By  on June 19, 2009

WASHINGTON — The U.S. International Trade Commission voted on Thursday to move forward with the first general Chinese safeguard case decided under the Obama administration, which could have implications for other industries like textiles.

The domestic textile industry is closely watching the case as a test of the administration’s stance on trade enforcement. Accepting the case could send a message about the administration’s “willingness to be tough on China,” said Cass Johnson, president of the National Council of Textile Organizations. The textile-specific China safeguard expired last year.

The commission voted four to two in favor of quotas on Chinese-made tires after finding evidence of market disruption. The complaint was filed by the United Steelworkers. The ITC will make a recommendation to President Obama and U.S. Trade Representative Ron Kirk by July 9 on what the quotas should be. The ITC is an independent, quasi-judicial federal agency that determines the effect imports have on U.S. industries and directs actions against unfair trade practices.

Obama will make the ultimate decision about whether to impose quotas and what they should be. Former president George W. Bush denied several petitions filed under the China safeguard provision, although his administration did self-initiate apparel quotas safeguards against China. If Obama decides in favor of quotas on Chinese tires it could be seen as a sign the path is clear for other cases.

“Should this case succeed at the White House, it will be interesting to see whether there are apparel cases filed,” said David Spooner, an attorney with Squire, Sanders & Dempsey and a former assistant secretary of commerce for import administration under Bush who represented some of the Chinese tire importers in the ITC hearing. “If Obama’s more inclined [to decide affirmatively], there’s a lot of pent-up demand for other petitions.”

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