By  on April 16, 2007

WASHINGTON — China, South Korea and Viet­nam each increased apparel and textile imports to the U.S. in February, according to a Com­merce Department report Friday that also showed a reduction in the U.S. trade deficit for the second straight month.

Total apparel and textile imports in February increased 6.2 percent compared with January 2006, to 4 billion square meter equivalents valued at $7.2 billion.

China continued to lead the category with a 32.7 percent rise to 1.5 billion SME, worth $2.3 billion; apparel imports shot up 56.8 percent as textile imports grew 22.4 percent.

Taking a tougher stance on China's trade policies, the Bush administration in recent months brought three cases against the country to the World Trade Organization, two related to intellectual property rights and one on illegal subsidies. The administration also reversed a decades-old policy of exempting China from countervailing duties that are intended to combat government subsidies.

The U.S. deficit in goods with China shrank to $18.4 billion in February from $21.3 billion in January. Congress is pressuring the White House to take action against China's currency policies, which many critics argue restrain the value of the yuan and give a trading advantage to goods made there.

The U.S. trade deficit on all goods and services declined to $58.4 billion in February from $58.9 billion in January, as imports decreased more than exports.

Nariman Behravesh, Global Insight's chief economist, predicted a decline in the trade deficit in 2007, with some temporary swings because of oil prices.

"Exports will continue to grow strongly, thanks to robust growth overseas and a weaker dollar," Behravesh wrote in a report. "Also, the marked deceleration in imports will last through much of this year because of weak domestic demand growth."

Many Democratic lawmakers on Capitol Hill point to the U.S. trade deficit, which grew to a record $763.6 billion last year, as a sign of failed policies. Commerce Secretary Carlos Gutierrez has countered that the administration's efforts to gain better access to overseas markets in hopes of spurring exports represents movement in the right direction.

"U.S. exports boost jobs, wages and contribute significantly to our growing economy," Gutierrez said in a statement. "Free trade agreements are the engine for U.S. export growth, creating additional opportunities for American workers."Free trade pacts and other arrangements that bring down barriers to commerce can also expose U.S. producers in some industries to stiffer competition. The theory is that the increased business will help economies in both countries.

On April 1, the U.S. wrapped up negotiations for a free trade agreement with South Korea, which a U.S. trade official said would eliminate duties on 61 percent of apparel and textile products as soon as the deal was implemented. It is unclear when Congress will consider the pact.

In February, South Korea, showing particular strength in certain filaments and knit fabric, drove up apparel and textile imports 19.2 percent to 182 million SME. Vietnam, in its first full month of quota-free trade with the U.S. as a member of the WTO, was also a winner in the apparel and textiles trading game, with imports up 34.9 percent to 111 million SME.

Losing ground in the U.S. import market were Pakistan, falling 17.3 percent to 221 million SME; Mexico, down 13.1 percent to 243 million SME, and Canada, off 21.2 percent to 163 million SME.

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