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Caucus Pushes for China Monitoring

The House Textile Caucus is mobilizing an effort to convince President Bush to start monitoring apparel imports from China for the rest of this year.

WASHINGTON — The House Textile Caucus is mobilizing an effort to convince President Bush to start monitoring apparel imports from China for the rest of this year.

The caucus, comprising 80 textile state lawmakers, has sent a letter, a copy of which was obtained by WWD, to members seeking their support to pressure Bush to commit to scrutinizing Chinese imports. China is the world’s biggest apparel manufacturing country and the largest source of apparel for the U.S., exporting $32.1 billion worth of apparel and textiles to America in the year ended May 31.

U.S. textile producers and their backers in Congress hope a monitoring program will act as a deterrent to unfair trading by China, which is scheduled to become unencumbered on Dec. 31 when a three-year bilateral quota agreement, which limited 34 categories of apparel and textile imports, will expire. A China monitoring program would create more uncertainty for retailers and apparel importers, and is sure to spark strong opposition. Importers are gearing to block any legislative or administrative attempts to restrain or monitor imports from China or Vietnam.

Reps. John Spratt (D., S.C.) and Howard Coble (R., N.C.), co-chairs of the caucus, said in the letter to members that they will urge the president to add China to an existing Vietnam monitoring program that evaluates whether goods are being sold in the U.S. below market value or the cost of manufacturing, known as dumping.

“By extending the [Vietnam textile monitoring program], the U.S. government can effectively track China’s import and pricing practices and be ready to react quickly if China once again threatens our domestic workforce, as well as those in many vulnerable and developing countries,” the Coble and Spratt letter stated.

The congressmen said China already has shown it is capable of ramping up imports to the U.S. and rapidly dropping its prices on apparel and textile exports, citing a 40 percent decline in prices when quotas were first lifted worldwide in 2005. The letter notes that the U.S. textile industry has identified 63 separate subsidy programs the Chinese government uses to support its textile sector.

In an accompanying draft letter to Bush, the lawmakers said the recent announcement by the Commerce Department of seizures and fines associated with 1,000 cargo containers of illegally transshipped apparel from China in 2006 and 2007 underscores the need for a special monitoring program. Their letter to the President also stated that a monitoring program can “prevent illegal trade from getting started,” saying that the existing program has served as a deterrent to illegal dumping from Vietnam and will act similarly for China.

So far, 14 caucus members have signed the letter. They plan to gather signatures until Aug. 1 and then send it to Bush before Congress adjourns for the August recess.

“If nothing else, this letter will keep the issue alive and before the President,” Coble said in an interview. “We can no longer continue the surges from China. I do not want this to be cast aside and I would favor this program being extended beyond the calendar year.”

Bush took a tough stance against Chinese apparel imports when the administration self-initiated safeguard quotas that led to the bilateral agreement in 2005, but also has chosen diplomacy over punitive action in urging China to reform its currency. Administration officials have said they will not renew the Vietnam monitoring program when it expires in mid-January.

Sen. Barack Obama (D., Ill.), the Democrats’ presumptive presidential nominee, took a strong stance against China during the presidential primaries, saying he would crack down on the country’s alleged currency manipulation and scrutinize imports from China for product contamination. Sen. John McCain (R., Ariz.), the Republicans’ presumptive nominee and a staunch free trade advocate, has not addressed the issue of China on the campaign trail.

The textile industry recently worked with members of the House Appropriations Committee to include language in a nonbinding report accompanying a spending bill that urges the administration to extend the Vietnam monitoring program and expand it to include China. House Ways and Means Chairman Charles Rangel (D., N.Y.) recently said his committee will address the phaseout of Chinese apparel and textile quotas this year, as well as its impact on the domestic industry and developing countries.�