By  on September 14, 2005

WASHINGTON — The growth of Chinese apparel and textile imports into the U.S. maintained a fast pace in July, as the U.S. and China remained deadlocked over a comprehensive import restraint agreement.

Textile and apparel imports from China rose 41.7 percent to 1.54 billion square meters equivalent in July versus a year earlier, far outpacing total global growth of 105 million SMEs and contributing to the second-highest volume of imports for any month on record, according to Ross Arnold, international trade specialist at the Commerce Department's Office of Textiles & Apparel.

Apparel imports from China in July gained 338 million SMEs to 645 million SMEs, while total apparel imports from the world rose 101 million SMEs to 1.99 billion SMEs. On the textile front, imports from China grew by 117 million SMEs to 901 million SMEs, while textile imports from the world inched up by 3 million SMEs to 2.35 billion SMEs.

The U.S. and China have failed to cement a deal on a broad agreement to restrict imports of apparel and textiles after four rounds of negotiations. A fifth round could be slated for the end of the month. Quotas were dropped this year among all World Trade Organization countries, but China's WTO ascension agreement allowed countries to impose safeguard quotas on its goods through 2008.

U.S. retail, importer and textile executives all agree on the need for a long-term deal to replace the system of safeguard quotas, which leave uncertainty in sourcing plans, but they differ on what the deal should contain. The U.S. has put forward a deal that would hold a wide range of categories to a low growth rate through 2008, while China wants higher growth on a narrower group of goods through 2007. Safeguard quotas are set at 7.5 percent annual growth.

"What the numbers show is that China remains as big a threat as ever," said Cass Johnson, president of the National Council of Textile Organizations. "The Chinese government said the surge earlier in the year was a blip, but these numbers prove it was not."

Johnson said the industry will continue to file new safeguards soon, seeking a reapplication of all of the current safeguards, most of which expire at the end of the year."Until we get more safeguards put in place or a comprehensive deal is reached, you will continue to see this growth from China," said a spokesman with the American Manufacturing Trade Action Coalition.

Importers, who have lobbied against the safeguards, have changed their position and are now seeking a broad textile agreement to bring more predictability to the supply chain.

Stephen Lamar, senior vice president at the American Apparel & Footwear Association, said China has long been a restrained country, so "when you remove quotas, they begin to grow naturally."

"You see that the growth occurred largely at the expense of other countries in Asia that were traditionally viewed as outward processing arrangements," Lamar said, such as Hong Kong, South Korea and Taiwan. "At the same time, you are also seeing healthy growth in general from other countries, as well."

There's been significant growth, for example, from India, Bangladesh and Indonesia.

The Bush administration recently imposed safeguard quotas on two additional categories — bras and synthetic filament fabrics — bringing the number of categories covered this year to nine and valued at $1.9 billion. There is a 10th safeguard category covering socks.

Imports from China in product categories currently under safeguard quotas increased drastically in July on a year-over-year basis. Among the 10 categories under quota, imports of Chinese cotton trousers jumped 213.4 percent in July against a year ago, while shipments of woven shirts leaped 365 percent and imports of man-made fiber trousers jumped 376 percent.

In categories where the government has delayed decisions on pending safeguard petitions, Chinese imports of cotton and man-made fiber nightwear shot up 1,074 percent and imports of sweaters rose 1,279 percent. The value of textile and apparel imports from China increased to $13.05 billion for the first seven months of 2005 compared with a value of $7.89 billion in the year-to-date period in 2004.

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