile trade. Imports from Honduras rose 21.9 percent in the quarter, while imports from India grew 20.8 percent and imports from Canada rose 6.8 percent. Imports from the entire 24-country Caribbean Basin rose 14.1 percent.

Other countries lost market share in the first quarter. Mexico, the number two overall supplier to the U.S., saw a drop of 7.8 percent in imports of apparel and textiles in the quarter and imports from Thailand fell 10.9 percent.