WASHINGTON — A coalition of industry groups continued to put pressure on the Bush administration and China on Tuesday, as it unveiled nine more China safeguard petitions — covering 14 apparel and textile categories valued at nearly $2 billion last year — it plans to file in the next three days.
The coalition is targeting some $1.96 billion in imports from China for continued quota restraints in its 13 petitions covering 21 categories, as first reported by WWD last week. In addition to the 14 forthcoming categories, the textile industry on Friday filed petitions covering two categories and also plans to seek renewal on five categories that were subject to safeguards last year.
The American Manufacturing Trade Action Coalition, National Council of Textile Organizations, National Cotton Council, SEAMS, American Fiber Manufacturers Association and UNITE HERE are expected to file at least four of the nine petitions today and the remaining petitions in the next two days. The number of members that sign onto each petition will vary, depending on the product.
Some members of the coalition filed the first petition Friday against Chinese imports of men’s and women’s cotton trousers.
The 14 new categories covered in the latest threat-based petitions are: women’s and men’s man-made fiber trousers, wool trousers, women’s and men’s cotton knit shirts, women’s and men’s man-made fiber knit shirts, woven cotton and man-made fiber shirts, cotton and man-made fiber underwear, cotton sheets, synthetic filament fabric and cotton yarn.
In addition to the nine newly announced petitions, the coalition said it would request an extension of the China safeguards currently in place on five categories: cotton dressing gowns and robes, man-made fiber dressing gowns and robes, cotton bras, man-made fiber bras and knit fabric, all of which expire at the end of the year. Those petitions were approved by the Bush administration based on actual market disruption and not the threat thereof.
Together with the petition filed on Friday, covering imports of men’s, boys’, women’s and girls’ cotton trousers, the 13 petitions covering 21 categories account for 13.8 percent of the $14.21 billion in Chinese textile and apparel imports last year, and 2.5 percent of the $77 billion in such imports from the entire world, including China.
“Our associations put in hundreds of hours of research in determining the size of the threat from China once quotas are lifted on Jan. 1 next year,” said Auggie Tantillo, executive director of AMTAC. “What we found was an overwhelming degree of evidence that indicates China is poised to capture a dramatic share of the U.S. market as well as global markets overall.”
The U.S. textile and apparel industries are bracing for a seismic impact when global quotas on apparel and textile imports are lifted among World Trade Organization nations. The coalition is filing the petitions to counteract what it claims will be a death knell for U.S. industries, imperiling the remaining 695,800 jobs associated with textile and apparel production, and also putting at risk many of the 30 million apparel production jobs worldwide.
The Global Alliance for Fair Textile Trade, a coalition of 96 textile and apparel trade associations from 54 countries, also weighed in on the safeguards Tuesday and urged the U.S. to approve the threat-based petitions.
Tantillo noted that China has invested $21.2 billion in fixed assets in the textile and apparel sector in the past three years alone, while garment production has increased by 50 percent. In addition, he said the coalition’s research revealed that China currently has 3,784 new textile and apparel facilities under construction and has planned another $180 billion in investment in the sector. He added that a recent survey of 215 apparel manufacturers in China revealed that 89 percent expect their exports to the U.S. to grow significantly and half expect exports to grow by up to 50 percent.
Meanwhile, U.S production in the 21 categories totaled $17.7 billion in 2003, according to U.S. government data, supplied by the coalition. That figure includes the value of “outward processed” garments — which means that in addition to garments made in the U.S., it includes the value of garments for which components or materials are made in the U.S. but the actual assembly is performed abroad.
Cass Johnson, president of the National Council of Textile Organizations, said the coalition has provided an enormous body of evidence to argue the threat of market disruption in its 10 threat-based petitions, including Friday’s cotton pants filing. Johnson also repeated the coalition’s assertion that China is a threat based on its dominance of apparel categories removed from quota in 2002, after which China increased its share of U.S. imports from 9 percent in 2001 to more than 72.3 percent on average, while prices for those products fell 53 percent in just two and a half years.
The coalition is entering unchartered territory with the threat-based petitions and putting the Bush administration to a real test to make determinations on potential threat as opposed to actual market disruption. Administration officials determined in September the coalition has a right to file petitions based on the threat of market disruption.
“We have worked with the industry,” said a Commerce Department official. “The evidence presented cannot simply be anecdotal. There must be hard evidence.”
Among the examples the official cited were: Showing excess capacity in China that is not currently being used but is expected to go into production at the beginning of the year; stockpiling articles currently under quota with the intent to ship as soon as quotas come off, and a significant investment in recent months or years, particularly in the types of textile production in the petitions.
“There has to be that kind of hard evidence,” said the official, who spoke on the condition of anonymity. “That is a sampling of what we are looking for in cases of threat.”
The administration’s acceptance of threat-based petitions triggered dramatic opposition from Chinese diplomats and U.S. importers and retailers.
Erik Autor, vice president and international trade counsel at the National Retail Federation, said he believes the China threat was exaggerated.
“It strains credulity that imports from China would suddenly explode six- or sevenfold with removal of quotas,” he said. “They just can’t come up with that kind of evidence.”
Autor argued that China was already a major supplier in many of the categories removed from quota in 2002.
“You cannot jump to the conclusion that what happened to some of those categories in 2002 will happen to all apparel categories,” said Autor. “China is not the preferred place to make everything.”
Laura Jones, executive director of the U.S. Association of Importers of Textiles & Apparel, said: “Filing petitions now, three months before the quotas come off, makes no sense at all. There is no surge and absolutely no justification for yet another demand for protection. The petitions are baseless and should be summarily rejected.”