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China Leads Imports To Record High in ’02

Quota removal gave China the bounce it needed to become the top supplier of apparel and textile imports to the U.S. in 2002.

WASHINGTON — Quota removal gave China the momentum it needed to become the number-one supplier of apparel and textile imports to the U.S. in 2002 and push overall imports for the sector to new highs.

This story first appeared in the February 21, 2003 issue of WWD.  Subscribe Today.

The record import numbers come at a time when the U.S. is negotiating a bilateral textile and apparel trade pact with Vietnam to control some of its explosive trade with quotas, while it simultaneously considers a separate request to place quotas on certain imports from China.

Apparel and textile imports from around the world surged 16.7 percent last year, marking the biggest growth since 1997, according to the Commerce Department’s latest trade report released Thursday. Textile imports rose 25.9 percent to 21.02 billion square meters equivalent for the year compared with 2001, while apparel imports rose 7.2 percent to 17.25 billion SME in 2002.

Meanwhile, the sector’s imports surged 36.6 percent in December, marking the highest growth rate in 17 years, said Donald Foote, director of the agreements division of Commerce’s Office of Textiles and Apparel.

“The economic rationale for 2002’s accelerating surge is the removal of quotas from some high-volume textile products along with some apparel items,” said Foote.

About 79 percent of the 2002 textile import growth was in only seven categories, virtually all of which had quotas removed on Jan. 1, 2002, he said. They include man-made fiber furnishings including curtains, blankets and quilts; a cotton category comprised of towels, kitchen linens and handbags; knit, specialty and nonwoven fabrics, and man-made fiber luggage.

“China has taken full advantage of the withdrawal of quotas by joining the World Trade Organization in late 2001,” said Foote. “As a result, China’s 2002 trade elevated 125 percent, an unprecedented increase for a major supplier over a year’s time.”

China’s gain alone was one-half of the total rise in the U.S. textile and apparel imports in 2002, Foote said. Seven other countries led by South Korea, and including Pakistan, Vietnam, India, Brazil, Turkey and Taiwan, accounted for another 40 percent of the total import increase.

For 2002, China’s share of U.S. imports totaled 13 percent. A year ago, it was in third place with a 6.7 percent share of imports, but in the late-Eighties and early-Nineties, China’s share of U.S. imports ranged from 13 to 14 percent before it lost its top ranking to Mexico in 1996, as NAFTA kicked into full gear.

The American Textile Manufacturers Institute made a request last July to reimpose quotas on five categories from China, including bras, dressing gowns, gloves, man-made fiber luggage and knit fabric. The Commerce Department’s Committee for the Implementation of Textile Agreements is reviewing the request, which was filed under a special deal China made to secure membership in the WTO.

The other big story in 2002 was Vietnam.

In 2002, apparel and textile imports from Vietnam, which is the 24th-largest supplier to the U.S., skyrocketed by 995 percent to 358 million SME, but that growth was based on miniscule levels. Nevertheless, several apparel categories posted increases of over 1,000 percent, such as women’s and girls’ cotton coats, and now account for a large share of the U.S. import market.

It is for that reason that David Spooner, special textile negotiator for the Office of the U.S. Trade Representative, and Jim Leonard, an assistant deputy secretary at Commerce, are in Vietnam this week to negotiate a bilateral textile and apparel agreement.

At issue is for which apparel and textile categories the U.S. will choose to negotiate quotas, the size of those quotas, growth rates, and whether the U.S. will tie quota growth increases to improvements in labor standards in the agreement.

“China sticks out like a sore thumb,” said Charles Bremer, director of international trade at ATMI. “It impacts us because it takes away business from the Caribbean and from Mexico [significant buyers of U.S. fabrics and yarns] and puts severe downward pressure on prices for fabrics and yarns.”

Bremer said Vietnam is “well beyond the points where it should have been controlled.” He said the U.S. controls much smaller suppliers of apparel and textiles with quotas, such as Malaysia, Egypt and the United Arab Emirates.

The ATMI said the categories of immediate concern from Vietnam are knit shirts, man-made fiber and cotton coats and trousers, woven shirts, dresses, nightwear, coveralls and luggage.

Vendors and retailers that import goods contend that Vietnam and China are each detracting business from other Asian suppliers such as Bangladesh, Hong Kong and Taiwan, not replacing U.S. manufacturing.

“It is no big surprise that imports are up,” said Julia Hughes, director of international trade at the U.S. Association of Importers of Textiles & Apparel. “Everyone expected, once China joined the WTO and received the quota phaseout benefits, trade would go up and it did because there are shifts from other Asian suppliers to China.”

Hughes also claimed that the 2002 import numbers are skewed because imports were hit hard in 2001 due to the Sept. 11 terrorist attacks and a bad holiday season, which dramatically slowed import growth.