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government-trade

China Decries Textile Quota Cut But Says it Will Continue Talks

WASHINGTON -- The Chinese government registered a "strong protest" Friday against an "irresponsible" U.S. plan to curb textile quotas later this month, but said it planned to continue negotiations with the U.S. on an agreement to limit illicit apparel...

WASHINGTON — The Chinese government registered a “strong protest” Friday against an “irresponsible” U.S. plan to curb textile quotas later this month, but said it planned to continue negotiations with the U.S. on an agreement to limit illicit apparel exports.

In a four-paragraph statement released by the Chinese Embassy here, China’s Ministry of Foreign Economic Cooperation and Trade “solemnly declared that the Chinese side will continue the talks with the U.S. as scheduled in order to seek a solution to the problem through consultation.”

The Ministry added, however, that if the “U.S. side is bent on having its own way on the bilateral textiles trade issue, China will have to take retaliatory measures correspondingly.” It did not specify what kind of measures might be taken.

The U.S. has offered to meet with Chinese trade officials in Beijing on Jan. 15 and 16 to resolve the dispute, but no decision has yet been made. If the negotiators don’t meet before the Jan. 17 deadline for a new bilateral pact, they aren’t expected to meet until after Treasury Secretary Lloyd Bentsen completes his visit to China Jan. 22. In a briefing with reporters, Bentsen said, “Hopefully, this can be worked out if they would come to the negotiating table.”

The American Textile Manufacturers Institute had no formal response to the Chinese reaction. However a spokesman said the industry has supported a bilateral agreement with China all along, providing it addresses the transshipment problem. Importers and retail officials welcomed China’s statement that it would pursue negotiations, but did not relent in their criticism of the U.S. action.

“The Chinese statement sends a message that the U.S. action went too far in trying to push a quick settlement,” said Julie Hughes, division vice president for government relations at the Associated Merchandising Corp. and USA-ITA chairman.

Laura Jones, the U.S. Association of Importers of Textiles and Apparel executive director, said she hoped for a “quick and speedy conclusion” to the bilateral. She added that the U.S. should take the transshipping issue out of the negotiations and let the Customs Service deal with it as an enforcement matter.

“I hope the administration realizes it can’t cut quotas in a vacuum,” Jones said. “They can’t cut quotas and expect that nothing else in the U.S. will be touched by this. It may end up costing more jobs than saving jobs.”

Importers have conveyed this message in the past to the administration, she said, and planned to relay it again even louder.

From the retail perspective, Robin Lanier, vice president for international trade with the International Mass Retail Association, urged the U.S. to find a compromise to settle the transshipment issue and avoid quota reductions.

“If we stonewall, I worry that the Chinese will take their threats up a notch,” Lanier said. “The worry is that they could cancel their contract for aircraft, and that would hurt.”

There has been speculation that the quota curb proposal was made by the administration in an effort to molify the domestic textile industry, which was disappointed at the outcome of the GATT talks last month. The industry sought a 15-year phaseout of the MultiFiber Arrangement, but got only a 10 year period.

“What other industry has its own USTR?” Lanier said. “What else can the negotiator do but try to make the industry happy? Two weeks ago [Chief Textile Negotiator] Jennifer Hillman did not make them happy. Thursday she made them happy. What troubles me about this is that they are using transshipment as a means to roll back quotas.”

The Customs Service has estimated that about $2 billion in Chinese textiles and apparel is evading American import quotas each year.