U.S., CHINA SIGN TEXTILE AND APPAREL TRADE PACT
Byline: Jim Ostroff
WASHINGTON — The U.S. and China signed a new, four-year textile and apparel trade agreement that keeps China’s shipments at near current levels and, for the first time, promises to give American makers access to that enormous market.
The pact, signed Monday morning in Beijing local time after five days of intense negotiations, also reduced China’s U.S. import quotas in 14 apparel and textile categories, but specific details of these cuts, as well as other provisions of the accord, will not be available until later this week.
Based on what is already known, the pact got a vote of approval from industry spokesmen here.
The new bilateral agreement is retroactive to Jan. 1 and follows an accord that expired Dec. 31, 1996. The U.S. had extended the old pact’s provisions until Jan. 31.
Rita Hayes, the chief U.S. textile negotiator and textile ambassador, said in a telephone interview from Beijing that the new agreement provides for an average 1 percent growth in China’s import quotas annually. However, Hayes said, it cut quotas in categories where China had “overshipped and transshipped” and provided an increase, or uplift, in some other categories, but she declined to provide further details.
The base quota and growth levels are crucial for U.S. importers. Once China gains admission to the World Trade Organization, quota growth accelerates, but 1 percent would increase to just 1.85 percent annually by 2002.
Hayes said China also agreed to tougher measures to eliminate transshipping, to implementation of an electronic visa system to track imports and again to the U.S. right to impose triple quota reductions for violations.
“This is a precedent-setting agreement because, for the first time, it gives U.S. exporters real market access to China,” Hayes said. She noted China agreed to cut and lock in its import duties and eliminate non-tariff, regulatory and administrative barriers. Hayes did not say whether China agreed to end barriers against all textile-apparel products, stating, “We narrowed it down to areas where our industry could immediately start exporting…, such as knit, printed and upholstery fabrics, high-volume knit apparel, including T-shirts, sweatshirts and underwear, branded apparel and sportswear” as well as yarns and industrial fabrics.
Hayes said the pact also provided for the elimination of quotas on Chinese silk imports after 1997. Silk products were brought under control for the first time in the 1994 agreement.
It was also agreed that Hong Kong, which reverts to Chinese rule on July 1, will remain a separate quota entity.
Larry Martin, American Apparel Manufacturers Association president, hailed the transshipment and market access provisions, but said the U.S. must be vigilant in both areas to prevent Chinese cheating. Similarly, Seth Bodner, National Knitwear and Sportswear Association executive director, praised Hayes, but added, “we have to see how serious the U.S. will be in enforcing it since…this administration has a long track record of agreements with China, which [China] doesn’t pay attention to.”
Bodner said the accord “may make it possible for large, branded companies like Levi Strauss and Fruit of the Loom to export to China.”
Ron Sorini, Fruit’s international vice president, said, “If barriers have been eliminated, we sure will take a serious look at China.”
James Fitzgibbons, American Textile Manufacturers Institute’s president and chairman of Fieldcrest Cannon, Inc., Kannapolis, N.C., urged the U.S. Customs Service “to continue its investigation of Chinese textile and apparel transshipments.”
“While we’re not going to kid ourselves that the transshipment problem will suddenly disappear, we do believe that the provisions in the agreement [will help],” he said.
Robert Hall, National Retail Federation vice president and trade counsel, said retailers are “pleased a market access agreement was reached, and we’re hopeful the agreement will contain a balanced approach in some of the uplifted categories important to U.S. consumers.”
Hall, who had been in Beijing as an advisor but was not privy to the final accord’s details, said he hoped the categories that received cuts “will have a minimal impact on consumers.”