WASHINGTON — The U.S. Justice Department has asked the U.S. Court of International Trade to stay a preliminary injunction pending the conclusion of an appeal it plans to file soon in the Federal Circuit Court of Appeals.
The government’s motion, filed late Friday, is the latest turn in an ongoing legal battle over whether the government has the authority to impose limits on Chinese textile and apparel imports, based solely on threat as opposed to actual market disruption.
“…A stay is necessary to eliminate any impediment to communications between the United States and the People’s Republic of China…,” Justice Department lawyers stated in the brief. “A stay is also necessary to enable [the] United States to protect domestic textile producers from the irreparable harm they could suffer as a result of the injunction’s bar upon even the consideration of safeguards, pursuant to existing procedures, until imports of textiles from China have caused actual market disruption.”
The government added, “Judiciary lacks the authority to issue orders that can be construed as undermining or limiting the power of the Executive to negotiate or confer with foreign governments in matters of international trade policy.”
The government said the CIT should lift part of the injunction, allowing it to “self-initiate” safeguards and consider and analyze pending petitions and hold discussions with Chinese and other officials.
If the court refuses to stay the injunction entirely, a limited stay would still leave intact the CIT’s injunction against the imposition of threat-based safeguards, but allow the government to review pending petitions and hold consultations with China, Justice Department lawyers argued.
Global textile and apparel quotas expired on Jan. 1. The seismic change prompted worldwide concern over China’s potential to monopolize production and displace millions of workers.
China remains subject to an agreed-upon safeguard or temporary quotas through 2008 in certain areas. A coalition of U.S. textile, fiber and some apparel producers, as well as the union UNITE HERE, seized on the safeguard mechanism in October, filing 12 petitions targeting some $1.9 billion in Chinese imports for further quota restraints.
In response, the U.S. Association of Importers of Textiles and Apparel took the dramatic step of suing five federal agencies on Dec. 1 in federal court, claiming the government violated its own regulations and the Administrative Procedures Act, when it agreed to accept safeguard petitions based on the threat of market disruption not actual harm. The CIT imposed a preliminary injunction on Dec. 30, barring the government from accepting or reviewing China safeguard petitions.
This story first appeared in the January 31, 2005 issue of WWD. Subscribe Today.
In its motion for a stay, lawyers argued that USA-ITA’s members would not be harmed by the government’s consideration of petitions or meetings with Chinese officials prior to the imposition of any safeguard.
“By contrast, in the absence of a stay, the injunction could impede the government’s ability to gather information to assess whether a safeguard was viable, delaying the administrative process until any imminent threat of market disruption developed into actual disruption.”
The government claimed the delay to the safeguard process would let apparel and textile imports from China increase rapidly.
USA-ITA members say they’ve been harmed by CITA’s consideration of the petitions because they’ve had to move sourcing out of China.