Textile Makers Push Bush For Action on China Imports

U.S. textile producers, poised to file China safeguard petitions based on actual market disruption, are pushing the government to self-initiate action.

WASHINGTON — U.S. textile producers, poised to file China safeguard petitions based on actual market disruption using current import figures, are pushing the Bush administration this week to self-initiate China safeguard cases.

A coalition of trade associations, including the National Council of Textile Organizations, the American Manufacturing Trade Action Coalition and the National Textile Association, along with the UNITE HERE union, filed 12 petitions based on the threat of market disruption in October targeting $1.9 billion in Chinese imports for further quota restraints. The coalition sought to preempt what it asserted would be surges in imports in the U.S. once quotas were lifted on Jan. 1.

However, those petitions and the government’s review process have been caught up in a legal tug-of-war and suspended by a preliminary injunction for the past two months.

The coalition, in light of one private firm’s Chinese export data, expects the U.S. Department of Commerce’s January import report on Friday to reveal rises in key apparel categories. The statistics indicate apparel exports to the U.S. in the targeted safeguard categories grew exponentially last month.

“We need the government to self-initiate,” said Cass Johnson, president of the NCTO, which published information this week compiled by Global Trade Information Services, a Columbia, S.C.-based firm that collects trade statistics from 68 countries under contract. “If the numbers coming out are as huge as China’s export figures are indicating, a four-month-long safeguard process is going to be too late.”

Johnson stressed the coalition would give the Bush administration a week to self-initiate, and if it doesn’t take action, the coalition would file another round of safeguard petitions, based on actual market disruption, seeking to impose fresh quotas on Chinese imports.

The report shows Chinese exports of cotton knit shirts to the U.S. rose 1,836 percent to 18.2 million units in January, while shipments of cotton trousers increased 1,332 percent to 26.6 million units.

Don Brasher, president of Global Trade, said the export apparel increases from China would not be fully reflected in Friday’s U.S. import statistics because of the lag time — goods shipped from China versus goods entering U.S. ports.

“January’s numbers will reflect goods shipped in November and December, and China was still restrained under quota at that time,” Brasher said. “We won’t have a new trade pattern until we get February data.”

This story first appeared in the March 10, 2005 issue of WWD.  Subscribe Today.

China controls 25 percent of the U.S. apparel and textile import market, and Brasher said he expects that share to grow to more than 50 percent in the next two to three years.

China’s U.S. import share of cotton trousers was 1.5 percent in 2004 because of strict quota limitations, said Brasher, who noted that it will easily grow 20 to 30 percent in the next couple of years. China controlled 1 percent of the U.S. import market in cotton shirts last year and Brasher said that share should gain by 20 to 40 percent in the next three years.

“The fact that some of these [export categories] grew by 1,000 percent was absolutely predictable,” Brasher said.

Retailers and importers have maintained there will not be a surge in imports because of the threat of safeguard petitions and a commitment to a diversified sourcing base.

Kevin Burke, president and chief executive officer of the American Apparel & Footwear Association, said most companies will keep diversifying their sourcing, although he acknowledged there will continue to be consolidation in sourcing.

“Clearly, there is a shifting from the Western Hemisphere and other Asian countries to China,” said Burke. “Safeguards would do some damage to China, but they would also benefit India and Pakistan. The reality is safeguards would not bring any benefit to U.S. textile makers because those countries, like India and Pakistan, don’t use U.S. inputs.”

Exports From China to the U.S. Of Major Apparel Products (in Units)
Jan. 2004 Jan. 2005 % Change
Bras 4.6 million 10.8 million 136%
Cotton knit shirts 941,117 18.2 million 1836%
Men’s woven shirts 2.23 million 8.1 million 267%
Cotton trousers 1.86 million 26.6 million 1332%
Dressing gowns 3.34 million 5.26 million 58%
Underwear 1.7 million 11.14 million 550%
Man-made fiber knit shirts 1.35 million 4.05 million 198%
Source: Extrapolated by NCTO from Global Trade Atlas’ compilation of Chinese Customs data