WASHINGTON — The Bush administration Monday said it would begin a review of surging Chinese apparel and textile imports to consider whether to impose temporary safeguard quotas on $624.5 million worth of shipments.
The move comes in the face of mounting complaints that imports from China — which have been unrestrained since the nations of the World Trade Organization dropped quotas on Jan. 1 — are taking a heavy toll on manufacturers in the U.S. and developing world.
The disclosure that the Bush administration would “self-initiate” a review — rather than wait until the domestic industry filed complaint petitions — came as something of a procedural victory for the textile lobby. Trade experts suggested the move was intended to help the administration persuade GOP textile-state lawmakers to back the proposed Central American Free Trade Agreement.
Commerce Secretary Carlos Gutierrez said the administration will begin a review of cotton knit shirts and blouses, cotton trousers and cotton and man-made fiber underwear from China to determine if the imports are hurting U.S. manufacturers.
Imports from China grew at a staggering rate in the categories the administration plans to tackle. On Friday, the Commerce Department released figures showing more than tenfold growth in imports of Chinese cotton shirts and pants.
“This decision is the first step in a process to determine whether the U.S. market for these products is being disrupted and whether China is playing a role in that disruption,” said Gutierrez in a statement. “This administration is committed to enforcing our trade agreements and to providing assistance to our domestic textile and apparel industry consistent with our international rights and obligations.”
China agreed to the safeguard measure, which essentially allows temporary quotas, when it joined the WTO in 2001. The safeguard quotas would limit China’s growth in the categories affected to no more than 7.5 percent higher than the previous year’s shipments.
A decision of whether to apply safeguard quotas could be made in a little more than a month. The administration’s procedures call for a 30-day public comment period and then allow the government up to 60 days to decide whether to act.
Lawmakers said the move could smooth the way for passage of CAFTA, which would extend free-trade benefits to Honduras, Guatemala, El Salvador, Nicaragua, Costa Rica and the Dominican Republic.
“My initial reaction is, of course, this is exactly what the industry wanted,” said Rep. Sue Myrick (R., N.C.) “It will also help with the passage of CAFTA.”
Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, said the move “vindicates” the industry, which filed 12 threat-based petitions last year. Those cases have been tied up in a court fight.
“To ignore this problem would have been a complete reckless disregard for the 700,000 workers in our industry,” Tantillo said. “This is a good first step but it needs be followed up with quick affirmation of these cases…The government needs to adopt an across-the-board comprehensive arrangement with China.”
Missy Branson, senior vice president of the National Council of Textile Organizations, noted that her group intends to file additional petitions of its own this week.
Importers and retailers criticized the move.
“We are very disappointed the administration decided to self-initiate,” said Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles and Apparel.
Gary Hufbauer, senior fellow at the Institute for International Economics, claimed the administration moved on the China safeguards because it wanted to “swing a few Republican votes in textile and apparel Congressional districts and I guess it will do that.”
However, Hufbauer claimed the administration’s action against China on textiles and apparel would most likely not be broad enough to marshal the kind of support it needs to get Congressional approval of the deal.
There are blocs of House Republicans as well as Democrats who have said they will vote against the deal, largely because of the exceptions for foreign fabrics and yarns but also due to alleged weak labor and environmental standards.