By and  on November 10, 2006

WASHINGTON — China commanded the field of apparel and textile importers in September, capturing 40 percent of the market, as U.S. textile producers gird for Vietnam's growing global trade role.

China posted a 19.2 percent rise to 1.9 billion square meter equivalents, valued at $3.1 billion, according to the Commerce Department.

In a measure of China's dominance, apparel and textile imports from the world, excluding China, fell 5.4 percent to 2.9 billion SME.

China's growth was pushed along by trade in goods that were embargoed a year ago, but are now allowed in under a limited quota system hammered out between Beijing and Washington.

Overall, the U.S. registered a record $23 billion trade deficit in goods with China in September, up from $22 billion in August. Aided by cheaper oil prices, the total deficit with the world, in goods and services, narrowed to $64.3 billion from $69 billion in August, the biggest drop since February 2001.

"The China deficit is high profile and the China deficit is still rising, and anyone who is competing with China is still clearly having a lot of trouble," Nigel Gault, chief U.S. economist for Global Insight.

Increased apparel imports since the elimination of a global system of quotas last year have contributed to the deficit with China.

With the exception of some problems on the Chinese end allocating quotas to factories, trade with China has gone largely without a hitch, leaving lobbyists to turn their attention to Vietnam, another non-market economy.

Though much smaller — Vietnam's apparel and textile imports increased 16.5 percent in September to 112 million SME — the domestic textile industry sees shades of China in Vietnam, and industry lobbyists point to its state subsidies and other supports as unfair competition. Shipments from Vietnam likely will increase once quotas that restrain that country are eliminated.

The Bush administration agreed to monitor imports from Vietnam and possibly initiate antidumping cases on that country, which received the green light this week from the World Trade Organization to become its 150th member. The administration's action was prompted by Sens. Lindsey Graham (R., S.C.) and Elizabeth Dole (R., N.C.), who placed holds on legislation that would grant permanent normal trade relations with Vietnam.Until now, antidumping cases, which may impose tariffs on goods sold into the U.S. for less than cost or below their home-market price, have not been a factor in fashion as domestic producers lack the standing to bring such legal action.

Importers complained they were cut out of the loop on the decision to establish a monitoring system, which is still being devised. Sens. Gordon Smith (R., Ore.) and Dianne Feinstein (D., Calif.) also expressed concerns with the program and asked the administration to respond before the Senate votes on permanent normal trade relations with Vietnam.

Lawyers representing importers met with administration officials Wednesday to discuss the monitoring program and how antidumping laws would be applied in this case.

"We want to get this thing resolved,'' said Brad Figel, global director of government and public affairs at Nike Inc. "All of the companies want to support Vietnam, but we have serious concerns about the antidumping proposal."

Importers are looking for assurances that the program would be implemented in some predictable fashion, said Erik Autor, vice president and international trade counsel for the National Retail Federation.

Vietnam and China are far from the only apparel and textile import players picking up share of the lucrative U.S. market. Also posting significant increases were Indonesia (up 19.7 percent), India (12.7 percent) and Bangladesh (18 percent), with each country picking up steam in product categories where China is restrained by quotas.

On the losing end were the U.S.'s closest neighbors, Canada (down 21.3 percent) and Mexico (14.7 percent).

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