WASHINGTON — Grant Aldonas, undersecretary of commerce for international trade, said Tuesday the U.S. plans to pressure the Chinese for greater textile and apparel market access, though a broader quota agreement has been ruled out.
Aldonas said at a trade association event that the Bush administration will choose its textile battles with China and focus on urging the country to stop providing subsidies in the form of export tax rebates averaging 17 percent to textile and apparel exports to the U.S., as well as eliminating intellectual property theft.
“The Chinese have been categorical with our industry and in discussions with us about a comprehensive agreement,” Aldonas told reporters after a breakfast sponsored by the Washington International Trade Association, which focused on the Bush administration’s report and recommendations on how to help the flagging manufacturing sector stay competitive.
“They are not interested in a comprehensive agreement,’’ he said. “The reaction on the Chinese side is they still don’t feel like there is enough of a threat’’ with individual safeguard actions “there that they can’t live with the uncertainty.”
In December, the U.S. imposed one-year safeguard quotas on three apparel and textile categories under an agreement China reached upon entering the World Trade Organization. A 90-day consultation period over the three current quota safeguards expired while a U.S. delegation led by Aldonas was in China, and no agreement was reached on a more comprehensive quota deal. As a result, a 7.5 percent growth cap will remain on imports of knit fabric, dressing gowns and robes and bras from China until Dec. 23.
Until Tuesday, it was unclear whether the U.S. would continue to push the Chinese for a quota agreement.
“My guess is we’ll see continuing trade friction as industry decides to file cases, whether it is under a safeguard mechanism, a dumping action or a countervailing duty action or through the Customs area,” Aldonas said. “That doesn’t mean [we] won’t continue to work on the Chinese to try to make sure we’ve eliminated market access barriers and intellectual property problems in China with respect to textiles.”
Cass Johnson, president of the National Council of Textile Organizations, said outside of the safeguards the textile industry doesn’t have the tools to go after China, which is a nonmarket economy.“The government is an essential partner in attacking these unfair trade practices,” Johnson said. “It is disappointing. If the government chooses not to play a proactive role, it bears a large measure of responsibility if jobs around the world are lost.”
Anxiety is growing as the year-end WTO deadline for the phaseout nears. China is expected to become a global powerhouse, at the expense of apparel and textile workers at home and around the globe, once quotas are removed. This has created a backlash in the U.S. during a presidential election year focused on the shift of U.S. jobs overseas and job losses at home.
On the manufacturing front in general, Aldonas touted the administration’s steps in creating a number of councils and advisory groups to analyze the problems and implement solutions to help U.S. manufacturers. The administration recently announced an executive from a carpet manufacturer will take the key manufacturing post.
“I want to put to rest the [notion] manufacturing is being hollowed out,” Aldonas said. “Nothing could be more wrong.”
Aldonas characterized the domestic textile industry as going through an adjustment period after operating under 40 years of quota protection. He stressed more protections would not help.
“I think we’ve got to stick with our obligations [to eliminate quotas],” he said, responding to a question about extending global quotas on apparel and textiles among all WTO countries, for which dozens of trade associations are clamoring. “At some point, you have to acknowledge that further protection has left the industry in a very fragmented state and that’s not healthy.”
Augustine Tantillo, Washington coordinator of the American Manufacturing Trade Action Coalition, said repealing global quotas will lead to the loss of tens of thousands of additional textile jobs.
“When you look at the sheer number of people who are involved in this, you would hope our government would have a better answer than it’s time to adjust,” Tantillo said.
Aldonas said he will leave the domestic industry’s “adjustment” process to run its course and focus instead on dealing with unfair trade practices.
“The far more important aspect of this is you still have in China a great deal of state-owned manufacturing capacity that is subsidized by nonperforming loans,” he said. “There are a couple of ways to come at the problem: either eliminate the subsidies to rationalize supply and demand or I’d like to see U.S. fabric used, so we are at least a part of the food chain.”The U.S. will have an opportunity to continue the dialogue with China on bilateral trade issues at the U.S.-China Joint Commission on Commerce & Trade meeting here set for April 21-22.
Aldonas said his top agenda items are intellectual property protection, as well as continuing the discussion on what is required of China to become a market economy.
“To the extent we accelerate the pace of China moving to a market economy, good things could flow out of our relationship,” he said. “To the extent the pace slows down, we will have real problems in our trade relationship.”
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews