By  on September 21, 1994

WASHINGTON -- Textile and apparel imports rose 4.8 percent in July compared with a year ago, in a virtual rerun of their 5.2 percent gain recorded in June, according to Commerce Department data reported Tuesday.

Once again, Mexico posted the strongest growth of all foreign suppliers. During July, its shipments soared 20.7 percent versus a year earlier.

In another development, domestic textile producers, who have been pushing for a change in the rule of origin for apparel imports, alleged the July import report shows clearly that China's manufacturers are taking advantage of a U.S. Customs Service "loophole" to utilize Hong Kong's quotas.

Overall, total textile and apparel imports during July were 1.545 billion square meters equivalent and set a one-month record, eclipsing June's 1.54 billion SME. For the first seven months of the year, they totaled 9.7 billion SME, up 7.5 percent from the same period a year ago. For the year that ended in July, they rose 9.1 percent to 16.5 billion SME.

The pace of apparel imports continued their recent seesaw performance. After jumping 16.2 percent in May and just 3.2 percent in June, apparel imports rose 6.6 percent in July to 794.2 million SME. For the year to date, these imports were up 7.7 percent to 4.6 billion SME and were up 8.2 percent to 7.9 billion SME for the 12 months ending July.

Textile imports continued to moderate. After rising 10.7 percent in May and then 7 percent in June, these imports inched up 3 percent in July to 751.1 million SME. For the first seven months of this year textile imports were up 7.2 percent to 5.1 billion SME, and they rose 9.9 percent to 8.6 billion SME for the year ending in July.

A prime reason for the relative easing of imports has been the near halt in growth of Chinese apparel and textiles. For several years running, these imports invariably rose by double-digit amounts for the month and year to date. Combined U.S. imports from China were up just 2.1 percent, by 4 million SME, to 214 million SME in July, compared with July 1993.

For the first seven months, these textile and apparel imports rose 0.1 percent, or 2 million SME, to 1.2 billion SME.This slowdown in shipments is due largely "to the fact that as a result of many overshipments by China in previous years, many categories closed early in the year, and now about one-third of their categories either are embargoed or very nearly filled," said Donald Foote, agreements division director with the Commerce Department's Office of Textiles and Apparel.

For example, Foote noted that U.S. imports from China of cotton sheeting, category 313, plummeted 61.4 percent, to 15.7 million SME, for the year to date. Imports of cotton trousers for adults and children, category 347/348, dropped 59.5 percent to 14.9 million SME, for the year to date.

Some of this slack has been filled by Hong Kong. During July, its textile and apparel exports to the U.S. rose 15.8 percent to 102 million SME, and for the year to date, these are up 11.7 percent to 547 million SME.

Analyzing the import data from China and Hong Kong, William J. Armfield IV, the American Textile Manufacturers Institute president, concluded: "Massive shipments of Chinese-made apparel by Hong Kong were largely responsible for the all-time month for textile and apparel imports."

Armfield, who also is vice chairman, Unifi Inc., Greensboro, N.C., said the July import data indicate "China continues to use loopholes in recent Customs rulings to circumvent its quotas by having goods 'cut' in Hong Kong, while claiming them against Hong Kong's quotas; this, while the apparel items are actually being sewn in China."

The ATMI wants a change in the rule of origin to be included in the implementing legislation for the GATT Uruguay Round treaty. The proposal would shift the country of origin for import purposes to where the apparel is sewn from where the fabric is cut.

Apart from Hong Kong, though, Mexican manufacturers appear to be filling much of the void in China's import growth. During July, U.S. imports of textiles and apparel from Mexico were up 20.7 percent, or 14 million SME, to 82 million SME.

For the year to date, these imports from Mexico rose 19.7 percent, or 81 million SME, to 491 million SME. Mexico is the U.S.'s sixth largest source of imported apparel and textiles. Should the pace of its monthly increases continue, it's likely Mexico will overtake number five, South Korea, by year's end. Most of the increase for the year to date was concentrated in a handful of categories, such as knit shirt and blouses and man-made fiber underwear.Meanwhile, Canada, which like Mexico is a partner with the U.S. in the North American Free Trade Agreement, continued to post strong export gains. During July, its textile and apparel shipments to the U.S. rose 9.9 percent to 101 million SME.

-- Fairchild News Service

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