By  on March 22, 2005

WASHINGTON — A coalition of textile and fiber producers and organized labor may file new China safeguard petitions based on actual market disruption as early as next week, after the latest court ruling to quash their hopes of getting quick relief from threat-based petitions.

The U.S. Court of International Trade on Friday denied the Justice Department’s motion to dismiss a lawsuit filed by the U.S. Association of Importers of Apparel & Textiles challenging the government’s authority to impose safeguard quotas on Chinese apparel and textile exports based on the threat of market disruption. That means the CIT’s two-month-old temporary injunction barring the government from accepting or reviewing threat-based safeguards petitions, or from self-initiating such petitions, remains in place.

Senior Judge Richard W. Goldberg rejected the government’s arguments that the case was not proper for review and that USA-ITA members did not exhaust all of the available administrative remedies. Goldberg deferred the underlying issues, such as whether the government violated the Administrative Procedures Act, for further consideration.

Justice Department lawyers want to have the CIT’s injunction overturned at the Court of Appeals for the Federal Circuit, which has scheduled oral arguments for the week of May 2. They have also asked for a stay pending the appeal.

As the legal tug-of-war over the China safeguards plays on, imports from China flooded the U.S. market in January. House members from textile-producing states are ratcheting up the pressure on the Bush administration to impose safeguard quotas on China based on actual market disruption even as President Bush is poised to send the controversial Central American Free Trade Agreement to Congress for consideration.

Throwing another factor into the mix, Secretary of Commerce Carlos M. Gutierrez on Monday announced a new system to monitor imports of textiles and apparel. He said it should be in place by the first week in April, when data for textile and apparel imports for the first quarter of the year are likely to be available. The changes would eliminate the one-month lag time in reporting import figures, a complaint of the industry that has delayed the filing of market-disruption cases. The figures will be reported biweekly on a Web site maintained by the department’s Office of Textiles & Apparel.Meanwhile, several China safeguard scenarios could play out over the next month:

  • The Bush administration might self-initiate safeguard cases and impose quotas on apparel and textile categories.
  • The appeals court could grant the motion to stay, allowing the threat-based safeguard cases to proceed.
  • The domestic coalition may file petitions based on actual market disruption.
“In essence, the court case will eventually be overtaken by the fact the import data is so dramatic, which will provide a basis for market-disruption cases,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition.

Cass Johnson, president of the National Council of Textile Organizations, said: “The pressure [on the Bush administration to act] is there from the import numbers, China’s export numbers and U.S. employment numbers. The onus is on the administration.”

Opinion is divided over whether the administration will self-initiate China safeguard quotas as part of a deal to garner support for CAFTA, which faces an uphill battle in Congress, including opposition from GOP lawmakers from textile states. It is also unclear whether GOP textile-state lawmakers would be persuaded to vote for the trade treaty in exchange for China safeguards.

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