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Trade Battle: Industry Ups Pressure as U.S. and China Talk On

As Chinese and U.S. diplomats worked toward an agreement on textile and apparel imports, domestic producers field more safeguard petitions.

WASHINGTON — Textile trade tensions between the U.S. and China went up another notch Monday.

On the same day that Chinese and U.S. trade diplomats worked toward a comprehensive agreement on textile and apparel imports, domestic producers ratcheted up the pressure on the Bush administration and called for new restrictions on $944 million worth of goods. Four safeguard petitions were filed Monday and one was filed last month to restrict import growth.

The plea from the U.S. textile industry, claiming to be drowning in a flood of Chinese apparel and textile imports, came Monday as a U.S. trade delegation including U.S. Trade Representative Rob Portman and Commerce Secretary Carlos Gutierrez wrapped up meetings with its Chinese counterparts in Beijing.

The two sides did not reach a broad agreement on textile and apparel imports, but consented to continue consultations. Domestic manufacturers and importers have been pushing for a trade agreement that would bring more certainty to the business climate than current safeguards.

“The two sides agreed to keep the channel of exchange open and continue consultations to find out an appropriate way to solve the textile and garment issue,” said a statement on the Web site of China’s Commerce Ministry.

China has urged the U.S. to ease restrictions on textile and apparel imports and cut a deal similar to the one it reached with the European Union, limiting 10 kinds of imports to 8 to 12.5 percent growth through the end of 2007.

In May, the U.S. invoked the safeguard provision China agreed to when it joined the World Trade Organization, holding $1.31 billion worth of imports in seven categories to 7.5 percent growth. There are six other petitions outstanding. The safeguards can be renewed through 2008 and more categories could be added at any time.

“The U.S. textile industry will keep filing petitions until the U.S. and China reach a comprehensive agreement to moderate the growth of Chinese textile and apparel imports to a reasonable level through the end of 2008,” Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, said in a statement on the new petitions.

AMTAC is part of the group that filed four new safeguard petitions Monday covering nonknit shirts, skirts, pajamas, nightwear and swimwear, all in cotton and man-made fiber. Last month, a petition was filed for cotton and man-made fiber curtains.

This story first appeared in the July 12, 2005 issue of WWD.  Subscribe Today.

China’s apparel and textile imports rose 45 percent to 4.7 billion square meter equivalents in the January-April period, the first four months since the WTO dropped the system of quotas that restricted global trade for more than 30 years.

In some of the categories addressed in the new petitions, the rise in imports has been much more dramatic. For instance, preliminary figures through July 6 show the skirt category with an 879 percent rise to 3.7 million dozen, while the nightwear category is up 647 percent to 3.6 million dozen.

“They want all the categories that were under quota before the end of the agreement on textiles and clothing to be put back into place,” said Erik Autor, vice president of international trade counsel at the National Retail Federation. “This may also be an effort to ensure that all of these categories are included if and when there’s a comprehensive restraint agreement negotiated with the Chinese.”

Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel, said the categories covered by the petitions were “bizarre.”

“These products are surprising in that they are products that are really minimally [produced] in the U.S.,” she said.

For the petitions to be approved, the government has to determine the imports have hurt the domestic industry.

Stephen Lamar, senior vice president of the American Apparel & Footwear Association, said, “Just because the imports have surged, that’s not in itself evidence that there has been an adverse impact.”

The government has 15 working days to accept or reject the petitions. Acceptance is followed by a 30-day public comment period and then a 60-day window in which the government can reject the petition or implement safeguards.

In addition to AMTAC, the group includes the National Textile Association, the National Council of Textile Organizations and the union UNITE HERE.

Separately, the Hosiery Association, in conjunction with NTA, NCTO and AMTAC, filed a petition requesting that safeguards be reimposed on Chinese sock imports. The current safeguard quotas expire on Oct. 28. This case might help determine how smoothly and quickly safeguards can be renewed.

The meetings in Beijing did pay some dividends on intellectual property rights.

“We have made some progress in areas of key concern to U.S. businesses, particularly with regard to [intellectual property right] enforcement,” Portman said in a statement.

On that front, China agreed to increase criminal prosecutions, reduce export of infringing goods and improve national police coordination.

Portman also said there were still “serious concerns” about the lack of access U.S. firms have to the Chinese market.

“China is a major beneficiary of the global trading system,” he said. “Along with that comes responsibilities, including opening their market to our products and services just as we have opened ours.”