HAYES: CHINA PACT TO LIFT EXPORTS IN ’98
Byline: Jim Ostroff
WASHINGTON — The market access provisions of the new U.S.-China textile-apparel agreement will likely “double or even triple exports of American-made textiles and apparel to China…in its first year,” U.S. chief textile negotiator Rita Hayes said Wednesday.
However, these numbers have hardly been big. For the first 11 months of 1996, the latest available figures, these shipments came to $45.5 million, according to the American Textile Manufacturers Institute. They consisted of $6.8 million in apparel and $38.7 million in textiles. Furthermore, the apparel was virtually all cut pieces to be sewn in China and shipped back to the U.S. under 807 provisions, which levies duties only on the value added. The textiles were mainly for industrial use.
The market access provisions of the new pact become effective Jan. 1, 1998, Hayes said, noting “many U.S. companies had told us they could not start exporting to China immediately.”
Hayes revealed at a press briefing various — but not all — details of the new four-year pact signed in Beijing last weekend.
As for China’s shipments into the U.S., the agreement cuts quotas to below last year’s level, exactly how much she couldn’t state. However, she noted, the reduction comes to 2.6 percent, assuming the growth rates in the prior agreement had been extended for another year.
This reduction, made in response to allegations that China repeatedly has transshipped and overshipped products since 1994, reflects cutbacks in quotas for 17 categories of Chinese apparel and textiles, Hayes said. She declined to identify these categories, or others that were increased in the new four-year agreement that is retroactive to Jan. 1, noting the pact’s details will be published Monday in the Federal Register.
After these adjustments, China’s quotas will increase beginning in 1998 an average 1 percent annually through the end of the agreement.
For the year ended in November, China shipped 1.55 billion SME of apparel and textiles to the U.S., down 12.9 percent from a year earlier, making it the nation’s third-leading source of these imports. Canada was in second place, exporting 1.77 billion SME for the year ended November, up 15.3 percent from the prior year. Mexico was the U.S. leading imported apparel and textile source in the same period, shipping 2.14 billion SME of clothing and fabrics, up 41.4 percent from a year earlier.
Hayes, who also is the U.S. textile ambassador, said the agreement also provided that the U.S. would consider ending quotas on Chinese silk imports after this year, but she added this is not definite, as had been earlier reported. The U.S. first began controlling Chinese silk in the three-year bilateral pact that expired Dec. 31.
Moreover, she said the new accord permits the U.S. to issue safeguard calls, or unilateral quota limits, on Chinese apparel and textile shipments through 2009, even if China joins the World Trade Organization. The WTO’s Agreement on Clothing and Textiles stipulates all quotas will end on Jan. 1, 2005, and Hayes said this safeguard provision is unique in all of the U.S.’s textile pacts with other nations.
Officials with domestic textile and apparel trade groups have publicly expressed concern that once quotas end, China will swamp the U.S. and other key markets with apparel and textiles, effectively ending domestic production. Unfettered by quotas, China went from a bit player in the U.S. footwear market in the early Eighties to the unquestioned dominant supplier a decade later.
As for the provisions giving U.S. makers practical access to the Chinese market for the first time, Hayes said sheets, bedspreads, comforters, curtains, drapes and window treatments are covered by the agreements, as well as knit, printed and upholstery fabrics, high-volume knit apparel, including T-shirts, sweatshirts and underwear, branded apparel and sportswear, yarns, upholstery and industrial fabrics.
Hayes said about 100 Harmonized Tariff System (HTS) lines, covering specific goods, are on the list of textile and apparel products for which China agreed to cut import duties and bind these duties so they can’t arbitrarily be hiked in the future. She declined to further identify these HTS lines. There are nearly 1,000 HTS lines covering world trade in textiles and apparel.
China also agreed to end nontariff barriers, such as licensing and import regulations, which in the past have been used to keep out these products, Hayes said.
Hayes said the U.S. decided initially to seek market access for those goods American textile and apparel makers said they could export to China quickly.
Hayes emphasized that achievement of this “landmark market access agreement” is vital to the future of American apparel and textile makers.
“We now have seven years left until quotas are eliminated, and there’s an understanding that exports are very important, which is why we’ve been working to give all companies, large and small, an opportunity to increase their exports,” she said.