WASHINGTON — The import picture in June and the first half of the year told the same story: China is seemingly unstoppable.
This story first appeared in the August 18, 2003 issue of WWD. Subscribe Today.
China is still muscling out its competition and driving the rest of the world’s trade in apparel and textile down, while the domestic textile and fiber industry fights to impede its explosive growth. Imports of apparel and textiles from China rose 54.9 percent in June versus a year ago and ballooned by 89.5 percent in the first half to 3.59 billion square meters equivalent, according to the Commerce Department’s trade report released Thursday.
Over the last 12 months, China’s share of the U.S. import market has grown to 16.3 percent, which is larger than Mexico’s high of 14.5 percent in 1999 and Taiwan’s previous high in 1983 of 15.9 percent, according to Donald Foote, director of the agreements division at Commerce’s Office of Textiles & Apparel. Global imports of apparel and textiles in June were the third largest on record, in terms of volume, according to Foote.
“The contrast is the real story,” said Foote. “Trade is growing at a nice clip for China and Vietnam is on the map, but the rest of the world’s trade is declining.”
In June against a year ago, imports of textiles and apparel in the world rose 7.8 percent to 3.52 billion SME. Apparel imports rose 11.2 percent in the same period to 1.5 billion SME, while textile imports rose 5.3 percent in June to 1.95 billion SME.
By comparison, Mexico’s trade fell 16.3 percent in the first half, Canada’s fell 10.8 percent and Thailand’s 16.9 percent. Imports of apparel and textiles from Vietnam rose 418 percent in the first half against a small base, while imports from Honduras rose a whopping 17.5 percent and imports from India rose 13.3 percent.
Against the backdrop of China’s dominance, the U.S. said Wednesday it would move forward with three petitions filed by the domestic textile and fiber industry requesting safeguard action against Chinese imports, although it rejected a fourth petition for gloves, as reported. A coalition of textile and fiber groups has launched an aggressive lobbying effort to protect the beleaguered industry from Chinese imports it claims are devastating the sector.
The Committee for the Implementation of Textile Agreement cleared three petitions for dressing gowns and robes, bras and knit fabric. Imports of bras from China rose 161.2 percent for the year ended June 30, as imports of dressing gowns rose 266.6 percent and imports of knit fabric rose 165.5 percent, according to Commerce figures.
“The numbers are proof positive why the China safeguards are so desperately needed,” said Lloyd Wood, director of media relations at the American Manufacturing Trade Action Coalition. Ticking off the import increases in the three categories under consideration for safeguards, Wood said, “If that is not a surge disrupting the market, what is?”
He said he found it shocking that Mexico’s imports dropped so “precipitously.”
“You are talking about a country that is a member of the North American Free Trade Agreement, has training advantages, has a large population with relatively low-wage labor costs and has a land bridge with the U.S., and the Chinese are taking market share from the Mexicans hand over fist,” Wood said.
On the opposite side of the debate, the U.S. Association of Importers of Textiles & Apparel this week called on the Bush administration to reject the domestic industry’s petitions, claiming the requests contained “virtually no specific U.S. industry information to support a very drastic action to reimpose quota restrictions on apparel products.”
In other trade news, the U.S. and European Union said Wednesday that they have agreed on a framework on how to reduce agriculture subsidies and import duties in the current round of global trade talks. The announcement by the two trading powers is aimed at jump-starting stalled negotiations in advance of a critical meeting of ministers in the World Trade Organization in Cancun next month.
A day earlier, the U.S., EU and Canada presented a joint proposal on lowering tariffs on industrial products, including apparel and textiles, in advance of the Cancun meeting. But agriculture is seen as the key component and obstacle of the complex and often contentious talks among 146 WTO member countries. The joint proposal does not specify a reduction in subsidies and import duties nor does it set any deadlines.
The U.S. cotton industry receives subsidies from the government, although they vary substantially from one year to the next based on a number of factors, including world cotton prices.
Government cotton subsidies have ranged from several hundred million dollars to more than $2 billion, according to Gaylon Booker, a consultant for the National Cotton Council, which has some 25,000 members, including cotton farmers, gins and textile mills.
Booker said the NCC is supportive of the U.S. objective to have other countries reduce subsidies and tariffs to a “harmonized” level with the U.S., adding the EU’s agricultural subsidies, for example, are three times higher than those of the U.S. On average the U.S. maintains a 12 percent duty on agricultural products compared with the EU’s average of 31 percent, India’s average of 114 percent, Japan’s 51 percent and South Korea’s 66 percent.